Orford Still Owes Even Though Tax Bill Error Was State’s Fault
Orford — Chris Crowley put off opening his December tax bill for several days because he thought he knew what was inside.
When he opened it, however, he found a pleasant surprise: The school portion of his tax bill had dropped by 9 percent.
Crowley was perplexed. He knew the bill from the Rivendell Interstate School District should be about the same as his June tax bill. He also knew that the money from the state wasn’t supposed to change and the number of properties on the grand list should have remained the same — all factors that would change a tax bill.
“How could the number change by 9 percent? It didn’t make sense,” Crowley said.
He was right, it didn’t make sense, and now the town is having to pay. But to make up the difference, the Selectboard has decided not to send out a new tax bill, but instead borrow the money from a rainy day fund.
Crowley acquired a tax rate computation sheet, and after a few calculations, he discovered that the town’s New Hampshire education grant had been doubled, erroneously, from $327,707 to $655,414, a mistake that originated with the state Department of Revenue Administration.
The mistake affected only Orford’s tax bill and didn’t occur in other towns, said Stephan Hamilton, director of the property appraisal and municipal services division of the DRA.
“These kinds of calculation errors rarely occur but they do happen,” Hamilton said. “We regret the inconvenience to the town. We have tried to understand how it occurred and we’ve taken steps to insure it won’t occur again.”
After the DRA set Orford’s tax rate on Nov. 13, the Selectboard had 10 days to request a recalculation, but officials didn’t notice the error until after that period had expired, and Crowley raised the discrepancy.
“When we were setting the tax rate, we saw that the school portion was down so much, we said, ‘Hey, this is just great,’ ” Selectboard Chairman Tom Steketee said. “If it sounds too good to be true, it probably is, and sure enough, people figured it out.”
The tax rate that was sent out to residents was $24.83 per $1,000 of assessed value. The rate should have been $27.07 per $1,000 of assessed value, Hamilton said.
The current tax bill is due on Dec. 20, and Steketee said the town could have sent an additional tax bill to make up the difference, but the Selectboard has decided not to do that.
“People who had already got their tax bill had already made their plans, and to go at them again wouldn’t work on any level,” Steketee said.
The DRA also gave the Selectboard the option to request an emergency expenditure from an unassigned fund. The DRA recommends that each town retains a minimum of 5 percent of the town’s total budget expenditures — including town and school funds. In Orford’s case, it had nearly $500,000 in the unassigned fund before the withdrawal of the $327,707, Steketee said.
Hamilton said that there is no law that requires a town to keep a minimum amount of money in the fund, and there are even some towns that have a negative amount in their fund.
Steketee said the town was hoping to use the unassigned fund for bridge work and had built its fund up before the recent withdrawal.
Steketee said he’s not sure yet how the town will find the money to replenish the unassigned fund, but said tax payers will eventually see it in their tax bills. There is no rush in replacing the unassigned fund, Steketee said, and it could take two or three years to do so.
It’s possible that the Selectboard could reduce other expenses in upcoming budget years to make up the difference, Steketee said.
“I’m not terribly worked up about it,” Steketee said. “People make mistakes.”
The DRA has had to deal with a reduction in staff that occurred more than a year ago, and it caused the department to start setting the tax rates a week late this year. But Hamilton said the mistake in Orford’s tax rate was not due to a reduction in staff.
“This is just plain error. Unfortunate, regrettable,” Hamilton said.
Sarah Brubeck can be reached at firstname.lastname@example.org or 603-727-3223.