Nashua adopted a budget cap by its charter through a city-wide referendum in the year 1993. The
cap on spending was enforced over a 25-year period, with only a few “override” votes, until the city
government decided to permanently exclude about $17 million from the cap for sewer expenses
through the adoption of an ordinance.
- I filed a Writ of Mandamus in NH Superior Court against the city, soon joined by Alderman Dan
Moriarty, claiming the sewer budget exclusion violated Nashua’s spending cap. Contrary to an expedited decision we found ourselves embroiled in a protracted court fight that ultimately decided in our favor on the merits of our lawsuit, i.e. the sewer budget exclusion violated the spending cap.
We want to thank Fred Teeboom for this Contribution. If you have an Op-Ed or LTE
you want us to consider email us at Editor@GraniteGrok.com.
Related: Sen. Avard Statement on House Passage of SB 52 – “Municipal Tax Caps”
- NH laws were revised effective July 5, 2011, to authorize cities and towns to adopt a cap on taxes
or spending, subject to an override provision. The clear and unambiguous intent of the NH
the legislature was to protect previously legally adopted tax or spending caps “of any kind” with a
grandfather provision, regardless of whether the language such previous caps matched the
language of the 2011 statutes. - Ignoring this grandfather provision, the court also found the override provision of the Nashua
cap did not conform to the 2011 statutes and was therefore unenforceable. But without having
called a supplemental hearing on this question and without the city having claimed the validity of
the override provision as a defense, Judge Temple declined to definitely declare the Nashua
spending cap invalid. - Nonetheless, immediately following the publication of the court’s decision Mayor Donchess
declared the Nashua spending cap unenforceable and ordered it discontinued. - I appealed, but the NH Supreme Court, with a 3:2 split decision, ruled the grandfather provision
in the 2011 statutes invalid, thereby threatening the validity of all (a total of 7) tax and spending
caps adopted by NH municipalities prior to July 5, 2011. - The enactment of SB52 into NH law, effective August 20, 2021, again expresses the legislature’s
unambiguous intent that tax and spending caps legally adopted by municipalities before July 5,
2011 are valid, legal, and fully enforceable after that date. Thus, as of August 20, 2021, the
Nashua spending cap is again valid and fully enforceable. - Furthermore, SB52 addresses a technical issue relating to budget items not subject to the cap.
According to the 2011 statute, a tax or spending cap adopted by cities or towns may allow
specific enumerated budget items such as grants to be excluded from the cap provided such
exclusions are adopted by their local charter. - SB52 further stipulates that any municipal action that redistributes excluded budget items from
within the limit of the capped budget to outside such limit requires a supermajority vote.
10. The net effect on Nashua is that as of August 20, 2021, the spending cap is back, the same as written
in the year 1993. With the further condition that budget items excluded from the cap, if authorized
by state law, can be adopted by our charter. - Exclusion of budget items from the cap cannot be adopted with exclusively a local ordinance.
- All exclusions currently written in the Nashua Revised Ordinances (other than capital
improvements and bonded debt when exempted under the override provision) are no longer
valid since none have been adopted by the Nashua charter.
Fred Teeboom is a former Nashua Alderman-at-Large and the author of the Nashua Spending Cap
