Along with HB 111, discussed last week, CACR 9 is one of this year’s most troubling pieces of legislation. This constitutional amendment would starve municipalities of revenue by prohibiting them from raising property tax revenues by more than two percent in any year. The limit would be “based on the actual tax of the previous year and not the rate.” In other words, a town could not increase the total amount of revenue raised from taxes by more than two percent per year. 

Thus, imagine a town with a total property valuation of $600 million and a municipal tax rate (not county or school) of $5 per thousand, yielding total tax revenue of $3 million. Now imagine a large industrial facility moves into town; the facility is valued at $60 million, increasing the town’s total valuation overnight to $660 million. Using the current tax rate, the additional industrial value would increase tax revenues by $300,000. Alternatively, if the spending level does not change, the following year’s tax rate would decrease 30 cents to $4.70. 

Of course, economic development usually comes with some costs; so assume further that the new facility brings with it $100,000 in additional costs for road maintenance, police and fire protection, etc. The increased valuation would easily allow the town to cover those costs and reduce taxes for everyone. CACR 9, however, would limit the town to raising an additional $60,000 (two percent of $3 million), leaving it to cover the remaining $40,000 by cutting services elsewhere. 

This defies reason. What town will be interested in economic development if it leads to a decrease in its ability to pay for needed services? And what business (or person) would want to move to a town that must continually cut services to stay within a state-imposed revenue cap? CACR 9 does allow the cap to be overridden “by a vote conducted by ballot”—although it does not say when or how that ballot vote would be conducted—but why should that be necessary? Voters know how to limit tax increases, and they do it all the time. 

State law already gives the voters in every municipality the authority to adopt a tax cap. (See RSA 32:5-b (town tax cap); RSA 49-C:33, I(d) (city tax cap).) They may adopt a limit that fits their individual needs, rather than suffer under a ham-handed state mandate. About half the cities and town-council towns have adopted caps of varying amounts; voters in the others have chosen not to. In the 219 towns that adopt budgets at a town meeting, the voters make informed decisions on how much revenue to raise and spend. They do not need the state telling them how much of their own money they may choose to spend. 

There are further problems with the bill, most notably a requirement that tax increases be limited to one percent for “citizens 67 years of age or older.” That is entirely unworkable—it is unclear how a town would set a separate tax rate for persons over 67 (as opposed to granting exemptions to people who apply, as they currently do)—or how it would even know who is over 67. 

Nevertheless, the Municipal and County Government Committee voted the bill Ought to Pass, 10 to 9. Please urge your representatives to vote NO on the committee recommendation and vote YES on a subsequent motion of Inexpedient to Legislate.

Of the four House bills originally relating to municipal budget formats and reporting requirements, only one remains in play. The House Municipal and County Government Committee voted to recommend HB 243, as amended, Ought to Pass earlier this month. (The other three bills were voted Inexpedient to Legislate.) 

We have serious concerns with HB 243, and we urge you to contact your representatives and ask them to kill this bill.  The bill would require municipalities to take numerous undefined actions with respect to their budgets. For example, it requires that all budgets be prepared in “full line item detail,” but the phrase “full line item detail” is not defined. 

The bill also requires the governing body to “publish” the “draft budget and revised versions, after making any updates to the budget,” within 5 days. It is unclear what “publish” means, although we assume this means publishing on a website, since the bill also requires that the budget be made available in both “CSV and PDF formats.”  Of course, some municipalities and village districts do not have websites, and a significant number of towns and cities use municipal software programs that do not have the capability to export the budget to CSV or PDF formats.  Thus, the bill would appear to require municipalities to acquire software compatible with its terms.  Additionally, the bill requires the governing body to publish revised budget versions within 5 days after making any updates to the budget.  In some of the larger towns and cities, this will require publishing new versions of the budget several times a week. 

Although the committee compared the bill to HB 1460, which was tabled in the last legislative session, the bills are very different. HB 1460 was enabling legislation, stating that the budget committee (not the legislature) “may” require a governing body to provide its budget recommendations in full line item detail in active spreadsheet format. That is very unlike HB 243’s mandate that all local governments provide budgets in CSV and PDF formats and within 5 days of revision. 

Notably, the state budget is not required to be provided in this same manner.  

The Municipal and County Government Committee reported the bill Ought to Pass in yet another 10-9 vote. Please urge your representatives to vote NO on the committee recommendation and vote YES on a subsequent motion of Inexpedient to Legislate.

Most readers probably have heard about HB 544, the bill that purports to prohibit the “propagation of divisive concepts.” Specifically, the bill would prohibit the state, including its political subdivisions, from instructing employees, contractors, students, or others to believe certain concepts, including, among others, (1) that one race or sex is inherently superior to another; (2) that the State of New Hampshire or the United States is fundamentally racist or sexist; or (3) that an individual, by virtue of his or her race or sex, is inherently racist, sexist, or oppressive. The bill lists seven more prohibited concepts, including “any other form of race or sex stereotyping or . . . race or sex scapegoating.” 

Although we do not believe the state needs to be telling local governments what concepts they may convey to their employees or other individuals, that is not (from our perspective) the worst part of the bill. It goes on to say that “all state contracts”—which appears to include every contract entered into by a municipality, since the bill defines “state” to include political subdivisions—must include a lengthy statement (283 words) prohibiting the contractor from instructing its employees in any of the same concepts. That is, the municipality must tell private companies what ideas they may and may not convey to their employees. 

