Capping Taxes in Town
An effort was made to cap property tax increases in town at the annual Goffstown Deliberative session with a last minute Petition Warrant Article. Since expenses that the town has been able to up-shift to the state and federal government are essentially “out of reach”, the only control of local taxation in an SB-2 town is the property tax. If the “up-shifted” town expenses ever get fully “down-shifted” from the state and federal government, then taxpayers will get quite a surprise and that conversation is not within the scope of this article. The issue of “down-shifted” expenses will become apparent soon enough. The subject of doubling taxes will not go away for reasons that will be explained.
Any student (past or present) who paid attention during math class knows that any number that increases at 7% a year will double in 10 years. Money in the bank earning that yearly interest rate (don’t you wish) would double in ten years; likewise, a local budget (town & school) that goes up at an average of 7% every year would also double for the same reason. As an example:
If a town had, let’s say, about a $55 million dollar budget (town & school) and that doubled on average every decade (everything else being constant), then at the end of the decade the budget would be $110 million; at the end of the next decade $220 million; at the end of the next decade the budget the budget would be $440 million and so on decade after decade. Quiz: when would the town budget (town & school) reach $1 billion dollars? Interesting isn’t it? Pretty big numbers!
“Old-timers” might not be concerned about that trend; “young-timers” would be paying attention!
Another example to make a point is the following: Suppose one portion ($36M out of $56M) of the total town budget (school) tax rate was to go up maybe 20%. What impact would that have on the total town (town & school – town tax rate increase is flat) tax rate? Gets complicated, doesn’t it?
It is further complicated, as implied at the beginning of the article, because the revenues, adequacy grants, ARRA funds, “down-shifted” state and federal expenses all have an impact on the final local tax rate. The local tax rate is a combination of local expenses + revenues - just like at home. The only difference is that it appears that many voters feel that there is no limit to rising taxes. How do voters at home feel about that when they are in very serious, negative financial circumstances for many reasons? Do they have a say about taxes at all? There are definitely “two sides to the story.”
The Goffstown Budget Committee had to listen all last year that it was “outrageous” on the part of the Budget Committee to try and control increases in the governing body budgets. Is the Budget Committee supposed to be just a “rubber stamp” for the governing bodies? Some seem to think so!
CONTINUE READING BELOW and WATCH THE VIDEO
“Give them what they want” becomes a rallying cry for many voters with a vested interest.
A selectman points out (somewhat accurately) that property taxes haven’t doubled (because of ability to “up-shift” expenses to the state & federal governments.) That better remain constant.
The above referenced Petition Warrant Article to “Cap the property tax at a 3% yearly increase”, didn’t go anywhere because a Budget Committee member changed the intent (legally or illegally!) to be limited to a 100% increase. Well, the path is now clear for a doubling of taxes every year!
Maybe this is just about voters wanting to have a final say on all spending. We shall soon see!