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We have to pay What???

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I find it interesting the way this budget deficit was not the Governor’s or Legislature’s fault when the election season was in full swing. We were told “it’s the economy, stupid!” and people believed it. Never mind the fact that Governor Do-Nuthin’ Lynch proposed a 14.5% spending increase, saying that this is the most we can afford. Ignore the fact that the Democratic Majority Legislature passed a 17.5% spending increase, well beyond what we were told we could afford. Don’t mention the fact that our Governor signed this budget into law without a word about the extra 3% in spending. It’s not their fault.

Who read the report from Charlie Arlinghaus before the budget was passed that told of the impending economic downturn. Clearly not our state leaders, since they were “caught off-guard” by the current economic situation. I think I heard them say “if we only knew then…” which means this catastrophe could have been averted.


My last post covered the about half of my response to Skip Murphy’s rebuttal of a previous post. Click this link to read his rebuttal. The Debate will NOW Resume.

About halfway through his post Skip quotes me and provides his rebuttal:

“It was mentioned that the Commissioners and Convention should have taken the shortfall in revenues into account when preparing the budget.”

That would be me....and Doug!  Over and Over, Commissioner Daigneault repeated "revenues are not keeping up with expenditures", "revenues are not keeping up with expenditures"

As I tried to point out during the meeting - if you know that revenues are not up to expectations, then why the heck are you still spending more than you take in and forcing taxpayers to pay for your mistake?  It is automatic that when one gets elected that the basic laws of supply and demand are suspended?

I did report in my post what you and Doug were saying, but I heard other people mentioning this same thing. I didn’t give credit to anyone in particular because there were so many people emphasizing this point.

I did hear Commissioner Daigneault say a few times that “the problem is that revenues aren’t keeping up with expenses” but I am not sure how many people picked up on the real intent of this statement. My translation is “we got the shaft from the state budget and HB2. We want to make sure people know it. This will outrage people enough to vote those fools out in November.”

As I stated in the first part of my response, the Commissioners and Convention didn’t see any problem with emphasizing their point, regardless of cost. They didn’t realize just how far they had gone until they were notified that this budget could cost jobs in Laconia. This is just more proof that the Spending-Tax-Cap in Laconia provides some benefit to people beyond our city limits. It doesn’t have the same effect to the County residents as it does on Laconia’s residents, but all of the town budgets in this county will benefit from the $351,000 increase in revenues.

I really feel that the revenue projections are still seriously understated, even when the revised numbers are taken into account. I believe that, because of the understated revenues we will see a great reduction in the amount to be raised by property taxes at the county level by December. I wonder if the Convention is thinking that the large sum of money they are asking from the municipalities isn’t so bad if they will get a reduction by the time the bill actually comes in.

Skip continues in his post with the following quote from me and his questions:

“With increases in prices for goods and services (fuel, repairs, etc…) and contractual agreement increases for wages it would be extremely dangerous for the county to run a flat line budget equal to 2007.”

Absolutely not.  We ALL face the same thing - why does government get first pick?  Why do they  receive top priority? What too many people forget is the reason for government - it is to do things that are not possible for us as individuals but also to exist for our benefit.

Again my statement is true in that the increase in the budget problem was purposefully done on the revenue side and it would be dangerous to make serious cuts on the expenditure side to compensate. This does not mean that the expenditure side shouldn’t be reviewed and trimmed. It only means that the impact on the county would be greater by eliminating needed services.

I don’t feel that I am giving the county “top priority” and I am not forgetting the reason for government, I am only stating what should be obvious to everyone that understands how this mess was made. Skip states at the start of his post about the budget increase that came from the Convention over the budget that was proposed by the Commissioners. I see this as more evidence supporting my belief in the true problem with this budget.

Skip continues this train of thought as follows:

The sensible thing would be to ask yourself "what is the proper role of government at the County Level"? and prioritize those things that are the main responsibilities.  In this case - Sheriff, Deeds, Corrections.  A lesser degree would be the Nursing Home.  Anything after that should be examined closely for elimination.