Any effort by a municipality to enforce a restriction on private speech would be a clear violation of the First Amendment. That is bad enough, but this is being advanced at the same time that legislators are seeking to make it much easier to sue municipalities for constitutional violations. (See HB 111.) 

Obviously, if any municipality actually tried to insert a “prohibition on divisive concepts” clause in an equipment lease or a plowing contract, the contractor would simply remove it and wonder whether it is worth doing business with that municipality. Nor would we advise any municipality to take any action that is so clearly unconstitutional. 

Despite the bill’s obvious problems, the House Executive Departments and Administration Committee voted it Ought to Pass, 10-9. Even more astonishing, Division I of the House Finance Committee voted this week to include the text of HB 544 as an amendment to HB 2, sending a signal of strong support. We do not know yet whether the full Finance Committee will include it in the bill. But with respect to HB 544 itself, please ask your representatives to vote NO on the committee recommendation, then vote YES on a subsequent motion of Inexpedient to Legislate.

HB 232 is a bill that appears to have good intentions, but, unfortunately, creates a hole in the nonpublic session section of the Right-to-Know Law. 

The bill changes what is commonly referred to as the “real estate transaction” provision of the nonpublic session statute, RSA 91-A:3, II(d). That provision allows a board to enter nonpublic session for the purpose of “[c]onsideration of the acquisition, sale, or lease of real or personal property which, if discussed in public, would likely benefit a party or parties whose interests are adverse to those of the general community.” The reason for this is obvious: If a town is willing to pay $1 million for a property and the owner knows it, the town will lose any chance of negotiating a lower price. Similarly, if the town is trying to sell a piece of property and will take a bid as low as $1, then everyone bidding on the property will try to offer as close to $1 as possible. The purpose of this section is to enable to a public body to participate fairly in the free market, while also allowing the public to examine the body’s decision-making process after the fact. 

HB 232 would upend that delicate balance by allowing only “[c]onsideration of the amount paid, offered or accepted” to be done in nonpublic session; it would not include discussion of the amount the board is willing to pay to buy a property or the amount it wants to sell a property for, in the absence of an actual offer. It would force the board to disclose what it might consider as a minimum or maximum price, thus allowing savvy buyers and sellers to take advantage of the town. The bill also adds a line that eliminates merely discussing whether to proceed with a transaction; this also may result in a situation that would give an advantage to an adverse party. Combined, those defeat the purpose of the exemption. 

The House Judiciary Committee recommended HB 232 as Ought to Pass by an 11-10 vote. Please ask your representatives to vote NO on the committee report and vote YES on a subsequent motion of Inexpedient to Legislate.

Yesterday, Division II of the House Finance Committee voted Ought to Pass, 7-0, on a budget amendment that appropriates an additional $4 million in Apportionment A (highway block grant aid) distributions for the biennium ending June 30, 2023.  By law, Apportionment A is set at 12 percent of the state’s total highway revenue.  Due to the COVID pandemic, year-to-date highway revenue is currently 8.3 percent below the revenue for fiscal year 2020. Based on projected revenue estimates for the next two years, this additional $4 million appropriation would ensure that the fiscal year 2022-2023 biennium distributions would nearly equal the fiscal year 2021-2022 biennium distributions.  The full Finance Committee is scheduled to meet Monday, March 29, 2021, to begin its work in receiving and acting on all Division I, II, and III budget amendments.  

In a welcome bit of good news, the Senate this week unanimously passed an amended version of SB 95, which authorizes public bodies to continue holding remote meetings in essentially the same manner that has been permitted under the governor’s Emergency Order #12 during the current state of emergency. Recognizing that this is still a relatively new practice and there certainly are benefits to in-person meetings, the Senate included a sunset date of July 1, 2022, and the creation of a committee to study how well the process is working in the meantime. Depending on the committee’s findings, the legislature could either make the legislation permanent, make changes, or repeal it. 

The bill now goes to the House, where its fate is far from certain. The House Judiciary Committee has reported one bill on remote meetings, HB 216, as Inexpedient to Legislate. With a separate bill, HB 630, the same committee voted 20-1 to remove the provisions for remote meetings, leaving only an unrelated change to the Administrative Procedure Act in the bill.  While we would be happy to see the House overturn the committee report and pass HB 630, we will focus our efforts on persuading the House to approve SB 95 when it arrives there. 

Please thank your senator for supporting SB 95.

Thursday, March 25, 2021 

HB 173-FN, requiring the independent investment committee of the New Hampshire retirement system to report investment fees.  Passed. 

HB 383, relative to the quarterly or semi-annual collection of taxes in certain municipalities. Passed. 

SB 72-FN-A-L, relative to a state share of retirement system contributions by employers. Laid on Table.  NHMA Policy. 

SB 85-FN, establishing a broadband matching grant initiative and fund.  Passed. 

SB 89, adopting omnibus legislation relative to election procedures and registers of probate. Passed with Amendment. 

SB 95-FN, adopting omnibus legislation relative to remote meetings and penalties for violation of privacy.  Passed with Amendment. 

SB 100, adopting omnibus legislation on commissions and committees. Passed with Amendment. 

SB 102, adopting omnibus legislation on property taxation. Passed with Amendment. 

SB 119-FN, relative to the ordinary death benefit in the retirement system.  Laid on Table. 

SB 127-FN-A-L, adopting omnibus legislation on appropriations. Laid on Table.  NHMA Policy.