EAD > NH Towns Find School Funding A Taxing Issue
NH Towns Find School Funding A Taxing Issue
BY PETER RIVIERE Staff Writer
With first tax billings due out in 10 days, tax collectors and town administrators are scrambling to sort out their billing options under the state's new educational funding law.
It has been nearly a week since the new law was passed but the disbursement figures remain scarce.
"The Department of Education has promised school districts the data at the end of this week," said White Mountains Regional School District Superintendent Jim Gaylord.
Meanwhile, the Department of Revenue Administration said it will have the numbers out by mid-May.
To help town administrators and tax collectors prepare their tax bills and understand the new law and its impact on tax billing, a conference is being set for Thursday in the Legislative Office Building in Concord with DRA and the New Hampshire. Municipal Association staffers present to explain new provisions of the law.
To date, the simplest advice seems to be for towns with semi-annual billing cycles to use last year's tax rate, divide it in half and send bills out. The second billing in December would then adjust the amount of the total tax obligation up or down, depending on whether a town is a donor or receiver.
Because many towns will receive funds from the new formula, the second billing could be a reduction. No one will know for sure until the actual figures are released.
Don Jutton, Littleton's interim town manager and a principal in Municipal Resources Inc., advised towns to be cautious in what they assume will be state education funding levels.
He is counseling towns to set up overlay accounts to anticipate that adjustments in the final tax rates and grant receipts may not be what was calculated or what has been published in the daily newspapers.
While sorting through the complex issue this week Jutton had much to say.
"I realize it's easy to criticize when you're not in a position to make a decision, but somebody has just not thought this through," he said.
He was especially critical because many receiving towns in the southern tier of the state have high per-capita and median family incomes.
"This is a huge issue. No thought has been given to ability to pay. From my perspective, to send money back to Rockingham County in that magnitude is folly. It's going to create more hate and discontent.
"I can't imagine what some folks up here in the North Country are going to feel like when they see all that money going to these towns," said Jutton.
He noted that Salem, one of the Rockingham towns expected to receive a large portion of state education funding grant money, "is not a poor town. They have a healthy tax base of $1.6 or $1.7 million."
Haverhill Town Manager Glen English said the town would be on the same billing schedule as last year, although the actual numbers are not due for a couple weeks.
Gaylord pointed out that much of the public does not understand that most of the funding in the $825 million settlement is not new funds.
"We've been carrying kindergarten and school aid funds for years in our budget," he said.
Even the statewide property tax revenues are not new funds because they simply represent a new rate and term for funds that property owners already are paying as local school taxes.
Indeed, the two sources of property taxes - local and statewide - are so similar that DRA will allow towns to carry the two separate sources as one line item in the May billings. Computer software limitations are given as the reason for this latitude.
The new law will also mean the state will bill all utility property which will be paid directly to the state.
Phasing in of payments for donor towns means the amount shown in Saturday's Caledonian-Record chart represents but 10 percent of the total contribution.
Littleton Representative Brien Ward explained that the phase-in would see proportional shares of the total contribution prorated at 10 percent the first and second years, 25 percent the next two years and 30 percent in the last year to reach the full 100 percent in the fifth year.
So Coos County's unincorporated towns' rate of 60 cents for the first year is really only 10 percent of the ultimate $6.60 per acre that will be assessed on the mostly timberland properties now paying pennies per acre, if any property tax at all.
Lancaster town manager Pat Kelly advised people to be patient and let things settle before deciding what to do with the supposed windfall.
Towns have been instructed they can use the new funds to provide tax relief, improve education or spend on needed town equipment or staff. To change the spending plan approved at town meeting would require another town meeting vote for which interim legislation provided.
Another cautionary note from Kelly is that the earlier disbursement charts were based on 1997 assessment and school budget figures. WMRSD voters added about $600,000 to the spending side of the budget in its March balloting.