Falling revenues from sources other than property taxes putting real strain on Belknap budget

LACONIA — After completing their first pass at the 2014 county budget this week the Belknap County Commissioners found themselves with a preliminary plan that would increase appropriations 2.4-percent to $27,013,237 and the amount to be raised by taxes 7.2-percent — to $14,887,599.

Although the commissioners pruned appropriations requested by county departments by $2.1-million, they stressed that their work was not done. The commission will present its recommended budget to the Belknap County Convention next month.

The amount to be raised by property taxes represents the difference between the total appropriation and revenue from sources other than property taxes, which may include monies drawn from the undesignated fund balance.

The projected increase in the tax commitment is less a function of increased expenditures than of eroding revenues.

Although the total appropriation of $27 million represents an increase over the current budget, it is $2.7 million, or 9.1 percent, less than was budgeted in 2008 and $2.0 million, or 6.8 percent less than was budgeted in 2009. (Total appropriations of $30.3 million in 2010, $32.1 million 2011 and $30.8 in 2012, were supplemented by federal funds distributed through the American Recovery and Reinvestment Act.)

The 2013 budget soured relations between the commission and the convention. The commission proposed expenditures of $26.8-million, which were not only much less than the three previous budgets but also $2.9 million, or 9.9 percent, less than in 2008 and $2.2 million, or 7.6 percent, less than in 2009. However, the commission recommended augmenting revenues from sources other than property taxes by $2,100,000 compared to $3,750,000 the year before, which increased the amount to be raised by property taxes 8.9 percent. The convention reduced spending and adjusted revenues, trimming the tax commitment to $13.8 milion, 1.1-percent less than the $14 million raised in 2012.

Since 2008 revenues, exclusive of fund balance, have declined from $13.4 million to $10.1 million, almost 25 percent. Meanwhile, the tax commitment has risen from $14.3 million to a projected $14.9 million, an increase of 4.3 percent. In 2008, $2 million of fund balance was added to revenues and the commission recommends applying an equal amount in 2014.

Earlier this year Moody's Investor Service affirmed its AA2 rating on the county's outstanding debt, dropping its qualified "negative outlook." The report noted that "the county has managed to constrain expenditure growth in recent years, but the growth rate is estimated to continue outpace revenues."