"Real liberty is neither found in despotism or the extremes of democracy, but in moderate governments.
Alexander Hamilton

Friday, October 20, 2017

"Revenue Growth in New Hampshire Is Slowing Down"

Distant Dome

For the last two bienniums, the state has been swimming in revenue with large budget surpluses despite some social service spending issues.

But the gravy train appears to be slowing especially for the four taxes leading the growth over the last five years.

All four taxes, the two primary business taxes — profits and enterprise — along with the rooms and meals tax and the real estate transfer tax, are showing signs of slowing down or leveling off meaning money to pay for priorities will not be as readily available.

Revenue growth has allowed the state to invest heavily to fight the tenacious opioid addiction crisis, add personnel for child protection and mental health programs, fix highways and bridges, and a few public education sectors.

While it is early in the 2018 fiscal year, there have been signs for a while the four foundation taxes have been trending at a slower pace and essentially leveling off.

The NH Center for Public Policy Studies analyzed state General and Education fund tax receipts and determined the strong revenue returns from fiscal year 2016 and the first half of fiscal 2017 have begun to trend more towards a straight line.

“This is due to a marked slowdown in the growth rates of our four ‘workhorse’ revenue streams,” said the center’s economist Greg Bird.

The other 15 revenue sources for the general and education funds have been static for the last two-and-a-half years, Bird said.

“This doesn’t mean the sky is falling,” he said. “The state revenue picture is still strong. But what this may signal is that, in the current biennium, the state may have less leg room to deal with unexpected expenses and potentially less likelihood of a significant revenue surplus than it had in the recent past. Growth in State Revenue has come to a halt.”

Gov. Chris Sununu
In crafting the current biennial budget, Gov. Chris Sununu had wanted to create a special fund to pay for kindergarten expansion, highway and bridge work at the state and local level, and allow the school building aid program to begin taking on new projects for the first time in a decade.

The first-term governor did not receive all that he wanted, but did receive at least a little of what he proposed including additional funding for health and human services programs, some of which were running at a substantial deficit due to budget miscalculations two years before.

Going forward a leveling off of revenues could mean some tough times for some agencies and programs.

The biggest gaping hole in current funding is the University System of New Hampshire, which receives the same funding it had the year before for this and next fiscal year or $81 million annually.

The Community College System, received substantially more money for the biennium than the one before continuing what has been a legislative trend over the past few budgets to reward the community colleges and their students while being less generous with the university system.

With additional funding, the community college system has reduced tuition for its students, but the  university system students either froze or increased tuition over the same period pushing higher education at the four public colleges and universities more and more out of reach for many state students and increasing student debt which is already the highest in the country.

The 2011-12 legislature cut funding for higher education in half. The community college system has returned and surpassed state funding levels prior to the cut but the university has not.

In the prior year’s budget, the university system received about $100 million and that was slashed in the 2012-13 budget to $50 a year.

State funding has increased since that budget but only to $81 million a year.

Another area likely to to feel the impact of future flatline revenues will be the New Hampshire Health Protection Program, or the state’s Medicaid expansion program under the Affordable Care Act. The program provides private health insurance for low-income, working adults paid for through the Medicaid program.

Earlier this year the Center for Medicaid Services told the state it could no longer fund the program using its current method of having insurance companies and hospitals foot the state’s share of the bill – about $40 million annually for the 50,000 people on the program.

The CMS told the state the Medicaid law forbids donations from  service providers unless there is a mechanism that would return the money to the provider.

“In the case of the New Hampshire’s arrangement, CMS believes there is a relationship between the donations and Medicaid payments because Medicaid expansion is conditioned on the receipt of donations as articulated in New Hampshire legislation,” wrote Brian Neale, CMS Director in a letter received July 25.

The letter set off a firestorm of political bickering over who knew and who was to blame, etc., but the message is clear: if the program continues it will need to be state dollars not money from providers.

With revenues growing by leaps and bounds, lawmakers could have at least partially funded the program, but now that will be more difficult if expansion continues beyond its current end date of Dec. 31, 2018.

President Trump
The issue may be moot if President Trump continues his executive orders gutting the ACA which if not addressed by the end of the year will result in a self-fulfilling prophecy to implode the health insurance expansion program.

