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

Saturday, January 3, 2015

Tax and Property Valuation History- Part 1
























As I continue to review the proposed 2015 budget, I have done  a fair amount of research. I believe it is important to put things in historical perceptive as it helps answer some basic questions, such as how have the decisions made impacted taxpayers? Are we providing the right level of services? Decisions made years ago can have a long lasting impact and not always in a good way.
Sometimes as the saying goes, you can't see the forest for the trees.
The above chart is pure data. All of it is derived from the NH Dept. of Revenue Administration. It is interesting however, but a little " busy" to follow. I went back to 2009 as a benchmark year as that was when the " great recession" was probably at it's peak. I also used 2010 as a second benchmark to compare the impact.

Here are the highlights:
  • Since 2009, total assessed value for the Town of Moultonboro has decreased by $132 million. 2013 was the low at $146 million less than 2009.
  • The Town portion of the tax rate increased by 22.11% since 2009, but...far less since 2010,  7.72%.
  • In terms of tax dollars, using a hypothetical $300K home,your tax payment increased 15.06%  over 2009 and 13.09% from 2010.
  • In 2010, the Town tax appropriation increased by nearly 15%. but....since 2010 the increase is 4.15%
Many things impacted the big changes from 2009 to 2010.  A major driver was the real estate meltdown and recession. Over the next five years things seem to be relatively flat, but looks can be deceiving. For instance, we retired the $464,000 annual debt payment for the Life Safety Building but that annual amount was not reduced from the expenditure side of the budget. The 2010 budget was crafted with that additional " bonus" money. The problem with that is that the building in essence is never paid off. Over the past five years that is about $2.3 million. I get that there might be some flaws in my argument, but my main point is that you can't keep adding new debt on top of old debt forever.

A few other things to consider. There is the effect of the reduce property assessment. Using the previous years Town tax rate, the reduction in assessed value of $132 million translates to about $360,000 in lost revenue.On the plus side, ( at least in terms of budget) we divested the VNA and reduced the operating budget of the recreation department by slowly spending down the Rec. Revolving Fund. The VNA savings alone  in year one of 2014 was estimated to be $340,000. The Town also has made a point in recent years of annually funding our many reserve funds to help defray the cost of major purchases that the funds were meant to support.
 I will write more about this in the coming days and weeks leading up to the budget hearing and Town meeting and hopefully drill down a bit deeper and figure out where all the money goes. This is important to me as that is a major part of the job of the BoS. I am not in favor of cutting just to cut, but I am opposed to doing things simply because we can. I want every Town department to have what they need to operate and fulfill their mission, but we need to seriously think about what is our ceiling for a tax rate. We are creeping towards $10.
The bottom lines is that I want to be sure we are spending your money wisely and responsibly.

17 comments:

Figures Don't Lie.. said...

Keep an eye on the equipment leasing too. That is used to make the books look steady, but is debt, and can dig you a real hole.
Another cash equivalent is the list of town owned properties. That is up to 65 units, as shown in town Annual Report. Until 3 years ago, the report showed the total value of town owned land. That one line, the total, has been taken out of the town report. Cute Trrick.

Good Job said...

Great to see this data presented to us, and done by A member of the B O S. Slowly, one member is leading us back to the way a town should work. Now we must do our duty, and read it. Many thanks to Mr Punturieri.
We also need to remember that this site is wide open to the rest of our B O S. Will they explain.........?

Joe Cormier/jcormier2@myfairpoint.net said...

Maybe it's time for an Official Budget Committee.

http://www.nhmunicipal.org/TownAndCity/Article/531

http://www.gencourt.state.nh.us/rsa/html/III/32/32-15.htm

SB-2 would also help.

Just saying ... just an opinion ... my MBA has nothing to do with it.


Anonymous said...

An official budget committee......Heavens, the Town Administrator would not want this. The advisory budget committee already takes up much of his time. It is time consuming to bypass, and ignore the existing committee of citizen - taxpayers.
Some day we might consider a different T A, one who would welcome citizen participation.

ABC fan said...

Good job Paul!
You are correct that debt is retired but the spending level continues.
I am curious about the creep at Public Works. Maybe it is time to have the discussion on outsourcing those skills rather than build an army and infrastructure in house.

Do You Believe..... said...

