State lawmakers will vote this week on whether to accept a deal that would give 18 towns about $540,000 in back tax payments. A state House and Senate committee of conference approved a measure addressing back payments from Massachusetts to towns along the Merrimack and Connecticut River watersheds on Friday.
The towns gave up land for flood control decades ago in exchange for both states agreeing to make up the towns’ lost tax revenue. But Massachusetts hasn't kept up on the payments for years. In a recent settlement, the Bay State agreed to return more than $1 million to New Hampshire.
Peterborough Representative Peter Leishman sits on the House Finance Committee and was part of the committee of conference. He says although New Hampshire has typically picked up the slack for Massachusetts, it stopped during the 2012 and 2013 budget. He says the money over those years won’t be fully paid back under this deal.
The Senate wanted to distribute the whole settlement to communities this session but, “The House felt that we should at least make the communities whole for 2012," Leishman says. "And this past legislative budget, both the Senate and the House approved in making the payments to the communities in both ’14, which has already been sent, and ’15.”
Under the compromise, half of the settlement will go to the state’s general fund. And towns just won’t get last year’s payment. Leishman says lower than projected tax revenue this spring and a recent court ruling overturning the Medicaid Enhancement Tax were among the reasons the House pushed to keep half of the settlement in state coffers.
"And the state of Massachusetts, even as we speak, is still owing the state about $2.9 million, I think it is, in payments that the state has already sent out to the affected communities," he says.
The settlement focused on the 14 communities in the Merrimack River watershed that signed a flood control compact with Massachusetts and New Hampshire back in the 1950s. As part of the deal with the Senate, the House added four Connecticut River towns that were part of a similar bi-state deal, and had also not received payments from Massachusetts.
The measure, which was an amendment tacked onto a heating fuel pre-pay contract bill, affects towns such as Hopkinton, Henniker, and Weare, to name a few.