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Author Topic: LT - State Budget Cuts Highway Aid  (Read 1051 times)
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« on: July 15, 2011, 07:31:12 AM »

From the Londonderry Times

State Budget Cuts Highway Aid
Kathleen D. Bailey
Londonderry Times

While the streets of Londonderry will see the first impact from the state budget that went into effect July 1, Town Manager David Caron said all the numbers aren't in for the rest of the impact.

The $10.2 billion budget, approved by both houses but left unsigned by Gov. John Lynch, cuts spending by 8 percent for 2012 and 2013. It includes a $20 million cut from the Department of Health and Human Services and a $36 million cut from highway aid.

Until this year, Caron said, the town received a portion of the $30 surcharge for registering a motor vehicle. It was returned to the town in the form of a highway block grant. This year, the amount of state highway aid has been reduced by $90,000.

The loss will be dealt with this fall when the town and the state Department of Revenue Administration establish the 2011 tax rate, Caron said.

"One of our estimated revenues will be less than anticipated," he said. He estimated that the loss of highway funds would result in a 3 cents per $1,000 increase to the tax rate, or $9 on a house assessed at $300,000.

The impact of downshifting public employee retirement is less clear at this point, Caron said.

When the state first encouraged local municipalities to give up their retirement plans and become part of the state system, it agreed to pay 35 percent of police, firefighter and teacher pensions. "A couple of years ago, the state found itself in challenging financial times, and it reduced its share to 30 percent, then, in 2010, 25 percent," Caron said.

The budget that went into effect two Fridays ago has no state contribution, and the entire cost of public employee retirement has shifted to the towns. That would have resulted in a $468,000 impact to Londonderry's budget.

But, Caron said, the retirement program has also been revamped and the employee contribution raised by 2 percent. "Raising the employee contribution covered some of the costs, and they redesigned a lot of the benefits of the plan," he said. "I have been told there will not be a fiscal impact to the communities."

In 2010 Londonderry paid $1,710,370 in retirement costs. At that time, the contribution rate was 5 percent for town employees and teachers, and 9.3 percent for police and fire.  The town's share of police and fire retirement in fiscal year 2011 was $1.2 million, Caron said.

Cuts in health and human services may affect Londonderry as well, Caron said. If a resident can't find assistance on the state level, the town is bound by law to help him or her. "But I can't put a number on that yet," he said, noting that the number depends on the number of people asking for assistance.

In 2010 the town also received $1,097,692 from the state for the Rooms and Meals Tax and $48,059 in the Water Pollution Grant. Caron said neither revenue stream would be impacted by the adopted budget.

Caron said when he has firmer numbers, he will go to the Town Council and see if it wants to take any further action to reduce expenses.

Library Director Barbara Ostertag-Holtkamp had already made cuts to her budget due to the Town Council's request for level-funding. The heaviest impact of the state budget, for her, will be the reduction in van service from the New Hampshire State Library.

"'We used to get two vans a week, Tuesdays and Thursdays," Ostertag-Holtkamp said. Now the Leach Library will receive one van visit a week on Tuesdays. The van brings books requested by Inter-Library Loan, she said, and patrons will have to wait longer for their loan requests. She's also been told she will be allowed a maximum of two bins of books a week.

"We will have to evaluate this and see if we can maintain our book clubs with the reduced service," Ostertag-Holtkamp said, adding, "We are hoping we can."

Glenn Douglas
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