LEBANON — City schools are proposing a 7% increase in the operating budget for the next school year to cover the rising costs of special education and employee health insurance.

The School Board will hold a public hearing on Wednesday to consider a proposed budget of $55.3 million for the 2024-25 academic year, with $38 million to be raised by property taxes.

The spending plan would increase the school portion of the city’s property tax rate by $1.37 per $1,000 of assessed property value.

That’s the equivalent of an additional $411 annually on a $300,000 home.

The proposal increases the operating budget by nearly $4 million from the current fiscal year’s total.

School Board Chairwoman Lilian Maughan said the budget plan sought to minimize the tax impact upon residents without compromising the district’s educational quality.

“In light of current economic realities in the city, the board felt an increased obligation to present as fiscally sound a budget to the taxpayers as possible, while still maintaining the excellent education that Lebanon School District is known for providing,” Maughan said in an email on Tuesday. “Consequently, we thoughtfully revisited the proposed budget several times, considering all possibilities for reduction.”

The board is expected to vote on a final budget proposal at Wednesday’s public hearing, which will take place at 6:30 p.m. at Lebanon Middle School.

Half of the budget increase is attributable to scheduled increases in compensation and benefits for faculty and staff. According to the administration’s budget summary, every collective bargaining group is due for a salary increase, and rising health insurance costs are largely responsible for a $1.2 million increase on the benefits side.

In addition, special education costs are expected to increase $1.5 million next school year, including $495,000 in contractual wages and benefits for special education staff and a $672,000 increase in tuition and transportation for out-of-district placements.

The final proposal does not fund any new staffing requests, according to the administration’s budget summary. And it eliminates the school resource officer, which included $73,000 for compensation and training.

In November, the School Board voted, 6-2, to remove funding for the SRO position, over concerns board members had about having an armed officer in the school buildings who was not a district employee.

A deliberative session will be held on Feb. 3 to allow city voters to discuss the budget and other items that will be on the March ballot. At the deliberative session, residents can make motions to increase or decrease the dollar amount of the proposed budget before the school ballot is finalized. Voters at the deliberative session must pass a motion by a 60% majority to change the budget’s bottom line.

In March, voters also will be asked to consider an additional $200,000 appropriation for the district’s capital reserve fund for future building construction or renovation projects.

Ballot voting on the school budget will take place on Tuesday, March 12.

Polling stations will be open from 7 a.m. to 7 p.m.

Ward I residents will vote at Kilton Library, Ward II residents will vote at United Methodist Church at 18 School St., and Ward III residents will vote at City Hall.

If voters do not pass the proposed operating budget, the default budget for next school year will be $54.6 million.

Patrick Adrian may be reached at padrian@vnews.com or 603-727-3216.