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State budget restores flood control payments; effort under way to collect millions from Massachusetts

For years, New Hampshire has complained that Massachusetts is short-changing the state on payments required by 1950s-era flood control compacts e_SEnD to the tune of $4.5 million since 2000, according to Granite State officials.

Two years ago, with a tight state budget, New Hampshire stopped covering the Bay State’s unpaid share of the bill. That meant towns such as Hopkinton and Webster missed out on payments totaling about a half-million dollars a year.

But under the new two-year state budget that went into effect July 1, New Hampshire will once again cover the full payments to towns under the flood control compacts for the Merrimack and Connecticut river valleys. And state officials are making a fresh push to convince Massachusetts to cough up the millions they say it owes its neighbor to the north.

New Hampshire’s lawyers have an extra incentive to work quickly: In fiscal 2015, which begins next July, the Department of Justice will have to pay $250,000 out of its own budget to help cover the flood control payments.

That provision was added by the Senate “to make sure somebody starts fighting this battle,” said Sen. Chuck Morse, a Salem Republican and chairman of the Senate Finance Committee, during a budget negotiating session last month.

“I do think it’s a fight that needs to happen,” Morse added, “and it’s only going to happen if the attorney general makes it happen.”

The office of Attorney General Joe Foster says it’s working on it. The commission that’s supposed to oversee the Merrimack River flood compact has been reformed, with an initial meeting scheduled for July 19. And New Hampshire has threatened to take Massachusetts to the U.S. Supreme Court over years of missed payments and underpayments.

“The hope is the commission will work out some things, and perhaps the attorney general can work out others,” said Senior Assistant Attorney General Peter Roth. “It’s a little early to tell.”

Massachusetts officials declined to comment on the dispute ahead of the July 19 meeting.

Paying the bill

In 1957, the U.S. Congress gave its blessing to a deal between New Hampshire and Massachusetts.

The federal government would construct flood control infrastructure, including dams and reservoirs, in New Hampshire to prevent flooding on the Merrimack River. To compensate towns for their lost property, the two states would make annual payments for lost tax revenue e_SEnD with Massachusetts picking up 70 percent of the bill, since it got most of the benefit.

A similar deal had been struck in 1953 for flood control on the Connecticut River, a compact that included Vermont and Connecticut.

But starting in the 1990s, New Hampshire said, Massachusetts began paying less than it owed. In some years, the Bay State didn’t pay anything at all.

Tensions rose.

“I’d like to take the dams out and wash the bastards out to sea, but I haven’t figured out how to do that legally,” said then-state Rep. Richard “Stretch” Kennedy, a Republican from Hopkinton, in spring 2006.

That summer, then-Gov. John Lynch threatened to sue Massachusetts unless it paid up. Within a week, Mitt Romney, then governor of Massachusetts, sent New Hampshire a check for nearly $589,000 in what his spokesman at the time called a “gesture of good faith.”

But, New Hampshire officials said, Massachusetts has continued to underpay its obligations under the two compacts, and some years it sends no money at all.

In a Jan. 8 letter to Massachusetts Attorney General Martha Coakley, then-New Hampshire Attorney General Mike Delaney pegged the money owed under the two compacts since 2000 at roughly $4.5 million.

Delaney’s letter made a formal demand that Massachusetts make “prompt payment of the reimbursements” to resolve “this growing interstate problem.”

The implied threat was that New Hampshire could take Massachusetts to court – an option Roth said hasn’t been taken off the table. Such a lawsuit would be filed with the U.S. Supreme Court, which handles legal disputes between states.

In the meantime, New Hampshire’s state government had been covering Massachusetts’s share of the bill and made sure towns got the money they were owed. But with the tight state budget in 2011, that money was cut, and New Hampshire only made the payments that it owed to towns.

Gov. Maggie Hassan, a Democrat, included funding for New Hampshire’s share, $225,000 a year, in the budget proposal she unveiled in February. The Senate later added a little more than $560,000 a year to cover the rest of the payments for fiscal years 2014 and 2015, and that money made it into the final budget signed by Hassan last month.

The Senate came up with the extra money, in part, by billing the Department of Justice – $250,000 a year would be siphoned out of the department’s budget to help cover the flood control payments.

Morse and other senators said that would provide an incentive for the office to vigorously pursue repayment by Massachusetts.

“Those compacts were entered into in good faith. . . . This is a strong attempt to make sure something positive happens,” said Sen. Lou D’Allesandro, a Manchester Democrat.

House budget negotiators objected, saying it punished the wrong people. In the end, they agreed to split the difference, delaying the budget hit to the attorney general’s office until the second year of the biennium.

That, negotiators said, would give Foster, who took office in May, more time to make progress in negotiations with Bay State officials.

Local officials are delighted to get their full payments back.

“We’re very happy with the outcome,” said Jim O’Brien, chairman of the Hopkinton selectmen.

There are signs of progress, too, in the standoff with Massachusetts. The Merrimack River Valley Flood Control Commission, which is supposed to oversee the compact, will meet July 19.

“Apparently there haven’t been meetings for quite some time . . . but after that meeting, we should have a better idea of where we stand,” said Bryan Pellerin, a former Hopkinton selectman and recently appointed member of the commission.

(Ben Leubsdorf can be reached at 369-3307 or or on Twitter @BenLeubsdorf.)

Legacy Comments1

""$250,000 out of its own budget"" - Seriously, how is that going to affect the DOJ. Does anyone believe they will take a cut in pay or lose some benefit or give up anything personally. What they will do is just cut back on a service provided to the citizens and then blame the state for cutting the budget. A more important question is why they have done nothing all these years, why has no one from the state challenged them in their lack of even trying. I guess it just gets chalked up to another group of employees with "no accountability".

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