Penacook sits in the center of a Venn diagram of two taxing entities — the City of Concord and the Merrimack Valley School District (MVSD). While Penacook shares city services with Concord, there are two things its citizens don’t have in common with the rest of Concord’s residents: a property tax rate and a school district.
Penacook’s 2020 property tax rate ($29.93) is more than three percentage points higher than Concord’s. Approximately 54 cents of every dollar collected goes to fund the MVSD versus 49 cents per dollar that Concord pays for its schools. Furthermore, Penacook hasn’t experienced the sort of commercial and economic development that would increase revenue for the community.
This might have changed with the Exit 17/Whitney Road project, which promises to be a long-overdue restarting of Penacook’s economic engines. As a community with high property taxes, Penacook shoulders a disproportionate burden of the cost of paying for public education. That burden is shared with four other towns in the MVSD: Boscawen, Loudon, Salisbury and Webster. The arrival of a project that creates opportunities for businesses and increases Penacook’s tax base could be a win for everyone, businesses, developers, taxpayers, students and families, if the revenues generated by the new development are shared equitably.
This can be done if Concord were to agree to enter into a revenue-sharing agreement with the MVSD regarding the Tax Increment Financing (TIF) District designation it recently granted the Whitney Road project.
In late February, we wrote to the city with this request. After seeking a response from the city, in May we were finally informed that Concord did not act on our proposal to share future revenue increases with the MVSD. We did not object to the TIF designation. We sought to ensure that revenue we would have received through increased property values at Exit 17 be rightly invested in education.
This does not have to be an all-or-nothing proposition. We’re asking for a reasonable cost-sharing agreement in which the interests of both parties, the City of Concord and the Merrimack Valley School District, are respected and responsibly served. In the absence of such an agreement, 54% of the revenue generated by the Whitney Road project for the next twenty years will not fund the MVSD, as tax bills will suggest. Instead, two decades’ worth of taxes that property owners would expect to fund our schools will fund a shopping plaza.
According to RSA 162-K, all municipalities in the state have the power to lay claim to revenue that would otherwise fund school districts when they establish TIF districts. Once a TIF district is created, an affected school district would continue to receive only the same amount of revenue available to it at the moment that the TIF designation was granted. Any additional revenues raised as a result of development within the TIF district would be seized by the city or town and reinvested in the TIF.
Penacook residents should question why revenues meant to pay for education are being “captured,” in the parlance of RSA 162-K, and diverted to the Whitney Road project. While this directly affects us, this is something that should concern all school districts in New Hampshire. The RSA does not allow the state’s school districts to opt into this situation. it ensnares them by default.
A school district must instead throw itself on the mercy and magnanimity of a municipality in an Oliver Twist-like request for what it needs to survive and what should be theirs by rights. By writ, once a city or town establishes a TIF district, school districts are boxed out of future education funding unless a municipality is feeling generous enough to share in its good fortune.
Ironically, at a time when education funding is especially strained, a project that might have brought some long-overdue relief to Penacook taxpayers may, instead, increase their tax burden as residential property values, and thus taxes, rise as a result of development. And yet, for as long as the TIF designation lasts, none of the revenue generated by the Whitney Road project will go to the MVSD. If the TIF remains in place until 2044, as Concord’s Director of Development Matt Walsh suggested it might (Monitor, 4/19), an entire generation of MVSD students will lose out on millions of dollars in school funding.
We believe the right thing to do is for Concord to release a fair and reasonable share of the taxes generated by the development to the MVSD for purposes of funding local education. The city is not responsible for the state’s education funding formula, however, it is responsible for how it hamstrings revenues meant to fund schools in a district that partially falls within its city limits.
The MVSD is asking that Concord reconsider its decision in order to be good stewards of revenues raised by Penacook taxpayers with the expectation that those taxes will fund our schools. Penacook residents have needed that relief for a long time. The MVSD wants to be good partners with the city in bringing about this much-needed economic development and change for the good. What we don’t want, though, is for that to happen on the backs of the school district’s taxpayers and students, and certainly not for decades to come.
(Mark MacLean is superintendent of Merrimack Valley School District. Chairperson Seelye Longnecker, Tracy Bricchi, Lorrie Carey, Sally Hirsh-Dickinson and Jessica Wheeler Russell are MVSD School Board representatives.)