N.H. Delays Setting Tax Rates
Lebanon — New Hampshire town and city administrators are seething over a multi-week delay in the setting of municipal tax rates by the state that could push property tax collection due dates into the holiday season.
Lebanon Finance Director Len Jarvi said the city typically learns its tax rate in the middle of October, and officials need about a week to print and mail the bills. Taxes, he said, are usually due sometime in the first week of December.
“This has the potential of pushing the due date out to around Christmas time, which we’ve always tried to avoid,” Jarvi said. “It’s a tension-filled time of the year anyway, and this certainly doesn’t help.”
The Department of Revenue Administration notified municipal officials on Tuesday that it is waiting on the state Department of Education to finalize school enrollment data on Nov. 7 before setting rates. The change in timing is a result of a law passed last year that altered the way the state calculates student enrollment to determine education aid funding.
Under state law, adequacy aid for a school district is based partly on enrollment, but also may not be less than 95 percent of the prior year’s funding.
“This modest delay in rate setting will: ensure the most accurate tax rates are calculated; ensure the proper local school tax effort is raised; and, prevent potential volatility in tax rates due to reliance on estimated adequacy aid,” the department stated on Tuesday.
The delay appeared to take many municipal officials by surprise, including Hanover Town Manager Julia Griffin, who said she first heard about the timing shift Wednesday morning. Griffin said the change is already creating “huge problems” for communities in the state, and forwarded a copy of an email she had sent to Gov. Maggie Hassan’s office.
“To find this out so late in the process, after we all scramble annually to submit our forms to DRA, is unacceptable,” Griffin wrote in the email. “This is simply no way to (run) state government.”
Enfield Town Manager Steve Schneider, too, chafed at the timing of the delay.
“We typically like to get our rates set in October so that the bills are due no later than the middle of December,” Schneider said. “If we can’t set them until the first or second week of November, then it’s definitely going to push into the holiday season, and that’s the worst thing you can have.”
Schneider also worried that if the taxes are not collected until January of next year, it could affect individual tax deductions.
Also, municipalities in New Hampshire typically have payments due to the county government and school districts in December. Schneider said he did not anticipate a “cash flow” problem but that the town would be cutting it close.
“We have a large payment that we make to the county that’s due usually mid to late December,” he said. “If we don’t have those funds on hand, that’s going to ripple out and begin to affect county finances.”
Julie Clough, executive director of Grafton County, said the county is in “wait and see” mode as it waits for municipalities to make payments. She said taxes are due on Dec. 17, and the county has not typically had any problems with getting payments in on time.
The worst case scenario for Grafton County, Clough said, would be if several of the 39 municipalities in the county were unable to pay. The county would then have to borrow money while it waited for the payments. She added that if both Hanover and Lebanon — the county’s two largest tax contributors — were unable to pay, it could impact the county’s cash flow.
“It could affect us, it may have no effect,” Clough said. “It’s hard for me to gauge at this point.”
The delay won’t affect taxpayers in Claremont, which switched over to a quarterly billing schedule in April. The next tax bill there will not be due until Jan. 2, according to Finance Director Mary Walter.
Haverhill Town Manager Glenn English said the town has not finalized the information it must send to the revenue department to have the rate set, so it’s unclear whether the town will feel the effects of the delay.
“We as a community are not quite ready yet anyway, so it’s not really hurting us right now,” English said. “It may, but it’s not right now.”
Ben Conarck can be reached at firstname.lastname@example.org or 603-727-3213.