Note: there are always things to spend more on - those are wants.  It is the easy road to "go along and get along" especially with other peoples' money.  It takes a courageous person in politics to be able to say "no" and protect the ordinary taxpayer.

I agree with this statement and it is something that should be debated prior to the November elections so we know what our elected representatives feel is “the proper role of government at the County Level” and how they will prioritize those things.

Again I point to Arizona in regards to the Sheriff and Corrections. In Arizona the County Sheriff is also responsible for corrections and the County Jail. When Sheriff Joe Arpaio was elected in Maricopa County he was facing a budget shortage of over $1 Million and was under a court order to find revenue or release prisoners. He did neither one of these things. Through some “out-of-the-box” thinking he was able to keep the prisoners incarcerated and reduce expenses. He instituted the “Tent City” for housing prisoners, the change in meals (bologna sandwiches and fruit) and the “Chain-Gang” to curb costs and expand the jail facilities. That is why he is called the Toughest Sheriff in America and the prisoners complain on national TV that they are “treated like prisoners”.

I am not saying that his methods would work here but they could be looked at and with some other “out-of-the-box” thinking we should be able to reduce costs for the Corrections Department.

The Nursing Home is a responsibility that comes from the federal level. I have previously stated that I believe the feds should be following through on their promise and commitment more but, unfortunately we have no control over this. It is set by the State and Federal government, who pass the costs down to the local taxpayer.

It does take courage to say “no” and protect the ordinary taxpayer and we need to ask ourselves before we go to the polls in November “what type of courage have we seen?”

Skip quotes me as saying “That being said it is important to take the revenue side into account when determining expenses when preparing a budget. There is nothing to suggest that this wasn’t done with this budget,”

I return to my argument that this budget crisis was intentionally created and that the expenditure increase is “fairly reasonable”. More examination should have been done but there is no “large increase” in the overall expenditure side to suggest that this wasn’t looked at, even if it was minimally done.

You quote me talking about the issues concerning HB2 that were discussed at the meeting. You state in your post:

“you spent a lot of time on this - and I believe it to be a "red herring".  This is nothing more than account transfer gooble-dee-gook from the individual taxpayer level.  No matter what, the taxpayer still has to ante up lots more, one way or another.  

I stated my thoughts on this before and that hasn’t changed. The only thing I will remind you is that this cost-sharing program was set up in Washington D.C. and we have to live with the state’s take on it (HB2) until we get representatives with enough courage to lookout for the ordinary taxpayer. The “account transfer” you refer to is just that, but remember that the transferred funds are paid through a variety of taxes and not just property taxes at the local level. At least until the state gets a hold of it.

I don’t believe the “red-herring” is in HB2. This bill has some to do with the reason this scare tactic was tried. The rest of the reason for our County Representatives to try this tactic on us is because they are upset over the rest of the state budget and school funding.

Unfortunately I feel that they are trying this as a partisan method to get the Dems out of control at the state level. If we had true conservatives in office we wouldn’t have to resort to these measures.

True conservatives know how to lead, make positive changes and more importantly protect the taxpayers. An example of true conservatism would be taking the announcement Gov Lynch made about incentives for jobs in the North Country and turning that around to other areas of the state to increase jobs for the taxpayers and the revenues received from businesses across the state.

New Hampshire has a unique tax structure and there are some out there who can’t think of how to work within that structure to affect positive change and would rather apply more taxes to the ordinary taxpayer. This is definitely a hot button for me because it doesn’t take much to make the changes needed, increase revenues and reduce the property tax rate we have to pay.

I suppose this can be left to another debate, hopefully before November. The main thing to remember when we go to the polls in November is “what courage have we seen”, “what new ideas are being put forward”, “are these ideas outside the box” and “are we going to be protected”. Hopefully we can find candidates with positive answers to these questions.

My dear friend Skip Murphy has posted a rebuttal to my post “The Meeting was a Partial Success” can be seen on Granitegrok under the heading “Blogging Councilor - the rebuttal” and this is my response to this entry.

Skip states:

My summary: Greg misses the point - it's not the legislation, it's the COST! 