The state’s priorities of fighting the opioid addiction crisis, and fixing the mental health and child protection systems, and highways and bridges will have to compete with other state programs for money.

Lawmakers are going to have to make some difficult choices in the coming years.

That the four foundational revenue streams are slowing down should not really be a surprise.

Several economists noted the recent slowdown is partially driven by the lack of skilled workers to fill positions. If businesses cannot fill positions with qualified workers as the state aging population retires, they will look elsewhere to expand.

The Department of Administrative Services’ September revenues report shows $111.9 million in business taxes, which is $2  million below what was collected last September.

And the Department of Revenue Administration says businesses sought $8 million in refunds, which indicates their estimates for their tax bills were too high, another indication growth is slowing down.

Another reason for decreasing business tax revenue is lawmakers cut rates the last two terms in bringing them more in line with surrounding states that also have income and sales taxes which New Hampshire does not.

The rooms and meals tax in September actually reflects August sales so it would not surprise anyone if revenues were down given the cold and dreary weather for much of the month.

However for the year the rooms and meals revenues are about $4 million more than a year ago, but are not growing at the rate they were.

The real estate transfer tax has been the biggest grower over the past four or five years as property sales have rebounded nicely from the great recession driven by the financial industry’s love affair with high-interest sub-prime mortgages that nearly crashed the world’s financial system.

Real estate transfer tax revenues are about the same as last September. However, the DRA says there were fewer sales but prices are 7 percent higher making it a wash.

The next few months are not large revenue producers but December is as are March and April. December ends the first half of the fiscal year and should paint a fairly accurate picture of where state revenues are heading.

A rebound would be good news for budget writers, but is probably unlikely.

Three years ago economists told state budget writers the high-water mark for state revenues would be fiscal 2015 and then expect a slowdown, but the state blew through that barrier and continued to grow for another two years.

The growth slowdown is here and difficult choices are on the horizon for lawmakers.

Garry Rayno can be reached at garry.rayno@yahoo.com

Garry Rayno’s Distant Dome runs exclusively on Manchester Ink Link and InDepthNH.org, where Rayno will explore a broader perspective on State House – and state – happenings. Over his three-decade career Rayno has closely covered the NH State House for the New Hampshire Union Leader and Foster’s Daily Democrat, and his coverage spanned the news spectrum, from local planning, school and select boards, to national issues such as electric industry deregulation and Presidential primaries. He is former editor of The Hillsboro Messenger and Assistant Editor of The Argus-Champion. Rayno graduated from the University of New Hampshire with a BA in English Literature and lives with his wife Carolyn in New London.

Thursday, October 19, 2017

Single Bid Received for Taylor Roof Replacement: $24,000

The request for bids for the re-roofing of the winter storm damaged town-owned Taylor building returned only a single bidder. The bid was for $24,000. Town Administrator Walter Johnson will reach out to contractors to determine a repair cost to get the roof covered before winter sets in ( although Selectmen Mudgett advised it will be 70 degrees through March 😁).  As I recall, the insurance payment was in the vicinity of $9,000.
I think that $24k is pricey for a property that does not yet have a firm decision on its future. At this point, do what is the least expensive to protect the building. That in my mind would be something basic such as rolled asphalt over the areas that were damaged. If the building is to be kept and repurposed in some manner by either the town or some other owner it can then be addressed as to a more permanent solution. Do the best you can to protect the structure at the least possible cost until a final decision on the disposition of the property has been made. Esthetics at this point is a non-issue.

"County to push for regional police/fire services "

This article is in today's Laconia Daily Sun. I have often wondered aloud why in a ten mile stretch down Route 25 we three towns with three of everything. If we take a regional approach, we could not only save money, but improve efficiency and service. Worth a look even across county lines. 


