Taxes, Gambling and Fees…

With the budget season underway we are now starting to get a clear picture of how our local, school and state government is proposing to spend our money – and most importantly how they plan on taking it! 

Gov. Hassan released her proposed 2014-2015 budget last week.  The proposed $11.1 billion budget is a 10.2% increase from the last biannual authorization of $10.0 billion (see pg.20).  The quick table below shows the proposed budget breakdown:

	FY 12-13	FY 14-15	% Increase
GENERAL GOVERNMENT	$908,867,111	$963,915,687	6.1%
ADMIN OF JUSTICE AND PUBLIC PRTN	$1,065,049,497	$1,185,685,714	11.3%
RESOURCE PROTECT & DEVELOPMT	$484,832,135	$562,561,150	16.0%
TRANSPORTATION	$1,081,741,430	$1,110,427,915	2.7%
HEALTH AND SOCIAL SERVICES	$3,796,419,789	$4,380,521,164	15.4%
EDUCATION	$2,724,172,136	$2,879,904,808	5.7%
Grand Total	$10,061,082,098	$11,083,016,438	10.2%

As you can see the largest spending increases are for the court system (11%), health/social services (15%), and environmental protection (16%).    The Health and Social Services now consume 39% of the state budget – and has been expanded to cover the Obamacare mandates.  Surprisingly, transportation is the big loser here with only a minimal 2.7% increase.  Considering the state of our roads and bridges, it is surprising that transportation is close to the bottom as far as funding goes. 

Of course a 10% increase in taxes and fees will have to be taken from the following sources:

• $3.5 billion from Federal Funds (32% of budget)
  • This amount will probably create a small decrease based on the upcoming sequester.  The budget makes no contingency for this upcoming shortfall and will create a situation where the state will either have to cut the budget or raise more taxes and fees.
• $4.6 billion from unrestricted taxes and fees for use in General & Education Fund (42% of budget)
  • Assumes 21% increase in real estate transfer tax fees.
  • $40 million from increase of the tobacco tax
  • $80 million from casino licensing fees (not yet passed by legislature)
• The remaining $3 billion will be raised from fund-specific taxes and fees which can only be used for program specific funds (26% of budget)
  • Highway Fund - HB 617 would raise the gasoline tax by 67% from 18 to 30 cents per gallon.  Diesel tax would go up 6 cents.  Vehicle registration would increase by $15.
  • Turnpike Fund - A proposed raise in turnpike tolls.
  • Liquor Fund – A proposed beer tax increase has been voted down.

So you can well expect taxes and fees to increase in order to fund the 10% expansion of state government. 

As the chart below clearly shows nearly 25% goes to education, 25% to government/police, 39% to health services and a measly 10% to transportation.  Transportation is the one category that actually creates jobs, builds infrastructure that everyone uses, and supports industry and the economy yet it is almost an afterthought. 

source:  NH State website

Petition Article for New School Tax Formula

The Monadnock School District deliberative session was held on Saturday Feb. 9, 2013.  The meeting was delayed until 3:00 PM due to the two feet of snow that the blizzard of 2003 dumped on us.  About 130 people actually made it out to vote.  The Keene Sentinel reported that the participants at the meeting were primarily from the Towns of Fitzwilliam, Swanzey and Roxbury.

The proposed budget for the 2013-2014 school year will be $32,409,110.  Of this amount $18,898,834 will be raised through local property taxes with the remainder coming from grants, fees, state-aid and other sources (including almost $1 million from federal grants).

Perhaps the most contentious article to be on the ballot this March will be how the school tax is distributed between towns.  According to the Sentinel article, this petition article has been brought by the taxpayers of Roxbury, who feel they are unfairly taxed.  Currently, the amount to be raised in taxes ($18.9 million) would be divided among the six towns that comprise the Monadnock School District – remember that Sullivan is leaving.  The current formula is based on a town’s school enrollment (50%) and each town’s total property valuations (50%).  The petition article would change the formula to 75% enrollment and 25% property valuations.  The formula is better explained through the chart below.   

The chart shows average daily school enrollment (ADM) based on town of residence for 2012 (Sullivan has been edited out).  For example, the Town of Richmond sends an average of 93.3 children to various elementary schools and 47.12 children to high school.  In total Richmond is responsible for 7% of all school children in the Monadnock School system.  Roxbury is the smallest town and accounts for only 1% of enrollment in the schools.

