Council Approves Increasing Tax Credit For Local Veterans

By Alex Malm

During the May 9 Town Council meeting one of the agenda items was in regards to raising the tax credits for veterans in town.
It was explained by Town Manager Mike Malaguti that currently the “Optional Veterans Credit” and the “All Veterans Tax Credit ” are both set at $500 which was the maximum amount under state law when it was amended the last time. He explained that in 2018 the state authorized increasing it to $750 however Londonderry didn’t increase it.
Malaguti said that his proposal was to increase it to $625 for now which would cost the town an approximate $115,000 depending on how many people take advantage of it.
“Doing so wouldn’t be without fiscal cost,” said Malaguti.
He explained that changing tax breaks outside of budget season isn’t a smart budgetary practice which is why he only proposed going halfway this year.
Town Council Chairman John Farrell said that he also had concerns about increasing it to $750 this year due to the fact that they would have to find the money somewhere else. He also pointed out that they can’t use the unassigned fund balance to pay for it.
“At some point the revenue has to come from somewhere. When we give tax credits it only comes from out of the town budget. It doesn’t come out of any other budgets,” said Farrell.
Farrell also pointed out the tax credit doesn’t affect the school budget.
Despite it not being a good budget practice Malaguti said that it is important that they recognize veterans in town.
“It is important to recognize the service that our veterans have made,” said Malaguti.
Town Councilor Joe Green said that in 2018, when it was first brought up, he proposed increasing it to the maximum. He said that he wanted to propose raising it to $750 for both credits.
Greene also pointed out that he doesn’t know if everyone will take the tax credit.
“I’m hoping that the people who really need it will come forward,” said Green.
Christine Perez said that she brought the issue forward before budget hearings and blamed former Town Manager Kevin Smith for not bringing it forward.
“These men and women served, they deserve this, it’s been a longtime coming,” said Perez.
State Rep. Doug Thomas said that he supported increasing it to $750 and noted that even though he is a veteran he doesn’t take the tax credit.
Town Councilor Deb Paul asked if they were allowed to increase one of the benefits to $750 and the other to $625. Malaguti explained that both of the tax credits had to be the same.
Malaguti told the Town Council that because of the cost of everything being on the rise due to inflation he is more concerned about paying for it during the next fiscal year if they increase it to the maximum amount than he is this year.
He said that if they increase it to the maximum amount the projected cost is around $236,000.
“I’m actually more nervous about the next fiscal year than I am about the current fiscal year,” said Malaguti.
The Town Council voted 3-0-1 in favor of increasing the exemptions. Town Councilor Chad Franz abstained from the vote since he takes the exemption.

Newsletter Updates

Enter your email address below to subscribe to our newsletter