Jim Kenyon: Tax time triggers a tempest in Lebanon

  • Jim Kenyon. Copyright (c) Valley News. May not be reprinted or used online without permission. Send requests to permission@vnews.com.

Valley News Columnist
Published: 12/12/2020 10:42:54 PM
Modified: 12/12/2020 10:42:51 PM

About 230 Lebanon residents have signed a petition calling for the city to “mandate vigorous fiscal restraint going forward in 2021.”

In other words, folks are steamed about their rising property tax bills — the second biannual installment for 2020 came due earlier this month — and want the city to start spending less on (fill in the blank). The petitioners argue that if Lebanon doesn’t change its spending habits, the city risks pricing older residents out of their homes and impeding working-class families from moving in.

The COVID-19 pandemic has made a bad situation worse, said Ramzi Hraibi, a 45-year-old financial services consultant who helped initiate the petition drive.

“People are losing jobs or taking pay cuts,” he said. “Our taxpayers are at a breaking point. The city has to cut back on expenses, just like (individuals and families) are having to cut back.”

Part of me wants to ask the tax rebels: What do you expect?

You live in one of only two states that has neither a personal income tax nor sales tax. (Alaska is the other, and it’s got oil.) Without a broad-based state tax to help pay for services and schools, how can cities and towns keep the lights on?

Property taxes are the cash cow.

But that doesn’t mean Lebanon taxpayers should suffer in silence. Hraibi’s group, which doesn’t have a name yet, raises legitimate concerns about the city’s declining affordability. The city’s tax rate went up 25% between 2012 and 2019, according to the group’s research.

Petitioners are demanding the city set a “target reduction of 20% in the tax rate to be phased into action over the next five years.” In 2021, a 4% reduction in the tax rate would require slashing $1.3 million from the proposed city budget.

A cut of that magnitude would mean “major layoffs” in the city’s workforce of about 185 employees, Mayor Tim McNamara told me Friday.

Tia Liu was among two dozen petition signers who participated in a Zoom meeting with McNamara and City Manager Shaun Mulholland last week.

Liu, a tax accountant, and her husband, Ming, have owned their home in West Lebanon for 14 years and raised three children in the city. Their daughter, Jade, would like to bring up her children in Lebanon as well. Jade and her partner, Keith, currently own a mobile home in Claremont; she’s a bartender, and he’s a delivery truck driver.

“The cost of houses and property taxes in Lebanon takes up a lot of a (working-class family’s) income,” Liu said. “They still have child care and other expenses. Even with two incomes, owning a home in Lebanon is a stretch.”

Mulholland has put together a proposed spending plan of $61.5 million for 2021. Slightly more than half — $34 million — supports the general fund, which is covered by property taxes. The remaining $28 million or so also comes from taxpayers through user fees, which aren’t cheap. A family of four’s water and sewer bill can run $1,000 annually.

Some homeowners I talked with saw their 2020 taxes go up $1,000 or more from 2019. This year, Hraibi paid $16,650 in property taxes on his three-bedroom colonial off Route 10, assessed by the city at $457,200, and an adjacent vacant lot — a one-year increase of $1,334.

“Taxes are always a sensitive issue,” said Hraibi, who bought his home near the Hanover town line in 2006. “We (in the group) don’t want to come across as nasty people, but this trend can’t continue.”

So where do the $1.3 million in cuts to the 2021 budget that they’re suggesting come from?

Al Patterson, a retired police officer who has been collecting petition signatures with Hraibi, told me that’s the city council’s job — in consultation with the city manager and department heads. (I’d start by getting rid of Lebanon’s school resource officer, i.e. school cop, a position that costs taxpayers $120,000 a year.)

Mulholland told me that he’s already had to make some tough choices. He’s recommending the elimination of three jobs, including an $80,000-a-year energy conservation position, reducing library hours and keeping the city’s swimming pool closed next summer.

Health insurance and retirement payments are “things we don’t have any control over,” Mulholland said. So are pay raises previously agreed upon with the unions that represent the city’s police officers, firefighters and other workers.

Debt service is another biggie. The city budget includes $10.2 million to pay for infrastructure projects that are underway or have already been completed.

I can’t help wondering if the petitioners’ frustrations over city spending are off-target. School funding in Lebanon, and nearly every community, is the big-ticket item in a homeowner’s property tax bill, often making up two-thirds of the total.

In Lebanon, the school board is proposing $45.9 million in general fund spending for 2021. If approved by voters, it would raise taxes by $215 on a $250,000 home. The proposed municipal budget would add $78 to the bill, bringing the total increase to $293.

Carla Nordstrom, a 66-year-old physician who has lived in Lebanon since 2001, paid more than $15,000 in property taxes this year on her home that’s assessed at $562,900. “I’m able to pay my tax bill, but I’m not very happy about it,” she told me.

Nordstrom worries about the impact of soaring property taxes on people less fortunate in Lebanon and elsewhere. When taxes go up, landlords often raise their tenants’ rents.

Nordstrom already has patients “not filling out the prescriptions I write for them or only using half the dose that’s prescribed to make the medicine last longer.”

The nine-member council, headed by McNamara, is scheduled to vote Wednesday on the budget. In the Zoom meeting, McNamara encouraged petitioners to get involved in the budget talks earlier on.

“You can’t just show up once a year when your tax bill comes due,” he said.

Good advice. 

Jim Kenyon can be reached at jkenyon@vnews.com.




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