LACONIA — Belknap County Commissioners agreed that regionalization of fire and police departments within the county has the potential to save taxpayers money and say that it will be one of the issues they hope to explore further during the budget discussions in the months ahead. Commission Chairman Dave DeVoy (R-Sanbornton), who chaired a study committee in Sanbornton which earlier this examined the possible regionalization of fire services, said that he saw a lot of support for the regionalization of fire and police services in meetings the committee had with surrounding communities. He said that Lakes Region Mutual Fire Aid has already regionalized fire services from an operational standpoint but not from an organizational standpoint. “We need to bring everyone interested in regionalization together to make it happen,” said DeVoy, who asked why there should be 10 police chiefs and 10 fire chiefs in a county with a population of about 60,000. Commissioner Hunter Taylor (R-Alton) supported DeVoy’s suggestion, which came at the opening of a budget review session by commissioners Wednesday afternoon. “It’s an important issue. You can make the argument that the failure to regionalize services has already cost taxpayers a lot of money,” said Taylor. The report issued by the Sanbornton committee which DeVoy chaired said that towns in the county are being placed in an unsustainable position due to the lack of progress on the issue and that someone like the County Commissioners needs to take a leadership role in pushing for regionalization.

Wednesday, October 18, 2017

Affordable Housing in Moultonboro?

The Master Plan Steering Committee meeting last evening began a review of a draft Housing Chapter for the Master Plan update. The two chapters the Planning Board hopes to have ready for a public hearing sometime this winter are the almost completed Economic Development Chapter and the aforementioned Housing Chapter.
A good part of the discussion today was around what is the availability and affordability of housing in Moultonboro. According to Affordable Housing Onlinethe Area Median Income, (AMI), calculated and published each year by HUD, is $63,300 for a family of four for all of Carroll County. (HUD often uses an area larger than a city to determine the AMI because HUD anticipates those searching for housing will look beyond individual cities during their housing search.) 
Using that AMI calculation, how much house in Moultonboro can a family of four with a gross income of $63,300 afford to purchase?  
Therein lies a conundrum.  Factor in the cost to commute to work, child care, energy costs etc., how much is really possible? The U.S. government regards housing costs at or below 30% of one's income to be affordable.
A trend here in Moultonboro is that what may be considered affordable housing starter homes for an AMI of $63,300,  are being purchased by seasonal owners as either a summer residence or for rental income. 
Another important question is this:  can truly affordable housing be built? The answer we think is not the way we are currently zoned. One house per acre each with its own well and septic is expensive to build. The solution is to increase density in certain areas so that the use of common well and septic as one example can help keep costs down.
The answers to these questions are sometimes elusive, and turning them into goals and objectives in a master plan can be challenging.
In the end, the Master Plan takes a short-term and a long-term view of where we should be headed and it is all based upon what we know today and what we predict for the future based upon the best data available.
No one can know for sure what the landscape will be like in 10-15 years, but being proactive with proper planning helps us prepare for the future and retain local control about where we are headed. 

Monday, October 16, 2017

BoS Might Consider Reducing Presence on Some Committees.

As part of the discussion about the composition of the Community Development Advisory Committee last Thursday, the BoS gave some thought as to whether a selectman representative is necessary on some town committees and boards. The BoS did decide to not be represented on the Community Development committee. The consensus was that on this particular committee, it was best to let them be as autonomous as possible.

It sounds like in the future, they may revisit the need for the various committees for BoS as ex officio members. Currently, the BoS sit on the following committees and boards:

  • Advisory Budget Committee
  • Capital Improvements Program Committee
  • Planning Board (Statutory requirement per RSA 673:2)
  • Master Plan Steering Committee
  • Recreation Advisory Board
  • Joint Intermunicipal Ambulance Service Board 
  • BoS/School Board Subcommittee

There is value in having a BoS on these various committees.  They have direct insight into the hows and whys of BoS decisions as well as their goals and objectives.  What these committees would lose is the context of the many discussions and decisions made by the BoS.

I agree that this new committee does not need a BoS member and in fact has been set up to be as independent as a town committee can be. I can't think of any others though where the BoS member is not a valuable, contributing member. 

Each committee makes recommendations and decisions based upon the best available information with the right people at the table. At the other end of the spectrum, I can recall numerous times when fellow BoS members would report back to the full board about the happenings and issues their committees are working on.
 The flow of information back and forth is vital to making the best decisions possible and any changes should be carefully considered. 

