LEBANON — The School Board has recommended a $53.7 million operating budget for the fiscal year beginning July 1 that would likely result in a 2.35% tax rate increase.

Residents will have the opportunity to learn more about the budget and present feedback at a public hearing Wednesday at 6:30 p.m. at Lebanon Middle School.

The proposed operating budget, which funds Lebanon’s five schools, represents a 0.3%, or $163,327, increase from last year’s budget of $53.6 million.

“The Board is very aware of the current financial situation facing all city residents, and we have been thoughtful and vigilant in preparing our annual budget,” School Board Chairwoman Lilian Maughan said via email Tuesday. “We take our responsibilities to both Lebanon taxpayers and Lebanon students very seriously.”

The slight uptick in the budget is largely driven by increases in wages and benefits, and debt service for previous capital expenditures.

The school district has reached a new draft collective bargaining agreement for 2025-28 that would result in a salary step increase for certain eligible district employees, including all teachers, and an increase in the base level salary by 3.25%. Voters will weigh in on the cost of the new contract in March as an article separate from the budget.

Also impacting the projected tax rate is a decrease in expected revenues compared to the actual excess funding earned this year, according to a School Board memo. While the board budgeted $1 million for both years, the actual excess funds used to offset the most recent tax bill — either revenues beyond projected amounts or funding for allocations that were not used — amounted to $1.58 million. The School Board expects that excess revenues may again be greater than projected, which would bring the tax rate down further.

The local education tax increase under the proposed budget is 33 cents per $1,000 of assessed valuation, bringing it to $14.16. If voters approve the budget in March as presented, it would add $115.50 in school taxes to a property assessed at $350,000.

The local school budget represents 52.6% of the annual tax rate, with the remaining portion made up by the municipal, county and state school budgets. Lebanon residents are already facing a 7.8% projected tax rate increase from the municipal budget set in December. The school and county budgets will be set later this year.

Since the budget process began in September, school district administration and the School Board have made more than $1.35 million in reductions from the proposed budget through a mix of cuts and funding certain requests with excess funds from the previous budget.

A final $200,000 in cuts requested by the School Board in December has yet to be allocated by the district administration, Timothy Ball, business administrator for the school district, said in a Tuesday email.

Clare Shanahan can be reached at cshanahan@ vnews.com or 603-727-3216.

CORRECTION: The local education tax increase under the Lebanon School District’s proposed $53.7 million operating budget for the fiscal year beginning July 1 is 33 cents per $1,000 of assessed valuation, bringing it to $14.16. If voters approve the budget in March as presented, it would add $115.50 in school taxes to a property assessed at $350,000. A previous version of this story included an incorrect amount for the tax increase.