Column: Rescind or keep the fiscal year?
Last year the fiscal year was passed and an 18-month budget has been prepared.
Perhaps because there was no fiscal impact mentioned in the voters’ guide you may not have understood the financial impact of the change.
I’m not saying the article was confusing and you did not understand the language, but my guess is unless you are knowledgeable about municipal budget law you may not have been aware of the cost.
Reality: The entire amount of the 18-month budget must be assessed and collected this year.
Result: Our tax burden will be roughly $1.2 million more than last year. A lot of money, even if you say it fast.
The administration is fond of giving big numbers in small increments: this is only $418 to the owner of the mythical $200,000 house. Sorry, it’s still a lot of money. Will you be someone who has to choose between paying this additional tax burden or the oil bill this December? Or if you escrow your taxes, as most do, the havoc created will increase your house payment to re-coup the shortage and your mortgage company will think the tax billed is for 12 months and increase your monthly payment accordingly.
The other option is to bond the added tax burden. In other words “borrow” it to lessen the impact.
The biggest advantage to changing to the fiscal year is cash flow. By changing to the fiscal year the town will have the first installment of taxes in-hand before spending starts. However, the state allows towns to borrow money in anticipation of receiving taxes if need be, and since 2002 Rindge has only borrowed three times. Last year due to an error that made the tax bills late. The interest paid was roughly $10,500 total for the previous 11 years.
The interest on a bond for the five years discussed will be well over $70,000. Does it make any sense to you to pay that much interest to not have to “maybe” borrow for the next 10 years? Not to me.
In addition to the interest, bonding will add over $200,000 to the budget annually for the debt service for the five years discussed.
If the town needed to borrow every year to cover expenses before taxes were paid, this change to the fiscal year would make some sense to me.
Some of the other “advantages” to changing to the fiscal year that you may have heard are prefaced with: “it will be better for the town.” My personal opinion is the “town” is not the administration, the BOS nor the employees of the town office; the “town” is the citizens and taxpayers who pay the bills.
“It will align the town with the state and school district so the town will be able to prepare the budget after we know if the state is going to cut our funding. “We won’t have to prepare the budget during the holiday months and at year-end.”
Neither is true as we are not voting to change our Town Meeting to May. Another option with “unintended consequences.”
Something to consider: There are 211 towns in NH and less than 20 have felt the need to burden their citizens with the cost of changing to a fiscal year.
I, personally, cannot find enough of a benefit to the citizens to outweigh the financial burden, so I will be voting “Yes” on Article 9 to rescind last year’s vote to change to the fiscal year.
Note: If the rescind article passes, the town will have to have a special Town Meeting to establish a 12-month budget. I believe it will cost less than $5,000 to do so.
Roberta Oeser is a Selectman in Rindge. These are her personal opinions and aren’t meant to reflect the sentiment of the Board.