His claim: A Partial Success

My opinion: Not so much.  No, the taxpayers lost.

He has clearly missed my point. There was a partial success in the meeting. I consider a partial success to be the reduction in revenue to be raised by property taxes from 13.047% to 10.417%. This was created by a direct effect of the $351,000 increase in the revenue projections. I wouldn’t call a decrease in the amount to be raised by property taxes a loss to the taxpayers. I wouldn’t call it a victory either. I would call it a partial success.

I would call a 2.349% reduction in property tax revenue a “PARTIAL SUCCESS”. To me the word “partial” means that we gained something but not what we wanted.

You may notice that my percentage and Skip’s percentage don’t match. Skip you show a 14.14% increase in the amount to be raised by property tax to be raised. You have an extra $15 in your figure for the 2008 amount to be raised by taxes in the original budget.

Skip goes on to say:

SO, here's the upshot - the County was demanding 14.14% more in taxes in one year. Effectively, this is a inflation rate multiple of 4!  Why does government always rise much faster than inflation rate (and generally, far faster than most peoples' income)? Where is the fairness to the general taxpayer in that?

It is true that government, whether federal, state or local increases at a greater rate than what is normally seen. In Laconia we have enacted a Spending-Tax-Cap that ties the growth in government spending to, in simple terms the rate of inflation.

Skip, you are part of the Gilford Budget Committee that has the ability to influence the level of town spending. The residents of Gilford have the final say on approving spending, which may not be as effective as our tax cap but does help keep growth under control.

Unfortunately in the world we live in there is very little control over the tax increases we, the taxpayers feel. With a representative form of government the local officials feel the heat and hear the complaints more frequently and often than our state and federal representatives do.

As many of you may know I am originally from Arizona. There are some things I miss in Arizona and many I don’t. One of the things Arizonans have the power to do is offer a petition articles on the local, county or state ballot. These petitions have the same effect as a law passed by the legislative body. If we had the same option in New Hampshire we could find a way to force a Spending-Tax-Cap on our county and state officials.

Skip continues:

Great - the State is giving money that they don't have to a County that shouldn't be spending it in the first place.  Remember, the State is already in the throes of a deficit to the tune of $50 million with expectations of it going to $150 - 200 by the end of next year because they've raised their revenue projections way too high to support their additional $475 million spending over the State's last budget.

I agree that the state is having financial troubles of great magnitude, and we know what caused this problem. But does a state budget crisis allow the state to stop paying their responsibilities? If we, the taxpayers followed this reasoning we would all end up homeless and broke. We have to live within our means and it has been said over and over again that the state and county should live within their means.

If the revenue projections for the county are accurate then there should have been more of a reduction in expenses, but I will go into that later.

The post continues on as follows:

Besides, where did that Medicare money come from.  No, you are wrong if you say the Feds.  The startk truth is that it is ALWAYS the taxpayer that has to foot the bill.  We have to pay it - this is not new money - it is simply an "account transfer" from one level to another. This is a thinly covered "fix" in the works. 

It is true that the Medicare/Medicaid money is an “account transfer” from one level to another. The sad truth about this is the federal government set the system up this way many many years ago. Unfortunately this is a federal benefit provided to retired and lower income people and until we have the power to force the feds to pay their promises on their own it is not going to change.

The state has made a change in the local responsibilities for the “non-federal” share of expenses. Because the state wanted to increase other programs, open to debate about their necessity, and the need to have a “neutral budget” at the state level the state simply cut their share of these payments. This not only is a passing of state costs directly to the property taxes but because of the way the feds have set up the sharing program it leaves a large sum of money on the table in Washington D.C..

You wrote:

The taxpayers also paid for the Surplus Fund, so to claim that as "new found revenue" is still a crock. 

First of all I never claimed this to be “new found revenue”. I know the original intent of the Surplus Fund was to cover operating expenses from the start of the county budget to the time the county receives its revenue from the towns and Laconia. Throughout the years the county has had to use this surplus to reduce the effect of the budget on the tax payers. This same technique has been used by towns for the same reasons.

