On June 22 our Representatives in Concord finally passed a budget, which Governor Sununu has promised to sign. As you may remember the House did not pass an operating budget so the joint Committee of Conference worked to tweak the budget passed by the Senate to make it acceptable to the various Republican factions in the House and the State Senate. There was an up and down vote in both the House and the Senate on the revised budget with no amendments. All but 14 Republicans in the House voted for the budget while all but 5 Democrats voted against it. The Senate voted along party lines with 14 in favor and 9 against.
The $25 million per year revenue sharing the House Finance Committee had previously included to be paid by the State for local property tax relief is no longer in the $11.7 billion spending plan for the biennium. This has been suspended since 2010. Also, the statutory catch up formula for rooms and meals tax distributions to the towns is suspended for another 2 years even with the ever increasing revenues from that tax. The towns were supposed to get 40% of that tax while with the suspension they get only 20%, a $5 million annual hit to the towns' budgets.
There is, however, some help to towns in the budget. Some of the brighter spots are $35 million for highway block grants, $6.8 million for municipal bridge aid, $12.7 million for state aid grant (SAG) funding through Dept. of Environmental Services, for water and wastewater projects already approved by the Governor and Executive Council, and full funding for payments of $866,250 each year in lieu of town taxes to the affected towns for lands taken long ago for flood control.
There were also some bills passed recently that should help our towns. Senate Bill 38 provides an additional $30 million to municipalities for highway improvements which will be treated by towns as “unanticipated revenue” so money can be used in the current year. House Bill 371 increases the dollar threshold from $35,000 to $125,000, above which municipalities must be required to purchase a bond for a construction project.
Other State news affecting towns is the New Hampshire Supreme Court affirming decisions of the Board of Tax and Land Appeals approving municipal appraisals of utility property despite challenges to those appraisals in more than 60 municipalities. Briefly the Court has affirmed using local appraisals for town utility property taxes rather than the often lower Department of Revenue Administration’s statewide appraisal method favored by the utility companies.
Senate Bill 191, the Kindergarten Bill, was also passed by the House and Senate. It is now known as the Kenogarten Bill since, as amended, it ties legalization of Keno to funding for all day Kindergarten. Keno might not raise enough money to fund universal all day Kindergarten. In that case the distribution of money raised would supposedly depend on the financial condition of school districts. Not exactly what Governor Sununu promised.
We have heard a lot of talk from the Freedom Caucus in the Legislature about a need for more tax cuts as a job creator. We believe that the most important tax to lower is the local property tax. The opportunity to use increased State revenues to send promised funds back to our towns has been largely rejected and instead, the budget provides yet another decrease in business taxes.
As Senator Feltes says, “This budget spends more on business tax cuts than on combatting the opioid epidemic”. We believe that returning promised funds to the municipalities for local property tax relief would benefit both businesses and individual home owners.