Public hearing Feb. 3 on replacing ‘spending cap’ with annual budget limitation

Share the Ink Link love

NASHUA, NH – A public hearing on resolution R-25-121 is on the calendar for Monday, Feb. 3 at 7 p.m. 

The resolution proposes an amendment to the city charter by deleting certain sections and adding another to establish a limitation on annual budgets. 

The public hearing will be followed by a personnel/administrative affairs committee meeting where the committee will decide whether to recommend the resolution to the full Board of Aldermen (BOA). 

If approved by the full board, the question of whether to approve the charter amendment will be added to the ballot during the next municipal election.

As summarized in the resolution, the amendment would “limit the annual budget and other appropriations such that the amount to be raised for municipal property taxes will increase by no more than a specific inflation factor plus property taxes imposed on new construction unless ten aldermen vote to override.” 

This would delete the “spending cap,” erasing Charter sections 56-c, 56-e, and 56-f, and add a new Charter section. 

Charter sections that would be deleted under R-25-121

56-c. Limitation on budget increases 

Section 56-c. establishes that the mayor and BOA shall “consider total expenditures not to exceed an amount equal to the combined annual budget of the current fiscal year, increased by a factor equal to the average of the changes in the Gross Domestic Product Implicit Price Deflator (IPD) for State and Local Government Consumption Expenditures and Gross Investment of the three (3) calendar years immediately preceding budget adoption as published by the Bureau of Economic Analysis.”

56-d. Exception to the budget limitation 

Under section 56-d., principal and interest payment of municipal bonds, and capital expenditures deemed necessary by the mayor and BOA are exceptions to the budget limitation. 

56-e. Reserve fund 

This section states that money collected from property taxes and/or revenues that exceed the budget allocation shall be put in a reserve fund. The money in this fund shall be drawn upon as a contingent revenue source in succeeding fiscal years to offset part of the budget that would otherwise be funded by property taxes. 

New Charter section under R-25-121

The new charter section would establish that the adopted budget shall authorize expenditures from the general fund, enterprise and special revenue funds at or below a Budget Limit. 

The Budget Limit would be defined as the Prior Year’s Property Tax Levy increased by the Inflation Factor (described in the existing charter under 56-c), and New Net Construction Revenue.

 New Net Construction Revenue being “estimated property tax revenue from construction activity within the city between April 1 of the prior year and March 31 of the current year less estimated reduced tax revenue caused by damage or destruction of real property improvements during such time period.”

In the absence of an override, “no additional, supplemental, or special appropriation during the fiscal year when combined with the budgeted appropriations shall cause the Budget Limit to be exceeded.”

Authorized borrowing shall be deemed to permit the spending of the borrowed funds for its stated purpose, and shall not be considered an additional, supplemental, or special appropriation. 

Grants, gifts, and other revenues from sources other than property taxes and not included in Projected Other Revenues during the budget adoption process may be appropriated and excluded from the Budget Limit by a super majority vote from the BOA. 

The charter would also state that all provisions under this new section can be overridden by a super majority vote of at least 10 aldermen. 


Love the Ink Link? Never miss another thing. Subscribe to the FREE daily eNews + publisher’s note!

We don’t spam!