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State cuts could force special town meeting in Groveton

July 15, 2009
NORTHUMBERLAND — Selectmen in Northumberland planned to broach the subject of holding a special town meeting at their Monday night session, throwing the idea out to the voters and department heads after receiving grim news on their budget revenue.

Estimates released by the Local Government Center on June 26, show the revenue sharing that was suspended in the state budget for this year and next (fiscal years running from July 1, 2010 to June 30, 2011 and July 1, 2011 to June 30, 2012) will likely result in $283,577 less in the Northumberland town coffers.

District one Senator John Gallus (R-Berlin), who represents all of Coös County, did not vote for the state budget and said it will affect all of the communities, including those in the state that can least afford it. "This thing is not fundable or doable. They're trying to balance it (budget) on the backs of the community," Sen. Gallus said.

In both years Northumberland will lose out on that money, but next year the voters can plan for it at town meeting. This year's budget has already been set, since the municipal fiscal year runs from January to December and the budget was approved by voters in March. Tax rates are then set in October. "It's silly. These towns already planned their budgets and we go and throw a wrench into it after the fact," Sen. Gallus said.

Northumberland selectman Jim Tierney said the only way to save the taxpayers from an inflated tax rate come the fall is to hold a special town meeting to reduce the already slim budget's bottom line. "We know there's going to be no shared revenue this December," he said. Without the revenue, taxes would have to be raised to offset the spending already approved by the voters. Mr. Tierney estimates that this would cause an increase in the tax rate of at least $2 per thousand of assessed value.

In order to address that looming increase, the selectmen will be talking to the taxpayers about the option of a special meeting. "That's going to be the discussion," Mr. Tierney said. "How do you feel about having another town meeting?"

The legislature created a law allowing special meetings for this year only, specifically in anticipation of predicaments like the one Northumberland finds itself in as a result of the new state budget. The law allows for a special town meeting to be called without the normal petition to superior court that would be required. The rules of HB 239 require that the meeting be held only for the purposes of bonding, reduction of appropriations, or issues pertaining to the acceptance and administration of federal stimulus funding.

Mr. Tierney said that if the conversation on Monday night had voters leaning toward a special meeting, then town department heads would be asked to make meaningful budget cuts to carry them through the rest of the year so that a reduced budget could be presented to voters. "It has to be something that's going to really make an effect on the tax rate," he said.

The town's other option would be to slow down spending without a town meeting in order to affect next year's budget favorably. That would not alleviate the pressure people are already feeling to pay their tax bills or offer any relief to the higher bills that would still take effect in October, Mr. Tierney explained.

Northumberland property owners are already struggling to pay the first issue tax bills that were due July 1. Around 20 percent of the $1.6 million levy has yet to be collected by the town as of last week, Mr. Tierney said.

In addition to facing more of the burden of their budget, Mr. Tierney said the overall valuation of the town has gone down. The reduction in value of the mill complex has meant that it takes less of a change in any area of the budget to have a significant impact on residential and commercial property taxes in town.

If the town does move in the direction of a special town meeting, Mr. Tierney said it may not alleviate all of the tax bill woes. He noted that some of the suspended revenue sharing was also slated to go to the county and that cost will likely be passed along to taxpayers in October when the Commissioners announce their tax rate.

While Northumberland will not receive any shared revenue from the state, they and the rest of the municipalities will continue to receive a portion of the meals and rooms tax. After raising the tax to nine percent and expanding it to include campgrounds the state budget maintained its disbursements to towns; it's estimated that Northumberland will receive just under $110,000 from the tax.

Northumberland is not the only town set to lose thousands or hundreds of thousands in revenue as a result of this budget. Municipalities all over the state are faced with revenue shortfalls. In Coös County, Berlin will be hardest hit with their estimated suspended revenue sharing coming in at more than $1 million. Clarksville, at the northern reaches of Coös, is at the other end of the spectrum having to compensate for an estimated $1,319 in suspended revenue sharing.

Varney Smith
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