	PreSch	Kind	Elem	Middle	Total-Elem	High School	Total	% of total
Fitzwilliam	4.01	18.86	135.43	50.21	208.51	95.45	303.96	17%
Gilsum	0.08	9	50.86	15	74.94	28.46	103.4	6%
Richmond	4.29	9.66	57	22.35	93.3	47.12	140.42	8%
Roxbury	0.27	2	11	1	14.27	10	24.27	1%
Swanzey	11.68	63.52	424.86	141.96	642.02	291.39	933.41	52%
Troy	2.62	25	144.39	47.69	219.7	86.7	306.4	17%
Total	23.2	137.02	854.52	291.21	1305.95	585.98	1811.86

The other part of the school tax formula relies on town valuations.  This figure is the total amount of all taxable property within a town.  The following chart shows the 2012 valuations for all the towns in the school district.  As you see below the total value of property within Richmond amounts to $93.12 million.  Swanzey on the other hand is the second largest community in Cheshire County, has lots of residences and commercial properties, and has a valuation of nearly $585.9 million.  The total of all the evaluations in the school district is $1.1 billion dollars!  Richmond’s proportion of the Monadnock District-wide valuation is 8%.  Roxbury on the other hand is only 2%.

Town	2012 Valuation	% of total
Fitzwilliam	$        250,687,722	22%
Gilsum	$          65,386,727	6%
Richmond	$          93,126,613	8%
Roxbury	$          25,978,456	2%
Swanzey	$        585,861,401	51%
Troy	$        128,629,595	11%
Total	$    1,149,670,514

Now, you may notice a similarity between the % of school enrollment and tax valuations:  i.e. Swanzey accounts for 52% of the school kids, and has 51% of the valuations.  Richmond similarly has 8% of the school population and 8% of the valuations.  The reasons why these numbers are so close is that they are related.  The more residences in a town, the more children and the bigger the tax base.  The only time these numbers don’t match is when a community is rich or poor because a wealthier community has a higher valuation.

The final chart shows a comparison of how next year’s budget would affect each municipality based on the 50/50 and 75/50 formulas:

	50/50		75/25
	Tax Rate	$/student	Tax Rate	$/student	Tax difference on a $150k house
Fitzwilliam	14.54	$      11,993.58	13.59	$  11,211.90	$     (142.17)
Gilsum	16.47	$      10,412.49	16.48	$  10,421.36	$            2.10
Richmond	16.08	$      10,665.91	15.90	$  10,548.07	$       (26.65)
Roxbury	13.09	$      14,012.60	11.42	$  12,221.41	$     (251.01)
Swanzey	16.53	$      10,373.78	16.57	$  10,402.00	$            6.74
Troy	20.64	$         8,665.49	22.74	$    9,547.86	$       315.27

 *NOTE: These tax rates are for analysis only.  Actual rates will be determined by DRA.

From the above chart it is clear that the change from a 50/50 formula to a 75/25 formula would not affect most towns.  Gilsum and Swanzey would see a typical tax hike of less than $10/year.  Richmond would see a typical tax savings of $26 a year.  The big winners would be Roxbury and Fitzwilliam which would see a typical tax savings of $251 and $142/year.  The big loser would be Troy with a massive hike of almost $315/year.  (NOTE:  these numbers will vary based on final tax rates compared to current tax rates)

The average cost per student under the current formula is $11,020 (town portion only, it is about $18,000 once all funding sources are considered).  It is clear that Roxbury pays about $3,000 more per student and Troy pays $2,300 less than the average.  Other towns are close to the average.

Under the 75/25 proposal Roxbury would still be paying about $1,200/student more than the average and Troy $1,200/student under the average.  However, Roxbury is such a small town that if a family with 3 children moved in it would mean a 10% increase in enrollment.

Liberals Attack School Choice Act

A rabbi, two reverends and the ACLU walk into the court house.  Sadly this is not a joke, they are in fact the actual plaintiffs in a lawsuit claiming that tax money will be used to fund "religious indoctrination and proselytization."  The complaint argues that since 2/3 of private school students currently attend religious schools, the School Choice Scholarship Act forces tax payers to fund religious organization.  The fact that this suit is brought by a rabbi and two reverends is bizarre in itself; the fact that the US Supreme Court has already ruled that this type of program is constitutional in Arizona Christian School Tuition Organization v. Winn points to the futility of the argument. (see also Justice Douglas' opinion)

The truth is that the School Choice Scholarship Act (SCSA) does not force anyone to pay a tax to contribute to religious or secular education.  The SCSA is completely voluntary.  Businesses can make charitable donations to whomever they wish and they get an 85% tax credit on their donations.  This is the same scheme as deducting charitable contributions from you personal income taxes - just because you gave it to a church doesn't mean you cannot deduct it.  The donations would go to scholarship foundations which would award scholarships based on need to low-income children.  The scholarships can be used to attend a different public school, a private school, or for home-schooling costs.  Nothing in the law mentions religious schools.

The second front on which the School Choice Scholarship Act is being attacked is by the more liberal legislators in NH.  Sen. Molly Kelly and several representatives have introduced HB 370 to repeal the School Choice Scholarship Act.  In order to repeal the SCSA, the bill would have to pass in both the legislature and the senate.  Right now the Democrats hold a 42 seat advantage in the 400-seat house of representatives while Republicans hold a 2 seat advantage in the 24-seat senate.  It is likely to be a close vote, but unless two Republicans defect in the senate the School Choice Scholarship Act will survive.

