New Hampshire: The Real Facts

City Budget

My hat is off the City Finance Committee for actually listening to the public and acting upon the public’s request to lower the city’s portion of the property tax from 4.8% to 3.9984%. In a real sense, watching both school and city government activities is rather new to me. I am one of those guilty citizens who rarely got involved until I retired early last year. I am learning a lot of lessons along the way.

What I learned during the recent city budget public hearing, Finance meeting, and city council meeting, which approved the budget, was fascinating. I was hopeful that the City Council would indeed bless the decrease. And they did. However, I was equally interested in the personally dynamics while watching each council member as they were debating the issue. There were a handful of councilors who were willing to consider further cuts. That was commendable.

However, what fascinated me the most was that there were those (actually most) who stayed mute on additional budget decreases and made no good faith attempt at all to think of a single idea. I would encourage those councilors who did not contribute toward budget cutting ideas to re-evaluate their duty to both the city and citizens. Some of you have been voted into office by a sizable margin of citizens. Those voters have expectations that you will fight for their financial concerns as well as the city’s concerns.

Getting back to the good side of the issue, the entire council, with the exception of Councilor Bendzinski, did see fit to approve the newly decreased budget. Bendzinski stood on principle that the budget exceeded the City’s self-imposed CPI (Consumer Price Index) guidelines. He makes a good point. What good is a guideline if one constantly exceeds it? The guideline also does not include the New Hampshire Retirement Service (NHRS), welfare payments, and debt service payments. This means that these exceptions automatically, in the majority of cases, bring the property tax increase above the CPI guidelines. At the Public Hearing I made mention that the CPI (better known as the inflation rate) is a measurement of the yearly increase of goods and services. However, it is a not a measurement of a workers increase in salary and benefits.

In other words, it is very possible that the CPI could go beyond a worker’s capability to pay. At the Public Hearing I recommended using the ECI, which is a measurement of the average workers yearly salary and benefit increases as recorded by the U.S. Bureau of Labor Statistics. Usually the ECI and CPI reflect each other but one could be higher than the other in any given yearly period. In fact, historical data collected shows that the ECI was consistently higher than the CPI by a fair amount between the 1997 and 2005. Some municipalities use a combination of both CPI and ECI. (Example: 60% CPI, 40% ECI).

The concept I was trying to express was that if the city decides to use the ECI, it should then be the sole guideline with no exceptions to the rule, such as, the now present exceptions of NHRS, welfare payments, or debt service increases. Iron clad discipline is required to follow a single guideline; otherwise, as Councilor Bendzinski says, “What good is it?”

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