What is a default budget in New Hampshire?
Mar. 9—Voters across the state want to know: What exactly is a default budget?
A staple in New Hampshire since the official ballot law (SB2) passed in 1995 and about 35% of towns gradually adopted the process, the default budget is often confounding. On Tuesday, voters in SB2 towns will have a choice, say yes to the proposed town and school district budgets for the next fiscal year, or if they fail to get a majority of the votes, let them default to something closely resembling the current budget.
A default budget is the previous year's budget plus any recurring fixed costs in the coming year that the town or school district are already obligated to pay legally — like a contract for employees or debt payments. Sometimes the default budget goes down because those payments decrease. Default budgets also take into account "one-time expenditures" that were only for the previous fiscal year.
Got all that?
In simplest terms, a default budget is just pausing new spending outside of proposed warrant articles on the ballot that separately ask voters to pay for new stuff. For an analogy, think about your household budget. You might not have money for a family vacation to Disney next year, but you still have to pay your mortgage or rent, right? So, you tighten up.
In towns like Merrimack this budget season, the contents of the default budget have become lightning rods because budget committee members or taxpayer associations have questions about what recurring costs the town "has to" pay next year.
That largely depends on the town or school district and what they are under contract to pay. Sometimes there are disagreements over items like new textbooks for students or even things like materials for maintaining roads — budget lines too small to be a separate warrant article, but still really expensive. Especially amid recent inflation.
"While the per-unit cost for certain commodities may increase from one year to the next (such as the cost per kilowatt-hour of electricity or the cost per ton of asphalt), the default budget includes the 'amount' of the money appropriated for that purpose the previous year, not the amount that will be required for the same number of units in the coming year," according to the New Hampshire Municipal Association.
If inflation goes through the roof, the town has to adjust.
Default vs. budget cuts
Let's be clear, the default budget is not a way to cut spending.
But if residents want to lower their property taxes, which pay for the vast majority of their local facilities, what can they do?
The answer: Go to the deliberative session and amend the proposed budget.
That's really the only way other than running for local boards or working closely with officials during the entire budget season.
One-time expenditures
The New Hampshire Municipal Association explains one-time expenditures by giving the following example: "If the town had to buy a piece of equipment that was not likely to be needing replacement on a regular basis, that would be a 'one-time expenditure' not likely to reoccur in a succeeding budget."
So, for things like buying a new fire engine or leasing new police cruisers or putting a new roof on a school, those are not technically "recurring" even though towns have to pony up eventually.
The key is, does it have to be done every year? If yes, it's a recurring cost. If no, it's not.
Debates arise over the question, "Does it really need to be done next year?"
Again, the time for that argument is the deliberative session. The default budget freezes annual recurring costs.
But, alas, it doesn't increase your taxes all by itself. Your town or school district already did that. Voters already voted on all previous spending.
And that's your default position.
Election day
Tuesday is election day for SB2 town meeting communities. Most polls are open from 7 a.m. to 7 p.m. Check your municipal or school district website for your specific times.
dpierce@unionleader.com
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