Last night I received a call from NH State Rep Harry Bean – my representative, former member of the Budget Committee, and a sponsor of my bill, HB576 which is meant to be a technical fix to RSA32, the Municipal Budget Law. Turns out, the NH House Municipal and County Government Committee is hearing testimony about it tomorrow morning at 10AM in the Legislative Office Building, Room 301.
I didn’t know that before he called. So last night, time to write up said testimony and so here it is. Now, in writing it, I did notice that a number of the changes in the bill for which that I went to Concord for a couple of weeks ago (to tighten up some of the language and to implement a penalty clause for those elected and appointed employees that violate its strictures). Not sure how to handle that problem so close to the hearing but here’s the purpose, once again, for the bill:
Executive Summary:
This bill prohibits fiscal transfers between General Ledger account line items if they have been flagged by the Budget Committee as having been “zeroed out” and also duly approved by local voters at Town Meetings / Deliberative Sessions.
Introduction:
Good morning! My name is David Murphy and I live in Gilford, NH. Thank you for hearing my testimony on HB576. Relative to “expertise” in this area, I am in my third three-year term on my town’s SB2 Budget Committee.
Background:
HB576 is meant to correct a technical problem between the mandated RSA32 process, how Depart. of Revenue Administration’s MS-Forms are filled in and subsequently used by the Governing Bodies (Town Selectmen or School Boards). In effect, this corrects a technical problem that obviates “No means No” Budget Committee decisions with “after approval” transfers during the fiscal year.
Like many such local volunteers, I have spent hundreds of hours in evaluating Town and School Board proposed budgets that are then presented to my local voters for approval during Town Meetings or SB2 Deliberative Session. Early on, I learned that we couldn’t just look at the overall budget’s total line amount and either add an absolute amount of money or subtract some percentage from it. We are also prohibited from doing either of those things at departmental level.
For those of you who have never been through this time intensive process, we are, instead, mandated to go through the hundreds (or even thousands) of line items and review each and every one of General Ledger accounts and sub-accounts and make any needed changes at those levels. Of course, all those changes get rolled up to the departmental levels and finally to the final Municipal and School Board numbers.
Problem:
For most of my time, we on the Budget Committee believed that “No means No”. That is, in setting the fiscal policy for each of the budgets (Town and School Board), if we as a Budget Committee decided that taxpayers shouldn’t pay for something, we could zero that line item and that would be the end of it. We also believed that the opposite was true – that if we added monies to a GL account / line item, that additional amount would be spent for that purpose.
Last year, after a lot of study of the relevant RSAs and hours in talking with the Department of Revenue Administration, I discovered that “No doesn’t mean No”. Any changes made and approved voters could be undone due to the lack of the Department of Revenue Administration’s MS-Forms ability to capture “No means No” decisions.
The last part of the budget process is for the Governing Bodies to fill out those MS-Forms; the many lower level line items are aggregated to a very few line items on those DRA forms. In that process, each of those MS-Form lines are now known as a “Purpose”; this is where the problem lies.
Currently, Governing Bodies can make transfers from one GL account to another within that MS-Form “Purpose” as long as the total amount is not changed (e.g., if snow removal costs for DPW go up, monies from other GL accounts in that “Purpose” can be transferred to it). This is right and needful.
Also possible, and is both wrong and is the problem, is that a zeroed out BudComm GL account and its purpose can also be restored if it was contained within this “Purpose” (even if a new GL is created on the fly for it). Thus, “No doesn’t mean No” – even if the townfolk approved that zeroed out decision.
Remedy:
The aim of this bill is to correct this technical loophole by minimally changing the wording of RSA 32 to add a “Budget Committee Exception Report”. During the process, any GL line item that is zeroed out would be added to what should be a simple spreadsheet-like form. At the process’s end, it would list all Budget Committee zeroed out GL accounts.
This Exception Report would also be furnished to the Dept. of Revenue Administration as well as to the local Governing Bodies.
This Exception Report would act like a governor – if a Governing Body wished to spend for a given Purpose and a fiscal transfer was needed, it would be allowed unless that given GL account / purpose is on the Exception Report. If it is, the transfer to that GL would not be allowed and the spending for that purpose would be denied.
Please note that a need is great, RSA 32 already provides procedures to override these decisions.
Summary:
Budget Committee volunteers spend tens of thousands of hours all over the State in performing this civic duty to their local government. This technical flaw in the current system makes their time investment of no value whatsoever if other elected or appointed officials simply wish to ignore that hard work and time spent away from family and friends.
I ask that you vote to pass this onward to the full NH House for enactment.
I also wish to thank the legislators who have sponsored this bill.
Thank you for your time and attention and I would be happy to take your questions.