So what are the motives in this decisively pitched battle?  IMHO, it would appear that having the choice to send your children to a private school or a public school outside your district is a very positive for the children.  This is specially true if you live in the Monadnock Regional School district.  The education is dismal.  According to the 2012 NECAP Scores just released for Monadnock High School:

Proficiency scores are the % of students who have only minor gaps in the knowledge and skills of the subject.

Reading Proficiency: 80%

Writing Proficiency: 49%

Math Proficiency:    28%  (47% of students rated as having 'extensive and significant gaps' in this subject)

Science Proficiency: 28% (from the Spring 2012 NECAP)

 I know a lot of better-off people who live in Swanzey send their children to St. Joseph's school in Keene.  They are not Catholics, and a lot of the students there aren't either.  They just want a better education for their children.  Why should low-income children not have the same opportunities?  Furthermore, low-income families could use the money to pay tuition at Keene public school and send them there instead.  Alternatively, people could use the scholarships to offset home-schooling costs.

It would appear that the opposition is mainly concerned with 'religious schools' and hell-bent on preventing children from attending 'religious schools'.  This is the only argument they are putting forth.  I'm sure teacher's unions are also fighting to keep a strangle-hold on their monopoly of tax payer benefits, even though they stink at their jobs.

In conclusion, this appears yet another attempt by the liberals in government to tell parents and children that they know what is best for them - even if its attending sub-par schools.  Apparently these liberals would rather have your child be completely incapable of doing math and science rather than be potentially subjected to the mention of the word 'God.'  What a joke indeed!

Update on Wednesday, February 20, 2013 at 06:22PM by NHBosonetto

CONCORD - The House voted 188-151 to repeal a new program that provides a school scholarship program through tax credits. (Union Leader Article)

No surprise there given the large democrat majority.  It is surprising that only 339 out of 400 legislators bothered to vote (85%).

Update on Thursday, February 21, 2013 at 07:50PM by NHBosonetto

Bruce Tatro voted YEA

Jane Johnson voted NAY

Alfred Lerandeau was excused and did not vote

MTBE Contamination at 4-Corners

The Keene Sentinel has run a front-page story regarding the state of NH lawsuit against Citgo and Exxon-Mobil.  The story prominently featured Richmond's very own 4-Corners area as one of the sites of contamination.

The contamination occurred over a decade ago when the old tanks at 4-corners leaked gasoline into the groundwater.  Gasoline at that time contained an additive called MTBE - which was supposed to help reduce vehicle emissions.  Of course the law of unforeseen circumstances meant that this additive which was supposed to save the environment ended up being a carcinogen that easily contaminates groundwater.

But the contamination of the groundwater at 4-corners is old news.  Most everyone around here knows about it.  I've even heard rumors back in the day that the Richmond Fire Department is not allowed to fill up their tanker trucks because if they used the contaminated water to put out fires they would be spreading the contamination.  The Sentinel article incorrectly stated there were no longer gas tanks at 4-corners.  The truth is that new tanks were installed, but then last year the pumps were taken out.  The new tanks are not leaking - that problem has been solved, but the pollution remains in the water until it is cleaned up.

Back in 2001 then NH Senator Robert C. Smith testified about the 4-corners situation:

In August, I visited the Four Corners Store and several surrounding 
homes in the town of Richmond. It is called the Four Corners Store 
because it is at a rural crossroad, like so many in America, and takes 
up one of the four corners. Common sense is very pervasive in New 
Hampshire.
  Mr. and Mrs. Stickles are the store's proprietors. When they 
purchased that country store a few years ago, they believed the MTBE 
contamination problem had been solved. They do have new underground 
storage tanks and are completely in compliance with the law.
  Unfortunately, the MTBE plume from years ago still persists. A number 
of the nearby homes are having their wells polluted. It has 
contaminated a number of homes near the Four Corners Store.
  I met with the owners of the store and visited those homes. The 
Goulas and the Frampton families were kind enough to invite me into 
their homes. They showed me the treatment systems that had been 
installed by the State. They shared their concerns about their health 
and their children's health. At one of the homes lives a young couple 
with small children.
  First and foremost, they are worried about the long-term health 
impacts on their children. They told me about the daily inconveniences 
of having to deal with this contamination in their wells. They were 
told the water was safe for showers; however, showers should only be 
with cold water, limited to 10 minutes, and well ventilated. That is 
what they were told. So take a cold shower and make sure it is well 
ventilated.

Last year the NHDES estimated that the total remedial action at this site would cost $1.25M total.  The funds will come from various government programs and from the lawsuit against the oil companies.  Of course that doesn't change the fact that the water is still contaminated.