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Editorial: Burden Shifting in New Hampshire

It’s too late for most New Hampshire town meetings, but selectboards and town managers deserve a show of appreciation for how well they’ve played the nasty hand they’ve been dealt. The dealer is state government, and what’s been coming out after the legislative shuffle in recent years is ever-decreasing support for programs and expenses that ultimately become the responsibility of local government. Yes, local spending seems to climb ever upward, but those increases seem quite modest when considering how much of the financial burden has been passed from Concord to municipalities and the local property tax.

The phenomenon is hardly new in New Hampshire, we realize; in fact, it is sufficiently established that it has acquired its very own label: downshifting. But what has happened since the state budget came under siege by both the recession, which slowed the flow of revenue, and a two-year reign of radical Republicans, which cut off the supply of common sense and compassion, has transformed downshifting into a different sort of beast altogether.

As reported by Concord Monitor writer Ben Leubsdorf in a story published in the March 12 Valley News, state revenue that used to be distributed to towns and amounted to $106 per person in 2007 has been steadily reduced and, just four years later, stood at $88 per person, according to the New Hampshire Center for Public Policy Studies.

Remember revenue sharing? That was suspended in 2009.

The 40 percent cut of the rooms-and-meals tax the state used to distribute among the municipalities? Frozen in 2009, and remains so.

The state was initially a bit more generous with pension costs for teachers, firefighters and police, opting in 2009 to only reduce the portion of employer cost it covered (once 35 percent). But that was temporary; it eliminated the state portion two years later.

Meanwhile aid for extraordinary special-education costs has dwindled, state aid for school construction has been suspended, and state grants to help with major capital expenses have been scaled back.

State adequacy aid — the primary source of state support for education — was one of the few significant streams of revenue flowing out of Concord that wasn’t substantially reduced. One can only wonder what might have happened had the New Hampshire Supreme Court not ruled that such spending is the state’s constitutional obligation and therefore not optional.

There is little hope that the situation will improve significantly in the short term.

Gov. Maggie Hassan’s proposed budget certainly would restore some of the lost revenue, providing an increase in the amount of room-and-meals tax revenue shared with communities. It also calls for additional outlays for state grants for infrastructure projects and special education aid. The suspension in state building aid for school construction is scheduled to be fully lifted by the second year of the new biennium, although it appears that it will be a while before new projects will be allowed to get in line, regardless of how deserving they are.

But there are no plans to restore the revenue-sharing program or resume payments to help towns and cities shoulder sharply increasing rates set by the state retirement system. And who knows what will happen to the rest of the budget? Hassan’s spending assumes that the state will take in $80 million in casino licensing fees, a revenue projection that falls somewhere between optimistic and wishful. If Hassan’s proposal to build one casino in southern New Hampshire receives legislative approval, hardly a sure thing, the state would have to move precipitately to collect the licensing fee in time for the budget period.

The champions of small government who dominated the Legislature the last two years have, we assume, no objections to the current situation. By their way of thinking, spending decisions are best made at the local level, where they are more closely scrutinized and more closely reflect popular will.

There’s some truth to that, but it should not be forgotten that when the state downshifts responsibility, it heaps ever more responsibility on the local property tax, which doesn’t distinguish among people’s widely varying abilities to pay taxes and tolerates wide disparities in property wealth among communities. Consider the latest failure of the Mascoma Valley Regional School District to renovate its demonstrably inadequate school. Without state building aid available to ease the $21.8 million burden, the project failed by just a handful of votes to get the necessary 60 percent support — largely because it was overwhelmingly rejected in the five-town district’s less-prosperous communities.