In its session next Wednesday and Thursday, February 24 and 25, the House will vote on HB 459, a bill that would punish local officials with fines, attorney fees, court costs, and removal from office for making routine budget adjustments. This is one of several House bills this year that have a troubling anti-local government bent. The House Municipal and County Government Committee reported the bill as Inexpedient to Legislate—which is good—but that vote was very close, at 11-7. 

As those familiar with municipal budgets know, RSA 32:10 allows a governing body to transfer funds from one budget line to another during the year (with some limitations), so long as it does not spend more than the total amount appropriated by the legislative body. This is limited by RSA 32:10, I(e), which prohibits the transfer of funds to any “purpose” for which the legislative body has appropriated zero dollars. The term “purpose” is defined as “a line on the budget form posted with the warrant, or form submitted to the department of revenue administration.” The lines on these forms are quite broad—police, fire, highways, etc. Thus, if a town meeting appropriates zero dollars for the police department, the town may not spend any funds on police. Of course, this rarely happens. 

HB 459 would take this prohibition to an extreme by prohibiting transfers to any line, no matter how far down in the detailed budget, if the line has zero dollars in it. For example, assume the highway department got a bargain on road salt last year and bought a two-year supply, so it leaves that line in its budget blank this year. Under current law, if an unimaginably brutal winter exhausts the salt supply by mid-January, the selectmen can transfer money from somewhere else in the budget; but under HB 459, they will just have to leave the roads untreated for the rest of the winter. 

Towns face many unanticipated expenses during a year—certainly very few local officials expected, at the beginning of 2020, to be spending any money for surgical masks or Zoom licenses. Had HB 459 been in effect, towns might have been prohibited from making those expenditures. 

But the bill doesn’t stop there. HB 459 would make local officials personally liable for even innocent violations of the new prohibition. If there is a prohibited transfer, an action may be brought in superior court, and “the elected or appointed local government official . . .  under whose authority the violation occurred shall be personally liable.” Even if the court finds that the violation was inadvertent, the local official(s) would be subject to (a) a mandatory civil fine of $500; (b) an additional fine equal to “3 times the amount of the prohibited transfer”; (c) payment of all attorney fees; and (d) “removal from office by the governor.” 

Everyone knows how difficult it is to get people to participate in local government. Legislation that subjects them to shame and financial ruin just for trying to do their jobs will not help. Please contact your representatives and urge them to support the committee’s recommendation of Inexpedient to Legislate.

The House Finance Committee voted 21-0 on Tuesday to retain HB 398 and HB 412, NHMA policy bills that would make appropriations to provide state aid grants for municipal water and wastewater projects.  Committee members acknowledged that all money bills in the year of a budget should go into the budget document; and by retaining the bills, the committee would have the ability to do just that.  Members expressed concerns, however, that they do not yet have state revenue estimates from the House Ways and Means Committee; and although the committee has supported these state aid grant issues in the past, members underscored the need to be prudent in the middle of a pandemic.  HB 398 would appropriate $5.7 million for fiscal year 2022 and $6.9 million for fiscal year 2023 to fund 11 eligible wastewater projects not funded in the current biennium, plus 110 new projects expected to be eligible for grant funding in fiscal years 2022-23. HB 412 would appropriate $500,000 for each of fiscal years 2022 and 2023 for public water supply grants. 

One of the most alarming bills we’ve seen this year is CACR 9, which would amend the New Hampshire Constitution to prohibit any municipality from “rais[ing] property taxes more than two percent per year . . .  based on the actual tax of the previous year.” 

While bills like this are fairly common, they rarely garner significant support. However, CACR 9 is very much alive, due to a surprising 10-9 Ought to Pass vote this week by the Municipal and County Government Committee. The good news is that a constitutional amendment requires a 60 percent vote in both chambers before it can go on the ballot; still, this needs to be taken seriously. 

The harm that a two percent tax cap would wreak is pretty clear, and the more one thinks about it, the worse it gets. If a town, through a combination of good budgeting, frugal spending, and good luck, manages to reduce its taxes by, say, five percent one year, it will have set an artificially low ceiling for the next year. It hardly creates an incentive to cut taxes. It also eliminates any incentive for economic development, because the cap is on the amount of tax raised, not on the tax rate. Additionally, municipalities cannot control the increasing costs caused by downshifting or new mandates, such as retirement contributions, or the loss of state aid, as with the suspension of the meals & rooms tax “catch-up” formula. 

CACR 9 will go to the House floor in early March Please urge your representatives to vote down the committee report and support a subsequent motion of Inexpedient to Legislate.

We are going to stop reprinting the instructions, but in case you haven’t seen them, check Legislative Bulletin #6 (page 8 in the PDF version) for instructions on how to sign up and testify at committee hearings. Also see last week's Bulletin (page 6) for a few additional tips. You can find these and all of our Bulletins under the Advocacy tab on our website

Thursday, February 18, 2021 

SB 68, requiring an employer to provide reasonable accommodations for pregnant employees. Passed.