Saturday, October 14, 2017

Another Tragedy Unfolding. Say a Prayer for the First Responders and Rescuers

It has been quite a year in terms of mother nature and human tragedy. As I write this, there are at least 31 confirmed dead from the California wildfires, and many still unaccounted for.
There are thousands of firefighters battling the blazes and they are risking their lives every moment they are out there.
There are others too in harm's way.  They have the grim job of searching burnt out buildings and properties for bodies. They will see things that they will never forget and should also be remembered in our thoughts and prayers.
The psychological trauma to all those involved can last a lifetime. Post Traumatic Stress Disorder ( PTSD) can be treated.
We are going to make a donation to NAMI  ( National Alliance on Mental Illness) in support of their efforts to treat and raise awareness of PTSD and in support of first responders and rescuers everywhere.

Friday, October 13, 2017

Discussion on Affordable Assisted Living for Elders

Carroll County Commissioner Mark Hounsel discussing Affordable Assisted Living for Elders ( AALE) with NH House Rep. Karen Umberger.  This was taped last Friday and began airing on Valley Vision public access this past week.

  Discussion on Affordable Assisted Living For Elders from Valley Vision on Vimeo.

Moultonboro Selectmen to Authorize Economic Development Advisory Committee

At Thursdays BoS meeting, the formation of an Economic Development Advisory Group was authorized as a formal town committee.  A proposed charge was also approved. Other than ex officio member Town Planner Bob Ward, the committee will be entirely composed of at-large community members. The general idea of this committee was discussed at the September 28th  BoS work session.  Per the minutes of that meeting: "..a concept to establish an economic development advisory group for the Town to assist potential new businesses and developers of commercial and residential property with selecting Moultonborough by identifying the benefits, advising about the land use process and regulations, and assessing potential development sites for possible obstacles and challenges to development. The group will also provide feedback to the Select Board, Town Planner and land use boards regarding local regulations that may need to be changed in order to promote a more development-friendly atmosphere."
The next steps are for the Town Administrator and Town Planner to prepare a staff report and to advertise for volunteers on the town web and in local newspapers.

Wednesday, October 11, 2017

Health Forum Oct. 18 in Tuftonboro

TUFTONBORO — How would you design a health care system from the ground up? How should we pay for it, reimburse providers, and decide who is covered? You’re invited to join a constructive, non-adversarial, non-partisan discussion about real health care reform on Wednesday, Oct. 18, from 7-9 p.m. at the Tuftonboro Town House. The Health Care Focus Group of the Tri-Town Democratic Committees (Moultonborough, Tuftonboro and Sandwich) is sponsoring a forum for community education on the pros and cons of various health care options.

The speaker will be state Rep. Jerry Knirk of District 3 (Tamworth, Albany, Freedom and Madison). Knirk is a recently retired physician/surgeon who serves on the Health, Human Services and Elderly Affairs Committee of the State House. The goal of the forum is to encourage a robust, nonpartisan discussion and to allow community members to explore their preferences and the associated complexities and trade-offs for each option discussed.

Although this will not be a lecture, Representative Knirk will provide background information on such issues as health care funding, coverage, provider and facility reimbursement and cost-sharing. Please bring your friends and neighbors, and bring your questions! The Tuftonboro Town House is located at 247 Middle Road, Center Tuftonboro, across the street from Spider Web Gardens. This event is free and open to the public. For more information, contact Cindy Stanton at cindy.stanton1@ gmail.com.

Tuesday, October 10, 2017

2017 Moultonboro Assessed Property Valuations Completed. Total Assessed Value Now Over $3 Billion

Overall, 2017 assessed property values increased by just about 3%. The impact on the tax rate won't be known until the NH DRA sets the tax rate later this fall.

Scroll down for the 2017 Carroll County final tax apportionment for all towns within the county. They decreased slightly for Moultonboro, but the percentage is essentially the same at just about 23%. This means that of the $17.6 million Carroll County raises by taxation, Moultonboro taxpayers will pay $3,983,876 of that amount. The county collects tax payments just once per year in December, hence the need for the county to borrow ( and pay hefty interest rates costing about $250K per year) Tax Anticipation Notes (TAN). Unfortunately, not all towns collect taxes twice per year as we do, so the expensive TAN borrowing will continue. Click here for more on that topic.

On the County side, our share of the county tax apportionment is down slightly from 2016 (  23.0195%  or $4,056,860 of the total to be raised by taxes of  $17,623,594.)