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With cap up for vote, many have questions
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By SCOTT BROOKS
New Hampshire Union Leader Staff
Wednesday, Oct. 28, 2009
MANCHESTER – For most of the last year, the discussion over a proposed cap on taxes and spending in Manchester has tended to focus more on whether the proposal should go before voters than on whether it would be good for the city.
Ed Staub, a city resident and software developer, wanted to know more. What was the proposal, anyway? Was it a spending cap, or a tax cap?
He did a little asking around and found other people were just as confused.
"I would talk to people," he said. "They knew where they stood on it, but they didn't know what was in it."
►Click here to view the spending cap question as it will be presented on Tuesday's ballot.
►Cap: How it compares in Derry, Laconia, Nashua (3)
At this point, the city ballots have been printed. They'll go before voters Nov. 3, and the proposed charter amendment is on them.
Voters have a decision to make. Here are some answers to a few of the most commonly asked questions.
What does the proposal say?
The proposed charter amendment would place limits on tax hikes and city spending. Increases in either would be capped at the rate of inflation, as determined by the National Consumer Price Index-Urban.
To get around the cap, two-thirds of the aldermen would have to vote to override it. Aldermen also could vote to make exemptions for capital expenditures or city bonds.
How would the cap affect the tax rate?
The whole point of the cap, ostensibly, is to keep taxes low.
To be sure, as other communities with a cap have already found, taxes could still go up. It's all but inevitable that in some years they would.
More than likely, though, if taxes do rise, it probably wouldn't be by more than a few percentage points.
"This is that protection, that safety valve for citizens," said Mike Biundo, former chairman of the New Hampshire Advantage Coalition, which wrote the proposal.
In recent years, the rate of inflation has tended to hover between 2 and 4 percent. Under a cap, that's the most that taxes could have risen. There are, however, some concerns about what might happen to the city's tax rate in a year like this one, when the rate of inflation has been close to zero.
"That makes for a difficult budget," said Frank Childs, the chief financial officer in Derry, which has a tax cap.
How would it affect city services?
Economist Brian Gottlob, who authored a report on behalf of tax-cap opponents, has said that caps tend to divert money away from schools, roads and libraries, among other things that matter to residents.
The potential effect on Manchester's schools is an especially large concern among cap opponents. Alderman At-Large Mike Lopez speculates that if a cap had been in effect this year, the city's schools would have received an even smaller budget than they did.
"It would devastate them," Lopez said.
Childs, the Derry CFO, said his town's cap has forced officials to make difficult choices. He noted that this year, the town eliminated 5 percent of its workforce, mostly through attrition.
Nashua has had a spending cap since fiscal year 1994, and many officials there contend services have not suffered. One alderman at-large, David Deane, notes the city has managed to pay for a number of major projects over the past 15 years, including construction of two high schools and a fire house.
But Alderman At-Large Lori Wilshire, who describes herself as "the board liberal," maintains the cap has kept the city from doing more. "I don't think it's been ineffective," she said, "but I don't think the city is allowed to grow at a certain pace to keep up with the economy."
How about the city's bond ratings?
City Finance Officer Bill Sanders has warned the proposal could jeopardize Manchester's bond ratings, which are crucial if the city is going to pay for major projects: for instance, an expansion of police headquarters, or a new Highway Department building.
There are, however, officials in Nashua who say their spending cap has been good for the Gate City's bond ratings. Two of those officials, Aldermen At-Large Deane and Fred Teebom, say the cap has encouraged the city to put $28 million into reserve. Bond rating agencies like that, they said, and have awarded the city a solid AA-plus rating.
How would a reassessment of city property values affect the cap?
The proposal continues to limit taxes if property values go up.
Sanders, however, said it doesn't account for the very real possibility that property values could drop. If that happened -- and Sanders says that's "not an unreasonable outcome at some point in the future" -- the city would risk losing vast amounts of revenue.
