Anti-tax group wants to cap city spending
The Concord Monitor
April 28, 2008
If a group devoted to curbing spending has its way, Concord could be forced to cap the amount of money raised each year by local taxpayers.
Members of the New Hampshire Advantage Coalition hope to gain enough voter signatures to place the tax proposals on the November ballots in Concord, Manchester, Merrimack and Rochester. If passed, the measure would keep Concord officials from increasing the amount raised by property taxes each year for the city budget by more than the rate of change in the Consumer Price Index.
"I'm looking to send a message to lawmakers on all levels that in order to keep our low tax advantage, the only way we'll do that is to hold the line on spending," said Mike Biundo, chairman of the New Hampshire Advantage Coalition.
Biundo said Friday that copies of the proposal - which would require amending the city charter - would arrive at Concord's city hall by early this week. City officials would then send the proposal to the attorney general's office and to the state Department of Revenue for approval, Biundo said. If the language passes muster, local activists could begin circulating petitions.
To win a place on the November ballot, the proposal would need to gain substantial community support: The petition would need voter signatures equal to 20 percent of the number of total votes cast in the last regular municipal election.
The efforts to limit property tax revenue in Concord and the other three municipalities is part of a larger effort by the coalition and activists throughout the state. The coalition has plans to file similar charter amendment proposals in Bedford, Conway, Keene, Lebanon, Londonderry, Portsmouth and Somersworth. And the coalition recently brought on Jared Chicoine, who coordinated Republican presidential candidate Ron Paul's New Hampshire campaign, and former coalition executive director Tammy Simmons to help with the effort.
Concord City Manager Tom Aspell had not yet seen the proposal Friday, but he expressed concern about whether the cap would take into consideration community growth and costs beyond city officials' control. With city growth, he said, comes a need for more services (as well as more taxable property), he said.
And then there's the question of rising costs, he said. "Look at what's going on with fuel costs, and as the state and federal government continue to push costs on the local governments," Aspell said. "That all ends up here, and we have to pay those bills."
The proposal does include some provisions for new growth.
If the city had a net increase in new construction value in a given year - the dollar value of building permits minus the value of demolition permits - officials could multiply that net increase by the previous year's tax rate. City officials could then add that amount to the total they can raise from property taxes.
As for the rest of the tax cap, the proposal calls for the city council to limit the tax rate to the previous year's rate multiplied by the change in the National Consumer Price Index-Urban. To determine the index change, city officials would have to look to the U.S. Department of Labor and find the rate of change for the calendar year "immediately preceding" the budget year.
When property assessments change - Concord has recently conducted annual assessments - city officials would base the increase on the amount raised by property taxes, rather than the tax rate. The Consumer Price Index measures the average change over time in the prices urban consumers pay for certain goods and services. Between March 2007 and March of this year, the index increased 4 percent, according to the U.S. Bureau of Labor Statistics.
City councilors could override any of the proposed budget restrictions with a two-thirds vote. Any override would expire following the adoption of the annual budget.
In Concord, resident Irena Goddard will be overseeing the petition drive, Biundo said. Goddard unsuccessfully ran for a city council seat in a special election last year, losing to Rob Werner. In 2006, she made an unsuccessful bid for school board. Goddard, who didn't return a call for comment Friday, previously told the Monitor that she serves on the board of directors of the Free State Project, a group of libertarians working to transform state politics.
"This is not a top-down approach," Biundo said of the effort. "We're not pushing this on any local community. These are local community members who were willing to do it."
If this effort progresses, Concord has a handful of examples to look to.
Laconia is in its third year of coping with a cap, said City Manager Eileen Cabanel. There are, she said, some advantages to the change. City officials have focused on long-term planning, and Cabanel has taken another look at the city's fees. And "it has helped with negotiations," she said. In the recent negotiations with city employees, "we could actually show them, this is how much we actually have, your retirement went up (this amount)," she said. "We really worked together and came up with a really great contract, but it took some thinking."
Construction remains strong in Laconia, Cabanel said, so the city benefits from adding the value of net new construction to the amount it can raise through property taxes.
In Dover, voters passed a charter amendment in November, and city officials are in the midst of their first budget season with the cap in place, said Mayor Scott Myers. Much of the difficulty, Myers said, is rooted in county budget increases. The new Strafford County budget is up 15 percent over the previous one, leaving Dover officials to figure out how to cope with the increase in the county portion of the tax while staying within the cap.
"That eats up a huge chunk of what we had to work with," Myers said. "That was a concern that I had personally last year going into this vote, that there were things out of our control." City officials had projected that the amount to be raised by Dover taxpayers for the county and city budgets could go up by between $1.2 million and $1.3 million. The rise in the county budget will account for more than $900,000 of that increase, he said.
Myers worries that the new constraints will result in the postponement of capital projects. "In a lot of communities, the easiest thing to do is start cutting capital," such as road repairs and new police vehicles, he said. "You just start postponing it, and you end up with a bigger bill."
The Concord version would also include capital expenditures. City councilors could exempt - with a two-thirds vote - such expenditures and interest payments on municipal bonds from the property taxes that would be limited by the cap.
It's unclear whether Concord officials would have to contend with the county tax rate if the proposal passes, as is the case in Dover. The proposed amendment refers to the "municipal budget," suggesting that it applies only to the city portion of property tax revenue.
Apart from Dover and Laconia, Franklin, Nashua and Derry have various tax caps in place, Myers said.
