Smith Boasts Town’s Lowest Tax Rate in Over 40-Years

By Chris Paul

During a discussion about the 2021 Tax Rate at Monday night’s Town Council meeting, Town Manager Kevin Smith notified the board that he thought, given how the town has worked the accounting numbers, residents should see a decrease in the town portion of the tax rate, something that hasn’t happened in over 40-years.

The Town Council finished signing off on what the New Hampshire Department of Revenue Administration (DRA) needs to determine property taxes across the state and from this point it should take about a week to figure out the town’s overall tax rate for the December bill.

Town Council chairman John Farrell noted that tax bill would probably not go out until right before Thanksgiving and would be due just before Christmas.

Finance Director Justin Campo pointed out that taxpayers would get a couple additional weeks to pay the bill this year.

Farrell also added that the rate they would be discussing has nothing to do with the school’s portion of the tax bill. The school submits their own numbers to the state.

Smith began the discussion about the town portion of the tax rate by saying that the current rate $4.66.

He said this year the operating budget increased by only 1.46 percent over last year’s budget, which is one of the main factors in setting the rate.

The other variable is the revenues the town took in over the year and he said revenues have come in higher than expected.

Automobile registrations continue to be higher and the state’s revenue on highways and meals room taxes did not “bottom out” as he thought they might due to COVID. There was also some unanticipated revenues come in such as a health insurance refund and money that was budgeted for use to supply water to Lancaster Road that is now being paid through a grant. The Lancaster project was expected to cost taxpayers $250,000.

Smith said the most important thing to drive the tax rate was the town-wide evaluation. He then noted that going into this year he felt that the rate could have been “catastrophic” because of a number of things happened on the valuation side.

He explained that because of the revaluation of properties in the state, people have more equity in their homes than ever before, but commercial and industrial properties did not do the same.

Smith reminded the board that the town lost over $135 million in tax revenue from the settlement with the Granite Ridge Power Plant, which is a permanent loss. He added that the town also owes Granite Ridge money for the next five years for abatements to the tune of $1.7 million.

This was a large hit to the town’s tax base and was expected to be devastating to taxpayers.

With that said, Smith continued with some good news for residents, saying that because of some good fiscal planning, and surplus of $2.3 million, the town has money to put aside for the abatements going to Granite Ridge for the next two years.

Smith also said that the town has $5.3 million in their fund balance account currently and was hoping the Town Council would allow him to put one million of that toward offsetting revenue. He said $200,000 of that is coming from the Taxpayer Relief Act and $800,000 would come from the Undesignated Fund Balance (UFB).

By doing this, the Town Tax Rate would be at $4.20, but depending on how residents homes were revaluated that might not mean a decrease in taxes.
Smith also told the members of the board that if they do nothing this year to offset losses, the tax rate would be about $4.80.

He cautioned that taking more than the million dollars out of UFB to help with taxes would be dangerous, saying you never know what might happen in the future.

Smith then announced that after looking through town records over the past 40 years, “This appears to be the lowest rate the town has had in 40-years.”

Farrell cautioned Smith and Campo that he felt car registrations would not be as strong next year and to prepare their budgets accordingly.

Councilor Tom Dolan reminded Campo about the $600,000 “make-up payment” that needed to be made to the state a few years ago due to an error made on the DRA spreadsheet.

They pointed out that the money used to pay that came from “the town’s” UFB.

Campo finished the discussion by saying that the rate they came up with is a very solid estimate but the state will determine the final number once they receive the paperwork the council had signed that evening.