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Upper Valley town officials worry about tax revenue, shortfalls after pandemic

Valley News Staff Writer
Published: 4/7/2020 9:17:04 PM
Modified: 4/7/2020 9:16:56 PM

LEBANON — Upper Valley municipalities are warning of potential budget shortfalls as the COVID-19 pandemic chips away at people’s spending power and discourages visitors.

Officials say various sources of income, including parking tickets in Hanover and landing fees at Lebanon Municipal Airport, have already dried up.

And there’s worry that property taxes — the biggest revenue generator for cities and towns — could be next.

“The real impact will be when we send out our next tax bills in May,” Hanover Town Manager Julia Griffin said last week. “And that’s not just Hanover, that’s every city and town in the state.”

“It’s going to be, I think for a lot of communities, sending out their tax bills in May and then taking a really deep breath,” she added.

Hartford Town Manager Brannon Godfrey shared a similar sentiment, saying his town relies on property tax payments to cover about 80% of its general fund.

“We’re going to be looking at fewer on-time payments of property taxes,” he predicted. “That’s really where we’ve got to dive in and prioritize our spending for next fiscal year.”

Hanover expects to raise $10.2 million for its general fund through property taxes next year, according to the town’s proposed budget. It’s not just residents paying into that amount.

Businesses and property owners, who have either shuttered or scaled back operations under New Hampshire’s stay-at-home order, are also expected to pay up to support town operations.

But Griffin has other worries. Parking, a $2.3 million endeavor last year, has “plummeted” at Hanover’s town-owned garage and parking spots, she said.

Revenues from tickets, meters and the garage are self-sustaining, meaning they pay for maintenance and employees.

“The good news is there’s no parking problem in downtown Hanover right now,” she said. “The bad news is there’s no money coming into the funds right now.”

In Lebanon, the city-owned airport saw a similar drop in revenue, according to City Manager Shaun Mulholland.

Private jets owned or chartered by Dartmouth College alumni and parents haven’t been landing in West Lebanon and aren’t expected back at normal levels until students are allowed back on campus, he said.

Lebanon was expecting to make $360,000 in landing fees this year.

Likewise, rental car fees, expected to draw $124,000, are similarly down. The city also is expecting its share of the state rooms and meals tax, estimated at more than $700,000, to drop.

“All those little amounts add up,” Mulholland said, adding that his staff will be closely watching revenue as the pandemic proceeds.

Enfield Town Manager Ryan Aylesworth said his community’s recreation budget also could be hit by the pandemic.

Programs are usually paid through participation fees, he said. But that money won’t come in if there are no summer camps, swim programs and other activities because of social distancing guidelines.

Aylesworth pointed out that the economic downturn may also stop people from buying cars, leading to a drop in motor vehicle registration fees.

Enfield brings in about $1 million annually through motor vehicle transactions, he said, so a 10% shortfall “wouldn’t be something that would go unnoticed.”

School districts haven’t yet seen revenue problems, but it could if trickle down towns fail to collect enough property tax dollars.

“If the towns have a hard time raising money to pay the bills, it could make us tight on how we spend our money,” said Jamie Teague, business administrator for the Dresden School District, who added that school districts rely on municipalities to collect their tax bills.

Similar concerns throughout New Hampshire resulted in Gov. Chris Sununu issuing two emergency orders to assist municipalities.

The first order allows towns and cities to overspend their budgets and tap into surplus funds for COVID-19-related operations, so long as they receive state permission.

Upper Valley officials said they’re so far unlikely to ask for such relief.

Their response to the pandemic will mostly be covered by the federal government, under a national emergency declaration.

Sununu last week also issued an order giving towns and cities the option to offer a blanket abatement of interest for late property tax payments.

“I encourage municipalities to utilize this authority where they are able to provide relief to their citizens,” he said in a statement.

However, municipal officials have identified several problems with the order.

Mulholland, who is also chairman of the New Hampshire Municipal Association, said its wording seems to allow for the abatement of interest payments prior to the pandemic.

He added that, since the order expires when the state of emergency does, it might be of no use to people expected to pay taxes as late as July.

People seeking an abatement generally need relief from their actual assessed taxes, not so much the lesser interest involved, Mulholland said, suggesting the state should be offering such tax relief.

“That would be really helpful to people,” he said.

Tim Camerato can be reached at tcamerato@vnews.com or 603-727-3223.




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