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YOUR COMMENTS
It is not fair to use Franklin as a comparison as a community which has tax cap. The real reason for the major tax increase which led to the tax cap was two-fold: The city changed its budget calendar year and had to adopt an 18 months budget. It was also the same year that the first bond payment for the new middle school was due. Thus a major tax increase. This is what sold the tax cap. The community has suffered for it. One year they paved just one side of a major street in the city because they couldn't afford to pave both sides.
- Gordon, Laconia
Did you know what triggered Franklin to adopt a tax cap 20 years ago?
In 1989 they got hit with a 34% tax increase.
Yes, that says 34%.
- Ben, Manchester
For the record I am not bigotted, Manchester is my home, always was, always will be. I'm just trying to afford my taxes and keeping what I got. I've been here for a lot longer than most of the new residents that have no problem shelling out money to get everything that they were accustomed to getting before they came here. They don't seem to realize that this city is powered and financed by blue collar workers who even though their taxes went up on the average of 4-7% in previous years, we are lucky to see 3%.
- Jack Alex, Manchester
if only the unions that are flooding the airways and my mailbox hadn't ripped off taxpayers, we wouldn't need a tax cap.
- Melissa, Manchester
So much for balanced reporting. Brooks dedicates 4 paragraphs to 3 proponents full of their weakest quotes. Opponents get 12 paragraphs full of zingers.
Ben in Manchester, Its not just that. Last weekend I got a telephone push poll call from one of these cash flush PAC's. Meanwhile the republicans can't even scrape up a candidate for alderman at-large.
- Jim, Manchester
No KC, I did not miss the point. I am also a descendent of one of Manchesters city founders. I did sign my name, it's Ron. I live in Manchester and I'm concerned about the direction this city has taken since Bob Baines was Mayor and turned us into a refugee drop zone.
I asked you a question and I'll repeat it now.
KC, I wonder what is your stake in the city of Manchester. Do you believe that our taxes will somehow affect you in Newport.
- Ron, Manchester
Dale,
Not sure where Bill Saunders works or lives, but Bill Sanders works for the city finance office and lives in Epping.
Keep Manchester moving get's it's money from the same place the tax cap initiative people gets theirs, out of state sources. Keep the out of staters out of our politics and let us decide. Whether your for or against we should all agree that WE need to decide. Let the people vote and deal with the consequences later.
- John, Manchester
The fact still remains that Manchester enjoys the lowest tax burden of any city in the state. So, where's all this unbridled spending and fiscal irresponsibility?
If Manchester has budgeted wisely without a cap and is better off than those with a cap, why handcuff the aldermen who have been doing their job?
Many here do not appreciate what their $75 - $100 a week buys them in city services. List out the services we enjoy weekly and seasonally and then think about the value we truly receive. Those who think the opposite have their head in the sand when it comes to the cost of things.
Couple this with the poor choice of a NATIONAL price index without complete budget data, the tax cap is a good intentioned, but bad idea.
- Dean, Manchester
Who are the "many" with questions? There are but 2 or 3 mentioned in this article!
The only question I really have about the spending cap is who is behind the opposition? Where did Keep Manchester Moving get the 1000's and 1000's of dollars to do not one, but two mailings and pay for all the radio ads? They are not registered with the Secretary of State or the City Clerk's office?
- Ben, Manchester
Ron, buddy, you missed the point. Jack Alex's statement that he is a decendent of a city founder and his referring to all others as migrants intimates that he is, because of ancestory, somehow afforded the right to his bigotted beliefs. Did you sign your name Ron?, I didn't notice.
- KC, Manchester
I know who Bill Saunders works for, but where does he reside?
- Dale A., Manchester
I'm voting for the cap. Just like I vote each and every day for my own cap. I can't spend what I do not have, I must budget. About time the city does the same.. Voting Yes on the cap and Loving it .. Cap, Cap, Cap,, Yes Yes Yes...
