By Dave Lemery | Watchdog.org
When towns and school districts present their proposed operating budgets to voters, those proposals go up against a “default budget” that’s supposed to reflect the prior year’s spending. That way, the voters get to choose if they want to see local spending – and, in turn, local property taxes – increase.
Where confusion arises is the fact that the default budget is not identical to the prior budget in a few ways. Any one-time expenses that will not recur are supposed to be omitted, and contractually or legally obligated spending increases are included. But these permissible adjustments are not always clear to voters, and accusations have been leveled over the years that some officials are able to surreptitiously inflate the default budget to grow government without explicit voter permission.
Legislation that began in the Senate strictly to clear up any confusion for voters has become somewhat of a partisan flashpoint as amendments have expanded its impact. Senate Bill 342 was amended in March to include a provision forbidding the inclusion of the salaries of newly eliminated positions in the default budget. After vigorous debate, the amended bill was advanced on a 14-10 vote.
Last week, SB342 came before the House of Representatives and once again generated significant debate. The House Municipal and County Government Committee proposed an amendment that went a bit further than the Senate one, requiring that both salaries and benefits of newly eliminated staff positions be omitted. But in a concession to the bill’s opponents, the amendment also provides that positions currently under recruitment or simply being redefined as new jobs would not be considered eliminations.
During House floor debate on April 19, Rep. Brian Stone, R-Northwood, said SB342 is necessary to take away deceptive practices in local budgeting. He said that he’d heard from constituents angry about property taxes and looked into what was happening in his district. What he found was that local school administration expenses were rising without voters really understanding why, he said.
“One example out of many, Northwoods’ voters decided not to fund all-day kindergarten in a warrant,” he said. “So what did the school board do? They snuck it into the budget. And what do you think happened? It passed.
“This is nothing short of a theft of people’s hard-earned dollars,” Stone continued. “The committee amendment addresses these issues by requiring that changes from a default to proposed budget are detailed, discussed with the public, and prevents the school boards from hiding increased costs under the veil of eliminated positions.”
Rep. Timothy Josephson, D-Canaan, was unmoved by the adjustments made by the Municipal and County Government Committee.
“The … amendment allows for positions that are redefined to remain in the default budget,” Josephson said. “But what does redefined mean? It can be argued that a French teacher can be redefined to become an art teacher. They’re both teachers after all, but that’s not very clear and will add some confusion about default budgets.”
Josephson also argued that in cases where staff duties were being replaced by contract workers, implementation of the default budget would mean that the staff eliminations remained, but the contract could not go into effect.
“Let’s say that three public works positions are being eliminated and replaced with contracted services to mow the grass,” he said. “The contract is in the proposed budget and the employees are removed from the default budget. … If this proposed budget fails, the default goes into effect and the town is left with no one to cut the grass and no approved contract to cut the grass.”
But to Rep. Carolyn Matthews, R-Raymond, the scenarios described by Josephson were not likely to create real problems for local governments.
“Building [a] budget is not rocket science,” she said. “Even the New Hampshire Municipal Association agrees. Why? Because as my honorable colleague said, the default budget is just that – a fallback to the budget in place, with certain exceptions listed in statute. If those exceptions are misunderstood or unfairly manipulated, it’s like a screw floating free in a running engine. Trust goes out the window, voters get infuriated, and towns and schools end up in court, which is exactly what is happening today.”
The Municipal and County Government Committee was approved on a vote of 199-138, and the underlying bill was advanced on a voice vote.