No direct aid to municipalities, state included in pandemic relief

LACONIA — A $900 billion coronavirus aid bill that has passed Congress does not include direct aid to state and local governments at a time when the pandemic has cut into tax revenue.

Much government spending goes to fund the salaries of state and local employees, including firefighters, police officers and teachers, so the obvious question is whether significant layoffs will be needed if the federal government is not forthcoming with more aid.

The answer, according to Gov. Chris Sununu, is no.

At a news conference Tuesday, Sununu said the state would be looking at a budget hole of about $50 million, which could be filled with money from the state’s Rainy Day Fund.

“And then, going forward, it’s just about good management,” he said. “I don’t think we anticipate any massive layoffs, or anything like that. I don’t think you’re going to see any major cutbacks or anything. I think it's just about finding efficiencies in the system, being disciplined about your spending.”

“And I still fully plan on, whether the federal government comes through or not, we're still fully planning on presenting a budget with tax cuts in it to really boost the economy. You have a lot of businesses moving in here, a lot of economic opportunities.”

He said the state’s economic outlook is good, despite the disruptions caused by the pandemic this year.

One area of government revenue that has not fared well is the rooms and meals tax.

With fewer people staying in hotels or dining in restaurants, this revenue line dropped precipitously starting in April, when monthly receipts declined to $16.1 million, compared to $26.6 million in the prior year. In May, it was $11.1 million, less than half of the $24.8 million realized in the previous year.

In all, rooms and meals tax revenue of $325.5 million in the 2020 fiscal year that ended in June was off $23 million from the 2019 fiscal year. Through five months of the 2021 fiscal year, there are an additional $29.2 million in declines.

The state shares a portion of this revenue with municipalities.

Last year, the city of Laconia received $848,714 from this source, Gilford got $368,205, Meredith received $326,409, Belmont got $373,582, and Tilton got $186,613.

Laconia City Manager Scott Myers said this is an important source of revenue the city usually receives in December. It hasn’t arrived yet this month.

Meanwhile, Myers said that to date, the city has not seen a significant reduction in revenue due to the pandemic “with the exception of a significant drop off in ambulance billables attributable to reduced calls for service back in the spring.”

“We will continue to monitor programs that may come out of the Federal or State level. Additionally, we will follow the State budget process as it unfolds next year and determine what impacts that may have on municipalities,” he said.

“Finally, we will continue reviewing our local revenue and track it against projections. As always, we will be creative yet conservative in proposing next year’s City budget later in the spring.”

Gov. Sununu said that despite the lack of provision for state and local payments, the legislation awaiting the president’s signature has positive features including funding for schools, vaccine distribution, personal protection equipment procurement, contact tracing and rental assistance programs.

There is also funding for substance use disorders, childcare provisions and transportation.

Individuals making up $75,000 per year are to receive $600 in stimulus aid, with payments phased out at higher incomes. An additional $600 payment will be made per dependent child.

President Donald Trump has criticized the legislative package, saying the individual benefit should be increased to $2,000 and “wasteful and unnecessary items” should be deleted.

Congressional Republicans have been reluctant to spend more on pandemic relief.

The Senate cleared the legislative package by a 92-6 vote after the House approved it 359-53. Those votes totals would be enough to override a veto.