New Hampshire renews full flood control payments; towns pessimistic about outstanding debts from Massachusetts
Local officials have found much needed extra cash in town bank accounts this year as New Hampshire began reimbursing 18 towns for the full amount they are owed under a 1950s flood control compact.
But they aren’t holding their breath for Massachusetts to cough up money it has shortchanged communities for the past few years while New Hampshire refused to cover its neighbor’s portion of the bill. And they aren’t optimistic that the Bay State will fork over more than the $4.5 million debt to New Hampshire it has accumulated since 2000.
Under the terms of the Merrimack River Valley Flood Control Compact, the federal government would build dams and reservoirs to protect the Merrimack River Valley from floods. The two states pledged to make annual payments to compensate towns for potential lost tax revenue. Massachusetts would foot 70 percent of the bill, since most of the communities that would benefit are in the Bay State, and New Hampshire would pay the remaining 30 percent.
But New Hampshire claims Massachusetts has been short-changing the state since the 1990s, at first making partial payments and then making no payments at all. New Hampshire paid Massachusetts’s portion until 2011, when a tight budget cut those designated funds. Then the state paid only its promised 30 percent of the costs, shorting the 18 towns by more than $500,000 a year.
So officials, such as Jim O’Brien, chairman of the Hopkinton Board of Selectmen, fought New Hampshire legislators for their small-town budgets and won. The state budget for fiscal years 2014 and 2015 includes money to compensate towns for 100 percent of the flood control money they should receive.
“From our town’s narrow perspective, we’re very pleased with the outcome, that the state of New Hampshire has gone back and made our town whole and agreed the town shouldn’t be the ones holding the bill,” O’Brien said. “We (as a town) can’t go and sue Massachusetts for nonpayment.”
The state deposited $210,515.94 into Hopkinton’s bank account at the end of September, O’Brien said. (The amount is adjusted each year based on tax rates.)
But for the last two years, the town received only 30 percent of the amount due – $59,797 of $199,326 per year. The missing payments for Massachusetts’s 70 percent – about $140,000 per year for two years – are still unaccounted for.
“Town governments are pretty lean and mean,” O’Brien said. “We’re not flush with cash. So having a ($140,000) revenue that doesn’t come in falls on the back of reducing expenses . . . or raising taxes.”
The Merrimack River Valley Flood Control Commission, which was supposed to monitor payments and has been defunct for years, has been resurrected with new members to make Massachusetts write its checks again. The commission, with three representatives from both states, has been meeting since the summer, and O’Brien said that step makes him more confident Massachusetts will start paying its 13-year-old debt.
But he still isn’t sure that will begin in the near future.
“It would be wonderful if the states of Massachusetts and New Hampshire will reach an agreement. . . . That would be great for the taxpayers because they’ve kind of picked up the slack,” O’Brien said. “Am I optimistic that will happen? I’m not sure. But I would really like it to happen.”
Les Hammond, chairman of the Dunbarton Board of Selectmen, is not optimistic the town will receive the money it is owed from Massachusetts for 2012 and 2013 any time soon – or that the town can count on flood control payments at all in the future of the agreement.
“Based on past experience, I don’t have any reason to believe that will happen,” Hammond said. “I hate to be a pessimist. I’m not trying to be a pessimist. I’m trying to be a realist.”
Dunbarton should receive about $62,000 to $65,000 per year, but that payment dropped to less than $20,000 in 2012 and 2013.
The town held a public meeting last week to determine how to spend $47,000 that has found its way back to the town bank account this year. The money will help the town repave shoddy parking lots near the town office, Hammond said.
“That’s something we probably wouldn’t have gotten to for quite some time,” he said.
In Weare, Chairman Tom Clow said unexpected funds from full flood compact payments could potentially help lower the tax rate for the town’s taxpayers.
Weare’s payment amounts to about $65,000, which was reduced to $17,900 in 2012 and 2013, said Town Administrator Naomi Bolton. With payments made whole again, Clow said the extra 70 percent of Weare’s money received this year will go to an unanticipated funds balance.
“Any money that comes in as revenue that builds up that (unanticipated funds balance) will help on the tax rate,” Clow said. “Our board has been very good about applying funds to offset taxes. That’s our history. If the opportunity is there, we usually do apply funds . . . to keep the tax rate down.”
The selectmen will negotiate the tax rate in coming weeks, so Clow couldn’t estimate the exact impact of this money for taxpayers. He’s also cautious to celebrate too soon.
“My approach on all this is, seeing is believing,” he said. “When the cash is in hand, I’ll be more excited.”
New Hampshire Assistant Attorney General Peter Roth has threatened to sue Massachusetts over the missed payments if the commission can’t come up with a resolution.
If Roth can’t persuade Massachusetts officials to pay up before fiscal 2015, which begins in less than a year, the Department of Justice will have to pay $250,000 out of its own budget to help cover the flood control payments.
As Roth deals with Massachusetts’s debt, town officials like Hammond can understand the pressure a tight budget would put on the attorney general’s office.
“It was very frustrating that we were going backward,” Hammond said. “This is going to help us catch up a little bit. . . . (Massachusetts) balanced their budget partly on our backs.”
(Megan Doyle can be reached at 369-3321 or email@example.com or on Twitter @megan_e_doyle.)