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 Municipalitiesthe New Hampshire Center for Public Policy Studies measurethe 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.