Total Valuation of town down 4.65 % compared to 2009...Looking at real estate sales, and the number of properties on the market, I really question that figure.. Values ore determined by actual sales. With the low turnover, we must be short comparison figures. If things start moving again, we may see a decrease in value of 10 or 15 %. Much more in keeping with recent sales. This data lag is creating a false sense of town finance.
If lakefront taxes, 75 % of our income, take a 15% decline, that will have to be paid by non lake property owners, or we will need big spending cuts to cover the loss. This bind is approaching.

Joe Cormier/jcormier2@myfairpoint.net said...

Here's another comparison, not by year, but by town.

Market fluctuations would be by market locations and unique specifics to those towns.

http://www.revenue.nh.gov/mun-prop/municipal/documents/2014-local.pdf


Anonymous said...

Seems like the waterfront owners will still carry the burden of uncontrolled spending as most if not all of the BoS represents in-land interests. How do you correct this inequity?

Participate Please said...

First, thank you for the 75 %. You provide more then we can intellegently spend. I do not think we have a BOS discrimination problem versus lakefront. We are treated the same..NONE OF US are getting the quality of government that we are paying for. Our ruling five BOS are citizen - volunteers, and admit they do not have time for minutia...areas that really determine our quality of life here. They also have an unbelievable amount piled on their plate by an over-active Town Administrator.
Were I lakefront nonresident, I would want an owners association to represent me, with a leader dedicated to issues in town hall. I do not think the BOS would buck this...they know they need help.

Dissatisfied Waterfront Owner said...

To Participate Please, I doubt very much that you are a waterfront owner as I am certain if you were, you would quickly understand that your assessment sway over the actual value and that your taxes are excessive.

My house was duplicated by my builder off the water in an access community. The lot of the off water property is 4 times the size of my lot and I only have a 100 feet of frontage yet my assessment is 4.3 times higher; that is 430% higher. I tried for over 9 months to sell at an asking price of 94% of the assessed value and received not one legitimate offer.

Please, "Participate Please," check the facts before commenting.

Anonymous said...

All we need is a resident/non resident split tax rate. Tax non residents at 50% of value based on their not using services / schools all year ling and the process will settle itself out. Non residents get screwed and have no voice at all. Non residents need to band together as a group and really press the town. Spending is out of control with lots of dreaming on projects....and significant over regulation of the lakefront properties under the guise of protecting the water. There will be a tipping point.

Terence C. Jatko said...

This "level funding" scam is the bait and switch of the political world. The bond issue is sold as "only costing you this much for this many years". After the bond is retired it's then "we can do all this extra with NO increase in taxes". Those not paying close attention actually interpret this as fiscal sanity, and budgets creep ever upward.

Anonymous said...

Disatisifed, you and the earlier commentor are saying the same thing. The gravy train has got to stop. WE pay far too much in taxes to support every cockamamie idea that comes down the pike and they just increase the property values of the lakefront owners to pay for it.

B O S..Please Dig Deeper said...

Good comments here with a common thread. We must remember.....it's the SPENDINGS that drives the tax rate. The BOS is now doing a budget review for next years spending Four out of the five sit quietly and approve every request. They think the town can still aford this.
Their thinking is based on obsolete data. The numbers of the town total apprased value are approved by the state, and correct, as they follow state rules...there is the problem...their methodology in intrepreting the numbers.
As the chart at the head of this blog shows, they think property values have declined LESS then 1 % per year for the past 5 years.. We all need to explain this to the BOS, and also be sure all the voters know that a BIG total assessed value decline is coming. It is not " business as usual ". They are leading us into a bind.

Anonymous said...

One small step for mankind, we taxpayers, would have been to increase the participation percentage for health care by those on the payroll. That failed 4 NO,and 1 YES by our BoS. That was an easy one and they missed the boat. What does that tell you?

Anonymous said...

This failure by the B O S to get employee healthcare policy's more partly paid by the employees will burn all of us when the Caddilac tax kicks in on top end policies. Our coverage on town employees is considered Caddilac, and may cost the insured an extra tax bill of $ 4,000 or so.
The natural tendency will be for employees to ask for financial help to pay this tax. We will need to protect the coffers on that one.

QT around Town said...

We need to elect another member on the BOS that will think of the tax payers and not just get elected to build a gym/rec center or rubber stamp town employee dream expenses or the TA's endless agenda items. Someone needs to help our newest member of the BoS. It's pathetic to see the same old 'sure, let's do that'endorsement. Those of us that work in the private sector no longer get all the bennies that the town employees get. It's unrealistic any more.