According to Bud Daigneault the surplus is running out. I am not certain how much is left in the Surplus Fund but I would argue that this type of use should not be a regular occurrence. After all the County Convention that decides the County Budget is a part of the same group that decides the State Budget. Why aren’t they looking out for the tax payer more vigorously?

Skip asks:

My take: Greg, how can you call this a Partial Success?  For WHO? 

I explained earlier what I consider the definition of “Partial Success” and this is for the tax payers in Belknap County. It isn’t everything we wanted but it is a step in the right direction.

I believe the revenue projections were short to emphasize a point. The point deserved to be emphasized, but not at the expense of the people that vote. I also believe that, even with the increase in revenue projections, the County Commissioners and County Convention are still purposely short on the projections to try and keep emphasis on the point they are trying to make.

I also believe that this strategy is going to backfire on them at the polls come November.

Skip quoted my posting, adding emphasis and added his comments as follows:

“There were a lot of questions about the expenditure side of the budget. It is valid to ask these types of questions but looking at an expenditure increase of 3.9% seems fairly reasonable. When you take into account the relatively small level of increase in the expenditures I believe that you are never going to see a significant impact on what is to be raised by taxes.”

You don't believe that a 10.425% increase in taxes is NOT a significant impact on the property tax rate of the County?  This is the first big mistake in the reasoning. 

True, overall expenditures increases were up 3.9%. The problem is the COST of that increase!  With the "new found revenue", it still is an increase of 10.425% to tax payers - still an inflation rate multiple of between 3 or 4 times!  This is the problem of just examining the budget of expenditure year over year.  Or the revenue year over year.  In governmental spending, one ALWAYS has to look at the COST to the taxpayer, year over year.

Skip, you are mixing up the revenue impact with the expenditure impact in the way you asked questions about my statement. My point is that, just looking at the revenue side of the equation 3.9% is fairly reasonable. Notice that I didn’t say it was completely reasonable because the rate of inflation is at 2.9% and the expenses of this budget is 1% above that. With that being said a 3.9% increase in spending for an entity that is not controlled with either a Spending-Tax-Cap or direct voting by the people being affected is fairly good. I would prefer the spending be at or below the inflation rate but considering the amount of power we have over this budget I have no choice but to live with it, at least until November.

I still stand by my statement you cite. Without drastic cuts in the budget you will never see a significant impact on what is to be raised by taxes when the problem has been stacked on the revenue side of the equation. I agree that the expenditure side of the budget should be looked at closely, not only by the public but by the Convention itself. When I looked at this budget I saw the problem was stacked on the revenue side and figured out my assumptions as to why it is that way. Unfortunately, it appears, many of the citizens in attendance were so consumed with the expenses that they either couldn’t or refused to analyze the revenue side.

I do strongly believe that if these revised revenue projections are accurate then the budget expenses should be cut drastically. My belief is that the county is doing the reverse of what the state did when adopting its budget. The state made the projections look much rosier than they should have been because they wanted to spend more and when they couldn’t inflate the revenues enough they made cuts in expenses so they wouldn’t have to live up to their responsibilities. The county made the projections look gloomier so the emphasis would be on the additional spending at the state level. The problem is that the elected officials who represent us at the county don’t care about the expenses they hit us with in making their point. I believe that the change in revenues is because they finally realized that their move would actually cost jobs in Laconia. I think a partial success can also be applied to the fact that we saved people from losing their job. I think they might describe it as a partial success too.

You are still crediting me with saying “new found revenue” in your statements and I think I have already covered my thoughts about the revenues. You finish this statement by discussing an analysis of the budget over a period of time, or “year over year”. I must remind you that my statements were not an analysis over time but a snapshot of the current budget with a minor comparison to last year’s budget.

I would enjoy a debate over an analysis over time but I would have to get the figures and examine them. I have the feeling that we would not find much, if any, disagreement in this debate. We will probably save this for another time. We will also have to save the remainder of my response for another time (maybe tomorrow) because this post goes on for some length and it is getting late.

Skip, you don’t have to wait for my next post if you wish to respond to this one. Please read this carefully so you can follow my reasoning.

