An Uneven Playing Field: The Disparate Impacts of Local Aid Cuts to NH Municipalities

By Todd Selig

In presenting his budget message in February, the Governor proposed several changes to the way the state provides financial assistance to New Hampshire’s cities, towns and school districts. That assistance, known collectively as local aid, takes many forms: public employee retirement costs, school construction, special education expenses, among others.

 

Cuts to local aid are often described as “downshifting,” or the pushing of costs to local taxpayers in an attempt to save money in the state budget. Since the only major revenue source available to cities and towns is the property tax, the shifting of state costs to municipalities often results in higher local property taxes, a trend that has been occurring for the past decade.

 

Given the intense financial pressures in drawing up the next state budget, some degree of downshifting in the next biennium is actively being discussed.  In a newly released report attached, An Uneven Playing Field: The Disparate Impacts of Local Aid Cuts to NH Municipalities, the New Hampshire Center for Public Policy Studies measures the various ways that cuts to local aid programs would be felt in communities across New Hampshire.    

 

The report includes a town by town and city by city list of aid to communities which may be very helpful to you in understanding budgetary impacts to the communities you cover.     

 

I am hopeful that you will review the Center's report to gain an understanding regarding the impacts of budgetary decisions at the state level for our towns, cities, and school districts and ultimately for local property tax payers.

Comments

[Rick Olson]

Okay...fairly reasonable analysis...So we read the report, digest the data (as best we can) THEN WHAT? Lets assume that most who actually take the time to drill down the data (no formulation metric provided, I observe) and gain some understanding of who, "wins" and who, "loses" under assumptions that cost-cutting measures downshift costs and expenses...The 800 pound gorilla in the room becomes the so-called need for regressive income or sales taxes.

From a philosophical viewpoint, this data might well speak to contemporary spending behaviors of municipalities with all the bright red directional arrows pointing away from austere measures. Focusing on the impact of cuts alone suggest local spending is where is needs to be or should be and there are a significant number of people who reject that premise.