The Concord Monitor
April 28, 2008
If a group devoted to curbing spending has its way, Concord could be forced to cap the amount of money raised each year by local taxpayers.
Members of the New Hampshire Advantage Coalition hope to gain enough voter signatures to place the tax proposals on the November ballots in Concord, Manchester, Merrimack and Rochester. If passed, the measure would keep Concord officials from increasing the amount raised by property taxes each year for the city budget by more than the rate of change in the Consumer Price Index.
"I'm looking to send a message to lawmakers on all levels that in order to keep our low tax advantage, the only way we'll do that is to hold the line on spending," said Mike Biundo, chairman of the New Hampshire Advantage Coalition.
Biundo said Friday that copies of the proposal - which would require amending the city charter - would arrive at Concord's city hall by early this week. City officials would then send the proposal to the attorney general's office and to the state Department of Revenue for approval, Biundo said. If the language passes muster, local activists could begin circulating petitions.
To win a place on the November ballot, the proposal would need to gain substantial community support: The petition would need voter signatures equal to 20 percent of the number of total votes cast in the last regular municipal election.
The efforts to limit property tax revenue in Concord and the other three municipalities is part of a larger effort by the coalition and activists throughout the state. The coalition has plans to file similar charter amendment proposals in Bedford, Conway, Keene, Lebanon, Londonderry, Portsmouth and Somersworth. And the coalition recently brought on Jared Chicoine, who coordinated Republican presidential candidate Ron Paul's New Hampshire campaign, and former coalition executive director Tammy Simmons to help with the effort.
Concord City Manager Tom Aspell had not yet seen the proposal Friday, but he expressed concern about whether the cap would take into consideration community growth and costs beyond city officials' control. With city growth, he said, comes a need for more services (as well as more taxable property), he said.
And then there's the question of rising costs, he said. "Look at what's going on with fuel costs, and as the state and federal government continue to push costs on the local governments," Aspell said. "That all ends up here, and we have to pay those bills."
The proposal does include some provisions for new growth.
If the city had a net increase in new construction value in a given year - the dollar value of building permits minus the value of demolition permits - officials could multiply that net increase by the previous year's tax rate. City officials could then add that amount to the total they can raise from property taxes.
As for the rest of the tax cap, the proposal calls for the city council to limit the tax rate to the previous year's rate multiplied by the change in the National Consumer Price Index-Urban. To determine the index change, city officials would have to look to the U.S. Department of Labor and find the rate of change for the calendar year "immediately preceding" the budget year.
When property assessments change - Concord has recently conducted annual assessments - city officials would base the increase on the amount raised by property taxes, rather than the tax rate. The Consumer Price Index measures the average change over time in the prices urban consumers pay for certain goods and services. Between March 2007 and March of this year, the index increased 4 percent, according to the U.S. Bureau of Labor Statistics.
City councilors could override any of the proposed budget restrictions with a two-thirds vote. Any override would expire following the adoption of the annual budget.
In Concord, resident Irena Goddard will be overseeing the petition drive, Biundo said. Goddard unsuccessfully ran for a city council seat in a special election last year, losing to Rob Werner. In 2006, she made an unsuccessful bid for school board. Goddard, who didn't return a call for comment Friday, previously told the Monitor that she serves on the board of directors of the Free State Project, a group of libertarians working to transform state politics.
"This is not a top-down approach," Biundo said of the effort. "We're not pushing this on any local community. These are local community members who were willing to do it."
If this effort progresses, Concord has a handful of examples to look to.
Laconia is in its third year of coping with a cap, said City Manager Eileen Cabanel. There are, she said, some advantages to the change. City officials have focused on long-term planning, and Cabanel has taken another look at the city's fees. And "it has helped with negotiations," she said. In the recent negotiations with city employees, "we could actually show them, this is how much we actually have, your retirement went up (this amount)," she said. "We really worked together and came up with a really great contract, but it took some thinking."
Construction remains strong in Laconia, Cabanel said, so the city benefits from adding the value of net new construction to the amount it can raise through property taxes.
In Dover, voters passed a charter amendment in November, and city officials are in the midst of their first budget season with the cap in place, said Mayor Scott Myers. Much of the difficulty, Myers said, is rooted in county budget increases. The new Strafford County budget is up 15 percent over the previous one, leaving Dover officials to figure out how to cope with the increase in the county portion of the tax while staying within the cap.
"That eats up a huge chunk of what we had to work with," Myers said. "That was a concern that I had personally last year going into this vote, that there were things out of our control." City officials had projected that the amount to be raised by Dover taxpayers for the county and city budgets could go up by between $1.2 million and $1.3 million. The rise in the county budget will account for more than $900,000 of that increase, he said.
Myers worries that the new constraints will result in the postponement of capital projects. "In a lot of communities, the easiest thing to do is start cutting capital," such as road repairs and new police vehicles, he said. "You just start postponing it, and you end up with a bigger bill."
The Concord version would also include capital expenditures. City councilors could exempt - with a two-thirds vote - such expenditures and interest payments on municipal bonds from the property taxes that would be limited by the cap.
It's unclear whether Concord officials would have to contend with the county tax rate if the proposal passes, as is the case in Dover. The proposed amendment refers to the "municipal budget," suggesting that it applies only to the city portion of property tax revenue.
Apart from Dover and Laconia, Franklin, Nashua and Derry have various tax caps in place, Myers said.