The Debate Begins

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My good friend Skip Murphy, who blogs on Granitegrok has challenged me to an online blogging debate concerning the recent activity on the Belknap County Budget.

Skip states the following in his post titled “No, not even a partial success - for the taxpayers, anyways”

That all said, you know what's coming - Yup, there's a BUT coming up! Methinks Greg and I are going to be having "a discussion" as there needs to be a pointing out a thing or two to Greg.  So, let the blogging debate begin...

Before I respond to his call for a debate you should see the following information I have put together about the budget in question. (you can read my notes about the budget below and open this link to review the spreadsheet)

You should know all of the items on the spreadsheet in red have an affect in the increase of the budget and the amount to be raised by property taxes throughout the county.

 Budget Notes

1        General Fund County Revenues

a)      Citizen’s Council received a $100,000 grant in 2007. When this is taken into consideration it is actually a $19,862 increase in revenues. This is equal to a 297.691% increase.

b)      Human Services revenue item

i          This item shows the increased revenue projections made at the Public Hearing. 

ii        This item received a $190,000 grant in 2007.

iii      When the grant is taken into consideration it is actually a $230,105 increase in revenues after the revised revenue projections added $151,000 to the estimate.

iv      This is actually a 121.178% increase.

c)      Gunstock Income

i          The minimum payment from Gunstock, per a past agreement is $150,000 to help pay the debt service for the last bond issued.

ii        My understanding is that Gunstock is to be “self-sufficient” in its budget and pay more toward the debt service when it is available.

iii      It wasn’t until pressure was put applied that the Commissioners agreed to increase this revenue.

2        General Fund County Expenditures

a)      Commissioners expenditure item

i          This item had a $40,000 expense in 2007 for a Wage Study.

ii        When this study is taken out of the equation there was an expenditure of $271,978 in 2007.

iii      Comparing this revised expenditure to the 2008 number shows a ($4,428) decrease.

iv      This revised decrease is actually a 1.628% decrease.

b)      County Attorney expenditure item

i          This item has a $15,000 expense in 2008 for Civil Experts.

ii        This extra expense is supposed to be a one-time-only expense.

iii      Taking this extra expense into account shows a normal increase of $818.

iv      This normal increase is actually 0.150% increase.

c)      Gunstock Expenses

i          My understanding is that Gunstock is to be “self-sufficient” in its budget and pay more toward the debt service when it is available.

ii        This item only shows Gunstock to be “self-sufficient” this year because of pressure to increase the revenue projections.

3        Human Services Budget Expenditure Details and Comments

a)      The Comments show which items are to change in payment responsibility between the State and County. This is the part related to HB2.

b)      The revenue projections for this item are far understated, which is related to the increase in expenses.

c)      This item is only a “best-guess” estimate by everyone at the county level.

d)      Increases in Wages and Benefits are on the extreme side and should be reviewed for cuts.

4        Department of Corrections Budget Expenditure Details and Comments

a)      The increase in Wages at 3.750% is close to being in-line with an acceptable increase but there may be some additional reductions available. This should be looked at.

b)      The increase in Benefits at 4.048% is a bit high and should be reviewed for reductions.

c)      The Corrections Food increase of 17.653% is quite excessive and I would like to know where this increase is coming from. If the increase is from food then the County Corrections should follow the lead of Sheriff Joe Arpaio, the Maricopa County Arizona Sheriff. He cut the inmates in the County Jail to bologna sandwiches and fruit for meals.

5        Outside Agencies Budget Expenditure Details and Comments

a)      The UNH Cooperative Extension increase of 2.378% is normally not a bad increase but should have been looked at closer for reductions.

b)      Lakes Region Mutual Fire Aid is paid for by Belknap County for all the towns and the city in the county. This is an expense reduced from each town and city.

c)      The Genesis Counseling Group increase of $6,700 should definitely be reduced.

