Nashua Mayor Jim Donchess

Nashua Mayor Jim Donchess is proposing a fiscal year 2022 budget of about $346 million.

Nashua Mayor Jim Donchess said state officials are using cities and towns throughout New Hampshire as their “cash register” and it’s leading to higher taxes for city residents.

“The state is slamming Nashua with $11.8 million of increased costs and lower state aid. This translates to a 5.5% tax increase imposed by the state of New Hampshire,” Donchess told aldermen while introducing his proposed $346 million spending plan for fiscal year 2022.

If his recommended budget is adopted without any changes, the mayor predicts that city homeowners will experience a tax increase of up to 4%.

“If it were not for the actions that the state of New Hampshire has taken … the city tax rate, based on this (proposed) budget, would be flat or actually decline this coming fall,” he said.

Donchess is proposing a general fund budget of $290 million, paid for by taxpayer dollars. The total proposed budget, however, which includes special revenue and enterprise funds, is closer to $346 million. The current budget is about $333 million.

“We are still facing a number of major financial challenges,” Donchess told city officials.

Pension costs have increased by $4.4 million and school aid has declined by $7.4 million, according to the mayor. This, coupled with rising health care costs and COVID-related expenses, has created concerns — even though many city departments will be level-funded in the coming year, he said.

Donchess requested that nearly every city division prepare a budget with zero increases, but the police department presented a budget 2.6% more than its current spending plan, and the fire department presented a budget up 4%. The mayor is proposing a cost-of-living increase of 1.7% for the fire and police departments, substantially lower than their requests.

“This is my effort to compromise and try to reach a reasonable budget and also a minimum, or lowest tax increase we can deliver,” he said.

Given the possible learning loss as a result of online learning throughout the past year, Donchess asked school officials to prepare a budget with a maximum 1.5% increase. The Board of Education ultimately proposed a budget of $116.6 million, which is a 1.7% increase; Donchess has since removed $119,000 from the school district’s proposal.

There is a possibility that Nashua could receive $4.4 million as part of the federal American Rescue Plan, or stimulus package, which could offset some of the lost school aid, the mayor said.

“I want to make sure we can do everything we can to keep children reading and computing at grade level,” he said.

A series of meetings will be held as aldermen examine the mayor’s proposal; the first is scheduled for May 20.

“I am sure there will be a lot of discussion,” Alderman Richard Dowd said of the spending plan, which has been assigned to the aldermanic budget review committee.


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