By GARRY RAYNO, Distant Dome
CONCORD – House budget writers are hard at work on their budget proposal that will be voted on later this month.
Most agree this upcoming budget season will be one of the most challenging budget writers have faced in some time.
Declining revenues particularly business taxes is a considerable problem and coupled with the loss of federal COVID aid with its secondary boost to revenues, and potential changes coming from the Washington D.C. in some key state programs like Medicaid, as well as slashing higher education grants and the picture is pretty bleak.
And when the budgetary outlook is bleak in Concord it very quickly becomes even more unsettling for property owners when the property tax bills come due.
Over the years, when the times were tough, budget writers cut the municipal aid program, eliminated the state’s share of retirement costs for teachers, and municipal and county workers.
Those two slashes of the budget sword cost property taxpayers hundreds of millions of dollars since those cuts in 2012.
These days the focus is on the state’s failure to pay for its constitutional obligation to pay for an adequate education in the 30 years since the state Supreme Court issued its first two Claremont rulings.
More and more Granite State citizens are beginning to realize the reason property taxes keep going up is the state’s meek support for public education.
When the state pays 20 percent of the cost of public education, which is at the bottom of the scale for all 50 states, that downshifts costs to local property taxes which have to pick up their own share of the costs — which in most states averages around the 50 to 60 percent level — along with what the state fails to pay.
The latest two education funding cases are either waiting for a decision from the state Supreme Court or a decision from the Superior Court judge which will no doubt be appealed by one side or the other.
The issue is not going away and the only bill this session that has any chance of passage is one that does not cost the state anything, it requires property wealthy communities to send their excess Statewide Education Property Tax revenue to the state instead of retaining it for themselves, often to reduce the local education tax.
Another significant downshift to local property taxes is from special education costs which average just under $30,000 per student, considerably higher than the average per-pupil cost of about $22,000.
The longtime complaint concerns catastrophic aid which has been flat-funded for a number of years as the costs escalate.
The catastrophic aid kicks in when the cost of a student is 3.5 times higher than average, or about $70,000. The state is reimbursing school districts at a prorated 68 percent of the cost. The rest of the cost is downshifted to local property taxpayers.
A bill coming to a vote Thursday would set the rate of reimbursement at 80 percent which is an improvement but still downshifts costs to the local taxpayers.
Another favorite trick to downshift costs to local taxpayers involved nursing homes.
The state and the counties made a deal many years ago over how the costs of nursing home care and for at-risk youth or Children in Need of Services (CHINS) would be split.
The state agreed to pay more of the costs of the CHINS program while counties shouldered a greater burden for nursing home care for the elderly poor.
In the same budget that ended the state’s share of retirement costs for governmental subdivisions, municipal aid, and slashed higher education funding in half, the state ended the CHINS program.
The hue and cry from law enforcement, educators and parents brought the program back, but with greater restrictions on what the courts could order for services thus reducing costs for the state.
The counties have not been so rewarded and often governors, particularly Gov. Chris Sununu, presented budgets that essentially removed the cap on the county’s share of the costs, sending more obligations down to local taxpayers.
The Legislature often, but not always found more money to pay the state’s share of the nursing home costs but over the years local taxpayers have been footing more and more of the bill.
Another area of concern is the local roads and bridges money in the Department of Transportation which is dedicated money from the last gas tax increase that goes to pay for local highway infrastructure upkeep.
A far reaching agreement at the time of the last gas tax increase gobbled up all the federal money available through a couple of sources to ensure the I-93 expansion project between Salem and Manchester would be completed, while using a no-cost and then low-cost federal bond through the Transportation Infrastructure Finance and Innovation Act (TIFIA) to continue and boost local road and bridge work.
The last year of the federal money for local projects is this year at $24 million and then goes to 0 as money shifts to paying off the bonds.
That is going to be a significant decrease in state or federal help municipalities have received in the last 10 years with their local infrastructure and going forward it is going to be a lot more costly for local taxpayers.
The state’s share of the gas increase was slated to pay off the federal TIFIA bonds and Grant Anticipation Revenue Vehicle Bonds (GARVEE) programs.
The interstate highway system collects tolls which will help pay for the GARVEE bonds, while the TIFIA bonds will be paid off through the Highway Fund which is essentially the gas tax and vehicle registration.
Due to greater efficiency and electric vehicles, the Highway Fund collections are essentially flat and expected to decrease in the future which puts the state highway system in deficit.
However, there is a proposal floating around for increases to tolls, but that is not up to the legislature that is up to the Governor and Executive Council and the chances of that happening are not a good bet.
And then there are the personal downshifts like cutting aid $16.5 million to the University System of New Hampshire which will result in tuition increases for in-state students, the first in a while, while the Community College System of New Hampshire received enough state help to be able to hold tuition at its current rate.
So when the budget bills are passed and everyone is congratulating themselves on a job well done, just know the well done job also increases your local property taxes.
How do the Republicans in the Legislature want to deal with property tax increases, they want a statewide budget cap at the rate of inflation involving a five-year average and enrollment considerations.
Oh yeah, about that sacred principle of local control: well lawmakers believe paying only 20 percent of the cost of education, gives them the right to tell local citizens and officials what to do when one-fifth is far from majority standing.
A good phrase to remember at this time of year is what former long-time State Employee Association Executive Director Denis Parker used to say frequently, “You can never rest until they go home for the summer.”
Garry Rayno may be reached at garry.rayno@yahoo.com.
Distant Dome by veteran journalist Garry Rayno explores a broader perspective on the State House and state happenings for InDepthNH.org. Over his three-decade career, Rayno covered the NH State House for the New Hampshire Union Leader and Foster’s Daily Democrat. During his career, his coverage spanned the news spectrum, from local planning, school and select boards, to national issues such as electric industry deregulation and Presidential primaries. Rayno lives with his wife Carolyn in New London.