6        Nursing Home Budget Details & Comments; Nursing Home Revenues

a)      Medicaid Incentive revenue item

i          The Convention will not directly identify the decrease in revenues. It is my belief that this item is the reduction of Federal payments due to the perceived monies reduced by the State under HB2

b)      Nursing Home Care revenue item

i          This is related to HB2 and I believe the projections are still extremely low. Unfortunately the true revenues will not be known until December 2008.

c)      Hairdressing Income revenue item

i          Where does this item come from and why the decrease?

d)      Transfer from General Fund revenue item

i          This equals the expense item in the General Fund Expenditure Budget.

ii        This item should be self-sufficient with “pass-downs from the feds and state but money is being left on the table in Washington D.C., which is something that HB2 was supposed to correct.

iii      If the revenue projections are more realistic then this number should be smaller.

7        Nursing Home Budget Details and Comments; Nursing Home Expenditures

a)      Dietary Department expenditure item

i          The increase of 4.298% is 1 2/3 times the CPI – U inflation rate of 2.9%. This doesn’t make sense in Dietary. It could be from increased fuel costs for cooking and refrigerating the food plus the increase costs for the food.

b)      Nursing expenditure item

i          A 6.940% increase is extreme. This item should be for wages of the Nursing Staff.

ii        There was an increase in the size of the staff during last year, but that shouldn’t account for an increase of $383,990.

c)      Housekeeping expenditure item

i          Where does a $23,644 increase come from?

ii        This item should be revued for accuracy.

d)      Physicians & Pharmacy expenditure item

i          The increase is quite small.

ii        My thought is that the people in the Nursing Home should either qualify for Social Security Medicare and the Prescription Drug Plan available or they should already qualify for Medicaid. There should either be corresponding revenue for this item or there shouldn’t be an increase.

e)      Special Services expenditure item

i          What is this item? Could this be for the performers that come to entertain the patients?

ii        Why are we paying more for an item we don’t know what it’s for?

f)       Activities expenditure item

i          This increase is quite small and I understand that this item is for the group outings for the patients that are able to leave the facility for short times during the day.

g)      Hairdressing expenditure item

i          The increase is larger than what would be considered acceptable, but I understand that the young at heart women feel better when they have their hair done. I will give this one a pass.

 

My next post will contain more specific information to help Skip understand where the budget went wrong. Let the debate continue.

The other night at the public hearing on the Belknap County budget Commissioner Daigneault let everyone in attendance know that they had increased their revenue projections. This has a direct affect on the amount to be raised by property taxes through each town and Laconia. The revenue increased is $100,000 from the Surplus Fund; 5% ($100,000) from Gunstock, who had a banner year; and $151,000 in Medicaid payments from the state.

There were a lot of questions about the expenditure side of the budget. It is valid to ask these types of questions but looking at an expenditure increase of 3.9% seems fairly reasonable. When you take into account the relatively small level of increase in the expenditures I believe that you are never going to see a significant impact on what is to be raised by taxes.

It was mentioned that the Commissioners and Convention should have taken the shortfall in revenues into account when preparing the budget. With increases in prices for goods and services (fuel, repairs, etc…) and contractual agreement increases for wages it would be extremely dangerous for the county to run a flat line budget equal to 2007. That being said it is important to take the revenue side into account when determining expenses when preparing a budget. There is nothing to suggest that this wasn’t done with this budget, but I think it deserves a closer look and questions asked.

Much of the problem in revenues was placed on HB2, which shifted costs between the state and counties for Medicaid/Medicare reimbursements, which was sponsored by Sen. Sgambati. A lot of questions were answered about the caps in place under the new legislation that takes effect on July 1, 2008, which is the start of the 2009–10 state budget year. This was very confusing to me because of the “hold-harmless” portion of the bill.

This bill covered a number of sections in the RSA and below is an excerpt of the bill signed by the Governor. Pay attention to 167:18 a IV, which is the highlighted paragraph.

263:17 County Reimbursements; Limitation on Payments. RSA 167:18-a is repealed and reenacted to read as follows:

167:18-a County Reimbursement of Funds; Limitations on Payments.

I. These expenditures shall in the first instance be made by the state, but each county shall make monthly payments to the state for the amounts due under this section within 45 days from notice thereof.