- tommy, manchester,nh
All concerned parties should take note that the main opposition group behind this, "Keep Manchester Moving", is made up of city labor union representatives and is headed up by Josiette White, who is an operative from MoveOn.org. The group's spokesperson, Zandra Rice Hawkins, is a paid operative from Granite State Progress, which is the largest and most heavily funded astro-turf organization in the State.
"Keep Manchester Moving" is OPERATING ILLEGALLY. They are raising and spending money on political action yet have not filed the necessary paperwork with the Secretary Of State's office. They are breaking the law because if they filed the paperwork that they are required to, everyone would know that their money comes from "Democracy Now", a liberal astro-turf group in Colorado, labor unions, and other out-of-state socialist organizations.
They want this Spending Cap to fail, because it's just one battle in their war against traditional New Hampshire values of small government, low spending and low taxes.
Josiette White and Zandra Rice Hawkins were sent to New Hampshire for a reason: to change the political landscape by any means necessary. Including breaking the law.
- Andy Demers, Manchester, NH
Do you people live in some sort of dreamland? Your taxes aren’t so out of this world, look around. What you should be asking is “what is my money getting me?” How can we stretch the dollar? The Gatsas/Lopez budget was quick to slash the school funding but what about the 10 staff members at City hall doing the same job? Why aren’t they demanding to cut that budget too? Why aren’t we forcing people to recycle like Concord does? There’s money to be had in the trash bags at the curb!
The school, police and fire should be first priorities in this city. For some reason the school district has always been this city’s “red headed step child”, stop abusing it and actually fund it. You can’t level fund when costs are going up and up. Are the BMA paying the same amount for electric in their homes that they did 3 years ago? NO they aren’t, none of us are but we should expect the schools to?
Times are tough right now and people all over are hurting. Maybe what we should do is treat city hall like the kitchen table, have each department head present their budget to the entire city not just the BMA and we take a month with each department going over their spending and brainstorming what we can do better. The solution is time consuming, but I think this city is worth it. We need to stop running around yelling “the sky is falling”, take a moment to think through problems and not just toss a band-aid at it.
- Maria, Manchester, NH
KC, I wonder what is your stake in the city of Manchester. Do you believe that our taxes will somehow affect you in Newport.
I wonder why you wont sign your name to your letter. Could it be that you are a Democrat party official here in NH? I don't agree with Mr. Alex on everything, but he speaks the truth about the fiscal problems in Manchester.
Rick Olsen also makes excellent points in his post. The out of state money that is involved in the anti cap flyers I've been throwing away is all you need to know about who is behind the shenanigans of the past year.
I wish that the city charter would be amended to eliminate the two useless alderman at large positions. They don't represent the good hardworking, taxpaying people of Manchetser.
- Ron, Manchester
labor costs represent 80% of government operations...a tax & spending cap is a threat to those that benefit from government wage & benefit increases that are not in step with what the average taxpaying house hold can keep up with...In Rochester, all we ever said was that the tax cap will put reasonable limitations on the growth of local government spending...it's not a cure all and it's not going to hurt NEEDED services as long as elected officials work with the cap and not against it...spending at 2, 3 or 4 times the rate of inflation is not sustainable for taxpayers...as we are seeing on the national level, progressives believe we are not taxed enough...progressives believe that Americans are not smart enough to take care of themselves...progressives believe and have created a kind of American that believes the government owes them all something...this is a fundamental fight between our rights as individuals...so, we either believe that we cannot live without big government telling us how to live or we believe in our right to decide what's best for ourselves...the battle lines are drawn and it will effect everyone whether you get in the fight or not...I sat get into the fight and choose freedom and liberty!!!
- Fred Leonard, Rochester, NH
Hard work, a fierce fight, and a 14 month delay. And we're still here. Now pass it.
