Missing money? Belknap County budget at risk over revenue that may not materialize

Money from state for pensions, Gunstock revenue at issue


LACONIA — While seeking to forestall any increase on the property tax burden without further depleting an already shrunken fund balance, the Belknap County delegation has written a budget that by projecting revenue that will not be collected, has increased the risk of one or the other.
Rep. Marc Abear (R-Meredith), the principal architect of the budget, flatly declined to comment on the revenue projections.
The Belknap County Delegation has estimated revenues in the budget that include $290,810 representing an anticipated contribution from the state toward the employer contributions to the New Hampshire Retirement System to fund the pensions of county employees. These funds are unlikely to be forthcoming.

Moreover, the delegation inflated the anticipated contribution from the state by assuming it applied to all county employees. But, since the county employs no school teachers, it would have applied only to members of the Sheriff's Department and Corrections Department. County Administrator Debra Shackett calculated that that if the state were to contribute 15 percent funded, the county's share would only be discounted by $75,000, not $290,810.

Meanwhile, the delegation also appears to have overestimated the revenue it expects to receive from Gunstock Mountain Resort. When the current Memorandum of Understanding between the county and resort expired, the delegation asked for $100,000 in negotiating its renewal, but included $175,000 in revenue in its 2017 budget, leaving a shortfall of $75,000.

The delegation could acknowledge its error and submit revised revenue estimates to the New Hampshire Department of Revenue Administration before it begins the process of setting the county tax rate in September. Shackett has calculated that correcting for the shortfall in revenue would increase that the budgeted amount to be raised by property taxes from $12,963,440 to $13,329,250, an increase of 2.74 percent.

Alternatively, by state statute, RSA 21-J:35, IV, provides that if, in the course of computing and setting the county tax rate, the Commissioner of Revenue Administration "finds that the estimated revenues included are inaccurate or inappropriate he shall adjust the estimates in question" and notify county officials of the changes.

Without changes to the revenue estimates, the county could end the year with a revenue shortfall that would reduce the money on hand. The fund balance stood near $3.4 million at the end of 2016. The delegation's budget applies half of that against property taxes in 2017. With a further reduction reflecting the revenue shortfall, the fund balance could dip to near $1.3 million. Shackett projects the tight operating budget will leave scant surplus to replenish the fund balance at year end. She has projected that with minimal operating surpluses, continuing to apply $1 million or more to county property taxes, the fund balance could shrink to less than $1 million in 2018 and 2019.

Moody's Investor Services has pointed to annual appropriations from the fund balance to balance the operating budget among the major fiscal challenges facing the county, and weighing on its credit rating. At the same time, without a stable and robust fund balance in the neighborhood of $4 or $5 million, the county will lack the resources to stabilize county tax rates.