(a) Counties shall reimburse the state for expenditures for recipients for whom such county is liable who are eligible for nursing home care and are receiving services from a licensed nursing home, or in another New Hampshire setting as an alternative to a licensed nursing home placement and are supported under the Medicaid home and community-based care waiver for the elderly and chronically ill, as such waiver may be amended from time to time, to the extent of 100 percent of the non-federal share of such expenditures. Expenditures shall not include payments made for skilled care.

(b) Counties shall not be liable for Medicaid recipients in state institutions, the Crotched Mountain Rehabilitation Center, and intermediate care facilities for the mentally retarded (ICF-MR) approved by the department of health and human services and servicing developmentally impaired persons.

II.(a) The total billings to all counties made pursuant to this section shall not exceed the amounts set forth below for state fiscal years 2009-2010:

(1) State fiscal year 2009, $103,000,000.

(2) State fiscal year 2010, $105,000,000.

(b) The caps on total billings for fiscal years after fiscal year 2010 shall be established by the legislature on a biennial basis.

III.(a) The counties shall have an aggregate credit of $5,000,000 against amounts due under this section for each fiscal year beginning July 1, 2008. The credit shall be allocated as follows:

(1) For fiscal year 2009, $4,000,000 shall be allocated among the counties based upon the proportion each paid for such expenditures in the prior fiscal year, and $1,000,000 shall be allocated among the counties based upon their relative proportions of residents age 65 or older who are Medicaid recipients.

(2) For fiscal year 2010, $2,000,000 shall be allocated among the counties based upon the proportion each paid for such expenditures in the prior fiscal year, and $3,000,000 shall be allocated among the counties based upon their relative proportions of residents age 65 or older who are Medicaid recipients.

(3) For fiscal year 2011 and for each fiscal year thereafter, $5,000,000 shall be allocated among the counties based upon their relative proportions of residents age 65 or older who are Medicaid recipients.

(b) The credit shall be made available as soon as possible after the start of the fiscal year. The department shall adopt county credit criteria in consultation with the county-state finance commission and in accordance with the provisions of RSA 541-A. The credit under this paragraph shall not reduce total reimbursements due under paragraph II.

IV. Notwithstanding the procedures of paragraphs I-III of this section, no county shall be liable for total billings in fiscal year 2009 or fiscal year 2010 in an amount which would be greater than the amount of liability projected for that fiscal year using the methodology for determining county payments in former RSA 167:18-b prior to its repeal.

V.(a) Any shortfall between the state audited Medicaid allowances incurred by the state’s county operated nursing homes and amounts otherwise reimbursed by federal 50 percent Medicaid matching funds or other income, shall be certified as a public expenditure and be eligible for additional federal funding match.

(b) The department of health and human services shall seek federal Medicaid assistance match for any state audited county nursing home Medicaid expense which is not fully reimbursed through rates. Any revenue realized through such a match shall be paid to the nursing homes which incurred the unreimbursed expense.

Paragraph II shows the caps everyone was talking about and I questioned paragraph IV, which to me says that the counties will not pay more than they should have under the old bill. It was explained to me that the state, in order to have a neutral budget realized that the additional expenses to the state under paragraph IV was going to exceed the caps they had to budget for in paragraph II. When they realized this they simply reduced the reimbursement rate paid so that the $103 Million (to be shared by all counties) was not exceeded.

Is this another example of the NH Legislature and Governor passing the buck at the expense of the property taxpayer?

There is a lawsuit by the counties to change or repeal this law and we won’t know for some time what the outcome of that is. In the mean time we need to be cognizant of who we elect to represent us in the State Senate, State House, Executive Council and Governor’s Office.

As has been reported in both the Laconia Daily Sun and the Citizen of Laconia the proposed budget for Belknap County is much larger than was expected. In fact the budget proposed by the County Commissioners is actually more conservative than the budget proposed by the County Convention. The Commissioners budget is almost $700,000 less than the budget being considered by the Convention.

The Laconia Daily Sun reported the following in their Thursday, February 21, 2008 edition

LACONIA — Property taxpayers in the 11 municipalities of Belknap County will shoulder a greater share of the 2008 county budget than anticipated. In Laconia, that will mean city and school cuts of nearly a quarter million dollars to meet the tax cap.

