Keene, NH: "Special ed costs are a major driver" on property tax
- 2 days ago
- 5 min read
Keene, NH
Nestled in the hills north of Keene, the town of Surry has a few hundred homes and virtually no commercial development. The local school district depends heavily on property taxes paid by homeowners — so year-to-year swings in the budget can really hurt, says school board Chairman Tim Peloquin.
“I’ve spoken to my mortgage company or called them to ask a question, and they’ll look at my thing and go, ‘What the heck goes on in the town?’ ” he said. “ ‘One year, your taxes are $100 [a month], the next year they’re 250.’ And so everyone’s taxes in Surry fluctuate dramatically.”
Special education costs are a major driver of that volatility, Peloquin says — and they’re at the heart of a (polite) dispute between Surry and its larger neighbor to the south.
With no traditional public schools of its own, Surry sends most of its students to be educated in Keene and pays tuition in exchange. Surry officials argue they’re overpaying for students who receive special education services in Keene, because that tuition is the same regardless of the level of services provided.
“We feel a bit like a donor town,” Peloquin said.
Keene officials disagree. But the issue, local education officials say, is an example of how rising special education costs and limited state funding can pit taxpayers against school districts, and school districts against one another — especially in small districts like Surry, where a few students with high needs can drive large swings in the budget.
Districts across the state are grappling with high special education costs, but Peloquin said Keene’s tuition rates add to the burden on Surry taxpayers.
For the 2026-27 school year, according to Peloquin, Keene is charging around $21,000 per elementary-schooler, $16,000 per middle-schooler and $18,000 per high-schooler in standard tuition. For students requiring special education services, the rates are $42,000 for middle school and $37,000 for high school. The special education rate for elementary school is the highest, at nearly $56,000 per student.
Peloquin said those rates are fixed even though many special education students need relatively low levels of services, like an hour of speech and language therapy per week. And Surry is hit harder than other districts, he said, because it’s the only one that sends its elementary-schoolers to Keene, incurring the nearly $56,000 per-student fee for special education at that level.
“We don’t have a student getting nearly that amount of services,” he said.
The budget impact, Peloquin said, is “brutal.” According to Surry’s most recent town report, the school district’s annual expenditures on special education tuition were $435,942 in 2022-23, $571,096 in 2023-24 and $706,721 in 2024-25 — close to a third of the district’s total expenditures that year.
Peloquin said he’s met with Keene officials to propose a tiered system, in which students receiving fewer services would be charged at a lower rate. He said the conversation was constructive, but Keene so far hasn’t taken up his proposal.
Overall, Surry is “very happy” with the Keene School District and the education it’s providing, he said in a followup email. “This discussion revolves only around the extraordinary cost to a small town to educate their students.”
The issue has also come up in Winchester, which will start sending its high-schoolers to Hinsdale next school year after Keene declined to extend its tuition agreement with the town.
Superintendent David Ryan, who oversees both the Winchester and Hinsdale districts, said special education costs didn’t drive that decision. But he expects Winchester’s special education expenses will go down because Hinsdale will charge by the service instead of a flat rate.
“For many students at the high school, a lot of services won’t crest $30,000, never mind the $35,000,” he said. “Some may. But we do anticipate saving money on the special education side.”
In a district with as many students as Keene, however, shifting from a flat rate to an “a la carte” system would create more problems than it solves, said George Downing, chairman of the Keene Board of Education.
“For a district of our size, it actually increases the overall cost to go away from flat rate and to start charging by the service,” he said.
That’s partly because putting an exact cost on the services used by each student would be a time-intensive process, requiring staff to pro-rate various teachers’ salaries based on the time they’re spending with different students. . . .
“In the long term, that balances out — but in the short term, it becomes very difficult to budget for,” he added.
Downing said he’s sympathetic to Surry’s plight and is open to having continuing discussions on the issue, but couldn’t comment on whether a tiered system like Peloquin proposed would be feasible, because he hadn’t discussed that with the full board. Downing said he was not aware of any other school districts that have raised this issue with Keene.
Rich Popovic, the chairman of Nelson’s school board, said residents have expressed concerns about the cost and volatility of special education expenses in general, but not about Keene’s tuition rates specifically. Nelson has its own elementary school but sends grades 6-12 to Keene.
“I feel like us paying a flat rate is the most realistic way forward,” he said. “If some students don’t avail themselves of X amount of dollars worth of services, I’m sure others do, and go beyond that. So I would hope that it sort of all evens out.”
Popovic said the larger problem is that the state doesn’t provide enough financial support for special education, leaving local taxpayers holding the bag. According to reporting by New Hampshire Bulletin, local school districts shoulder around 85 percent of the cost of special education.
“When you have a system like that, and a state that continually shirks its obligations, then you’re setting up taxpayers versus the schools in these towns, and that’s really not the way we should be approaching education,” Popovic said.
Surry School Board Chairman Peloquin agrees that this issue of how to allocate costs between districts would get a lot easier if the state stepped up its funding. But as things stand now, Surry taxpayers are in a pinch.
Peloquin said he understands why Keene officials prefer a flat-rate system. He also hears the concerns that, under a different system, districts with higher-need students could face unpredictable spikes in costs. But he notes that state aid kicks in to help cover the costs of the students whose education is most expensive.
“We could never have a student that costs as much as what we’ve paid for services that we haven’t got,” he said.
For now, though, Surry doesn’t have many other options. Surry withdrew from the Monadnock Regional School District in 2008, a few years after the district decided to close the town’s elementary school. Reopening that school would cost much more than paying for kids to attend school in Keene, and sending local students to Monadnock or Fall Mountain would mean much longer bus rides.
“It’s one of those things: You can order anything you want on the menu, as long as it’s the hamburger,” Peloquin said. “There’s just not a lot of choice.”
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