Besides public employee salary and benefit costs, nothing impacts local property taxes more than big construction projects like new $chools, mammoth libraries, and police $tation megaplexes. Throughout the state, and indeed the entire country, we see massive projects proposed or under way. Why not? The economy is good right now. People seemingly have enough money to continue paying the ever-rising cost of funding their government. Or do they? How often do we hear the liberal Democrats and their comrades in the news media tell us that the “Bush economy” only benefits the rich and leaves “the little guy” losing ground as their costs grow faster than paycheck raises? Perhaps one reason there may be a grain of truth to that notion is that the fiscal backsliding is being caused in large part by people’s ever-growing tax burden.
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Can it be that ordinary folks are beginning to understand that their local governments have a spending problem that finds tax bills digging deeper into their weekly paychecks? Let’s look at the “tale of two cities” if you will- Laconia and Gilford (actually, a town). Both locales have recently passed initiatives aimed at either directly, or indirectly, slowing the pace of government growth. In both, “It [is] the best of times, it [is] the worst of times.”
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After years of missed attempts, the voters of Gilford chose to give themselves the “official ballot” (SB2) method of voting whereby they would vote on issues and spending in the privacy of the booth and the convenience of all-day voting and absentee ballots. The people have the ultimate veto power over all budget and spending matters. Even if the elected “leaders” decide to promote some exorbitant idea or scheme, the voters can show up and stop them cold if they so choose. A good example is this past March’s vote on the town’s 2.9 million dollar police department megaplex proposal. Despite the endorsement of the board of selectmen and the budget committee, the voters had the good sense to do the right thing, vote NO, and send the promoters back to the drawing board to see if they can get it right next time.
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As Tuesday’s Laconia Daily Sun reported, Gilford’s selectmen got the message (finally) and disbanded the committee that spent almost 5 years creating the free standing megaplex plan that people said over and over they did not want. Now, a new committee has been formed and their charge is to study the feasibility of renovating and expanding the existing police department space in the town hall. This is what many people have been saying they would be willing to consider all along. This is not to say that frugality has yet won in Gilford- it is now up to the taxpayers to make sure that they are not told, as they have been in Laconia, that renovation is more expensive than demolition and new construction. Of course, if such a bill of goods is presented to the voters, they will most likely have the good sense (again) to just say no. Power to the people!
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Meanwhile, over in Laconia, folks approved a tax cap this past November. Being a city, the options available to the citizens to operate their government are quite different. Other than charter change initiatives, the only way Laconia’s voters have any decision-making power is through the election of representatives who meet as a city council. There is no chance for citizens to vote on any spending matters- everything gets discussed and voted upon by their representatives on the council. “But Doug, the voters of Laconia must have an opportunity to vote on the big stuff, right? You know, like the tax-cap busting bond to borrow money to tear down the middle school and replace it with a new one. The voters vote yes or no, right?”
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New Hampshire law RSA49-C:24 states “the elected body, by resolution, may authorize the borrowing of money for any purpose within the scope of the powers vested in the city and the issuance by the city of other evidence of indebtedness therefore, and may pledge the full faith, credit, and resources of the city for the payment of the obligation created by such borrowing. Borrowing for a term exceeding one year shall be authorized by the elected body only after a duly advertised public hearing.” That’s it. A public hearing, and a vote by the council is all that stands between the hapless taxpayers and a 26million dollar $chool construction bond- following their vote to override the tax cap.
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So goes the “tale of two cities.” In one – Gilford, the voters can enter a voting booth and stop crazy spending schemes. In Laconia, other than voting for candidates who claim to be frugal and then hoping they stay that way, the only recourse taxpayers have is to beg their council members to show them some mercy and abide by the tax cap they placed in that city’s charter.
UPDATE**There are actually some hopeful (although I’ll believe it when I see it) signs that the Laconia city council has decided that it may be politically expedient to abide by the tax cap after all. Today’s Citizen is reporting:
There is a "reasonable probability" though not a certainty, that Laconia can build a new middle school without overriding the municipal spending cap, says Ward 3 City Councilor Henry Lipman. Lipman, chair of the council’s Finance Committee, explained Wednesday that, because the city’s current debt service is decreasing, an opportunity potentially exists to borrow money to cover the estimated $26 million cost of the school without having to override the cap or cause a spike in the tax rate.
The news about them maybe abiding by the tax cap is not all good, however. It seems they plan on stretching the terms of the bond for 30 years in the attempt at reducing yearly costs. Again, from the Citizen piece:
The downside to keeping the debt service level is that there’s a cost attached, somewhere between $4 million to $5 million more than a conventional, shorter-term bond, which typically would see larger payments at the start of the repayment period, followed by a peak year, and then a gradual decrease.
Perhaps the numerous columns predicting their non-adherance to the voters’ wishes has begun to rattle them and they feel they must follow the people’s wishes. I still think that, barring any sea-change in how the business of Laconia schools and city departments gets conducted, they will ultimately have to break the tax cap. Remember, I as I reported in an earlier posting,
city manager ‘Cabanel projects School District will be $646k over tax cap for 2007- 2008, without new construction.’
Time will tell. Meanwhile, it is up to the concerned folks in the city to be vocal. Write letters. Go to meetings. Perhaps with enough heat, they’ll listen.
This is now cross-posted over at www.GilfordGrok.com
