County taxes could jump with little to cushion rate
By ROGER AMSDEN, LACONIA DAILY SUN
LACONIA — Belknap County’s fund balance, which has been used in recent years to reduce the amount to be raised by taxes, has shrunk to the point that it won’t be able to shield residents from either a jump in property tax rates or a reduction of services.
The full extent of its decline won’t be known with certainty until the Belknap County Commission completes work on the proposed budget it will submit next month to the Belknap County Delegation.
But commissioners working on the budget have indicated it is highly unlikely they will propose using any of the fund balance to reduce property taxes in next year’s budget.
“Right now we’re not looking at any fund balance being used at all,” said Belknap County Commission Chairman Dave DeVoy (R-Sanbornton). He said that the commissioners expect less than $1 million in the account and that doesn’t include the writing off of uncollectible debts in the Belknap County Nursing Home, which are still being tabulated.
The fund balance is made up of county revenue which exceeds the amount budgeted and operational savings from spending less than the anticipated amount in the various county departments.
The fund balance, which stood at $6.991 million in 2006 and peaked at $8.234 million in 2011, has been dropping ever since. As of Jan. 1, 2017, it was $3.17 million and had been projected earlier this year to drop to $984,826 by the end of the year.
This year’s $27.44 million county budget, which was approved by the delegation over the objection of the commission, projected using $1,675,853 from the fund balance in order to hold the line on the amount to be raised by taxes at $12,963,440, the same as in 2016.
But the amount used from the fund balance jumped to over $2.2 million, with more than half that increase coming from a $290,810 shortfall in revenue that the delegation had projected would come to the county from the state in retirement system contributions that never materialized. The delegation also approved $256,862 in supplemental appropriations, $135,862 of which filled a gap in the Health and Human Services spending caused by a recalculation by the state of the county’s share of the payments for the care of the elderly in private nursing homes.
The other supplemental appropriations were for $95,000 for the Belknap County House of Corrections to hire four corrections workers deemed necessary for opening the new $7.4 million Community Corrections Center and $26,000 for the Sheriff’s Department, which had seen its budget cut by over $126,000.
When the delegation approved the supplemental funds but decided to use the fund balance rather than additional taxes to pay for them, Belknap County Commissioner Glen Waring (R-Gilmanton) said that while taxes won’t increase this year, the result of the delegation’s action was to create a $2.2 million problem next year due to the decline in the fund balance.
“We’re kicking a bigger can down the road, which will come back to bite us all,” said Waring at that time.
Commissioner DeVoy said the fund balance has been used for years by the county delegation to create an artificially low tax rate but those days are now over. Two years ago, when the county delegation increased the amount to be used from the fund balance from $1,775,000 to $2,380,000 in order to reduce county taxes, DeVoy criticized the move as unsustainable and said it was a political gimmick. He had maintained that the funds should have been used to put a new roof on the Belknap County complex.
Commissioner Hunter Taylor (R-Alton) warned of the dangers of depleting the county’s fund balance and underfunding county government obligations. Two years ago, Carroll County had completely depleted its fund balance and had to seek an emergency loan in order to complete its fiscal year.
He said Belknap County taxes supporting county government are the lowest in the state, and points out that Carroll County, which has two-thirds as many residents as Belknap County, last year spent $31 million to support county government, more than $3 million more than Belknap County.
Taylor said 44 percent of the revenue raised by taxes by the county goes to the Health and Human Services budget account, which is the money the county pays to the state for the care of elderly in private nursing homes and which the county does not control.
Legislators have agreed that amount will be increasing in the near future as the county’s elderly population increases.
Rep. Norman Silber (R-Gilford) has advocated that the county privatize the county nursing home as way of saving money. But commissioners two years ago rejected that idea when it was proposed by former Commissioner Richard Burchell, who was defeated by Waring last year in the Republican primary.
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