- Steve, Manch
In 2005 a majority of Laconia voters adopted a charter amendment to place a cap on spending while allowing for new construction values for the coming year. While perhaps a better job could have been done to stay below the Consumer Price Index on spending, the property taxpayers of Laconia have been able to get a handle on the amount of their next tax bill. In good financial times spending does increase. On the flip side, in poor to terrible financial times, depending on your own personal opinion, the tax cap does provide a ceiling for city/school spending. Don’t you wish every level of government understood this concept! If you see the same financial future as I do and believe the tax cap is the only line of defense we have.
These tough financial times may extend into 4-5 years. Other candidates use the line that they cannot see any increase in the spending for the next year. We are all in this together. Politicians who spend “our money” do not know or understand what our personal budgets are - we do. And why shouldn’t we have a little bit left to spend on our priorities!
bnyoung@metrocast.net
- Niel Young, Laconia
I signed the petition to get the tax cap on the ballot. I wasn't really sure if it was a good idea however I felt that a message needed to be sent to the BMA. I think the cap simply allows people to shirk their responsibility at the ballot box to hold the elected representatives responsible. With that said, I was going to vote "no".
That was before all of the shenanigans began. When the Board of Alderman decided to try to keep it from even coming in front of the people, that shined a bright light into who they are as people. They are not there to represent us, the people paying the bill, they are there to represent the city unions. We were supposed to have some informational meetings to educate us on what a cap would mean. Instead, all we got were lawsuits designed to keep us from having a say. We are now getting mailers and phone calls from astroturf organizations telling us of the dire consequences of a tax cap.
Seeing who is in charge of the opposition, I now see the tax cap as a good idea and am happy I signed the original petition. I will definitely vote "yes".
- Wayne S, Manchester
Jack Alex, Manchester's ever-shining beacon of truth, light and tolerance, speaks from on high. PLEASE!!!
- KC, Newport
I don't see the values going down on peoples homes at all, the next valuation is just a statistical re-val, in 5 years the values of homes are going to again be out of sight.
The city doesn't need a new police department building and we don't need a new highway department building neither.
We shouldn't be bonding that much to begin with, it just adds to debt and we can't afford the interest anyways.
I support the tax cap especially after the last two flyers I got from the proponents one with a orange truck covered in snow and the latest with a building on fire. There is a safety valve that I dont think any resident would deny the city if there was an emergency that the aldermen could then override the tax cap.
This is going to protect me if some liberal money spender gets in and we go back to the ole' days of 6-7+% increases.
Vote YES on the tax cap if you want to keep your homes.
This message was from and approved by a member of the Ole' Gaurd and a decendent of one of the founders of Manchester. All other migrants that just came here are more than welcome to move out and take your kids with you.
- Jack Alex, Manchester
The City of Keene has the second highest tax rate in the State and has never had a cap. When one lives in a ultra Liberal community, the results are tragic for the taxpayer. The City Council's claim to fame is that they never fire an employee.
- Fred Walker, Keene, NH
From all that has been put forth regarding a tax cap, two schools of thought emerge: First there is the "fiscally concerned" city official who asserts that a tax cap is necessary to keep taxes low. Then there are the "liberals" who, "want to do more" and to hell with the tax payer.
Sanders is full of crap. The fact remains that many of our property values have already dropped but the taxes have not. It is of no consequence whether we are talking about the Real velaue or the assessed value. IN either case a loss is a loss.
Lets put all the cards on the table. The bare fact is that Lopez and his ilk simply do not want any degree of restraint when it comes to this city, its budget or the taxpayer. Lopez has a track record of that with his "alternate budget" and his phone calling to whip up the school loudmouths.
As I have said before, you could double the schools budget today and the loudmouths would be back, louder than ever wanting more.
We need the cap. we need reststraint. City Hall will not discipline themselves.
- Rick Olson, Manchester
And when property values go down, are property owners reimbursed for being overtaxed?
Didn't think so.
- Michael, Manchester
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