Towns Worry About Loss of State Revenue

Town officials didn’t want to hear these words.

"This budget suspends revenue sharing, rooms and meals distribution and reduces the state's contribution to retirement costs from 35 to 30 percent, level-funding it with this biennium."

That was Governor John Lynch earlier this month giving his budget address.

The Governor went on to say the state would continue to send aid to communities and that in some cases it would increase.

But local officials have not expressed much confidence in those assurances.

And Lynch has had to address the issue several times as he did before lawmakers last week.

"As I’ve said, I’m quite certain looking at the numbers that there will be more money going to cities and towns in the next biennium than they received in this biennium."

But those cities and towns are calculating their budgets for fiscal year 2010.

And the bottom line scares them.

Neil Wetherbee is a town councilor in Derry, the state’s fourth-largest community.

Wetherbee’s town is slated to lose $1.9 million in state revenue in the next biennium.

"I nearly fell off my seat. We made it public on Tuesday."

Derry’s annual budget runs roughly 40 million dollars.

So 1.9 million translates into a nearly 5% reduction.

"With that big a chunk of money, I don’t think anything is immune. That’s not laying-off a couple of guys mowing the lawn or something like that. You got to really cut to the bone to get 1.9 million. And, it’s def. going to hurt."

And that pain is likely to come in the form of job loss.

Town Administrator Gary Stenhouse anticipates that Derry may have to cut 10 percent of its staff.

"It’s not a threat. It’s just the way things are. If you take debt service out of our budget, which we’re required to pay, 80-plus percent of our budget is the salaries of men and women who work for the town. So if I have to reduce the budget by another $1.9 million because of the loss in state aid, I’m going to have to reduce staffing. There is just no way around it."

It was not as though Derry was coasting before this budget crisis.

Tax collections are behind schedule, vehicle registrations are down, building permits are nearly non-existent and recycling revenue is dwindling.

Hundreds of homeowners have defaulted on their mortgages, leaving Derry one of the state’s worst hit communities for foreclosure.

The property tax rate is also high.

The average $270,000 home is costing the homeowner nearly 7 thousand dollars in property taxes.

Resident Howie Lund is with the Alliance of Derry Taxpayers, which is working to lower Derry’s tax rate.

"When you look at Derry’s tax rate being higher than 94 percent of the communities in the state of which there is approximately 259, that has a lot to say with regard to the ways things are being run. 1.26
For now, Derry is focusing on the immediate crisis, and that’s raising revenue."

The Town Administrator Gary Stenhousse described himself as optimistic.

"I don’t think things are going back to where they were two years ago but I’m hopeful that they’ll be able to put something together in Concord, realizing these tough economic times, but at the same time, not balancing the state budget on the backs of the towns and cities."

Derry may be in better shape than most communities in the state….at least in terms of time.

Smaller towns will be passing their budgets in a few weeks during town meeting.

Derry can wait until the end of May.

By then, the town may have a better idea of what the may be able to expect from the state’s budget.

For NHPR News, I’m Robin Respaut in Derry.