The budget presented by the County Convention this week includes a 13-percent increase in the revenues to be raised by property taxes, 5-percent more than the budget prepared by the County Commission in December. The Convention’s budget requires $14,940,632 in property taxes, $668,723 more than the commission’s budget request and $1,727,448 more than the $13,213,199 raised by property taxes in 2007.

The municipal shares of the county tax commitment are apportioned according to their portion of the total assessed property value of the county, which change marginally from one year to the next. Based on the apportionment of 2007, the increase in the county tax commitment will be $347,253 in Laconia, $303,125 in Meredith, $268,120 in Gilford, $248,966 in Alton, $117,069 in Belmont, $92,665 in Tilton, $87,799 in Barnstead, $83,711 in Gilmanton, $68,304 in Sanbornton, $66,780 in Center Harbor and $43,656 in New Hampton.

County Administrator Nancy Cook traced the increase to two factors. First, under the 2007- 2009 state budget the state took responsibility for all juvenile services administered by the counties but assigned responsibility for long-term care, particularly intermediate nursing care and home and community based care, to the counties. In Belknap County, the net effect of the swap this year will add $568,000 to the county budget. Second, this year, as in the past, the state has reduced the the reimbursement rate it pays for Medicaid services, which will cost the county approximately $300,000.

City Manager Eileen Cabanel said yesterday that in preparing the 2008-2009 budget she estimated that the county tax commitment would increase $120,000. Since the county tax commitment counts against the tax cap, it must be offset by corresponding reductions in the municipal and school district budgets. Cabanel said that with the jump in the county budget, an additional estimated $227,253 would have to be trimmed in equal shares from the city and school budgets.

The property taxpayers’ share of the $26.6-million county budget will rise from 51-percent in 2007 to 56-percent in 2008, or approximately $246 per capita compared to $181 per capita between 2002 and 2004.

The County Convention invites written comments on the budget through the close of business on February 29 and will hold a public hearing on the budget at the county complex on North Main Street on Tuesday, March 4, beginning at 7 p.m.

As you can see from this report the property tax impact will be felt throughout the county. It is important for residents from all over the county to attend the public meeting on March 4th so the County Convention will know what we think of this increase.

For Laconia the impact is more devastating to the city budget because this increase will result in a decrease in our ability to provide services. The financial impact to Laconia is the equivalent of 7 or 8 city employees being laid-off. Mayor Matt Lahey and City Manager Eileen Cabanel have met with County Officials and they aren’t being specific about the reasons for the increase but they insinuate that it is due to the recent legislation regarding the state payments for the Nursing Home and the caps put in place by Health and Human Services. I don’t completely buy this excuse because there is a “Hold-Harmless” clause in the legislation signed by Gov Lynch.

Monday, March 3rd the Mayor and City Manager will be meeting with Sen. Sgambati to get some clarification on this excuse. Sen. Sgambati will be putting them in touch with a person at HHS that can provide specific information. Mayor Lahey has promised me that we will have good clear answers to our questions after this meeting.

Below is a copy of the letter to the editor that I have submitted to both the Citizen and the Sun.

“To the Editor:

I am writing this letter to ask for active participation at the March 4, 2008 Public Hearing concerning the Belknap County Budget. I am sure that most of the people living in our county have heard the controversy and amount of the proposed budget.

This budget, if passed will not only raise the property taxes of people in this county but will be devastating to the people of Laconia. We have a Tax-Cap in Laconia that controls increases in property taxes, which has a direct affect on spending. Laconia’s share of the increase proposed by the county is in excess of what was projected and will result in drastic cuts for the city budget.

I feel that it is of the utmost importance that we find out the reasons for such a large increase and let our elected representatives at the Belknap County Convention know our thoughts. The Public Hearing is the best venue for this. The meeting will be at 7 PM at the County Complex (by the Nursing Home) in Laconia. Please contact me at 455-0114 or greg@knytych.net if you have any questions

Greg Knytych

Ward 1 Councilor

Laconia

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