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City, schools should give taxpayers the break they deserve, by John McGauley

How about this idea: In this month’s real estate tax bill that arrives in residents’ mailboxes, why not a 15 percent reduction or amnesty?

You know, 15 percent is the national average of what just about everyone has experienced in asset losses combined with furloughs, layoffs, and lost customers and business, since St. Patrick’s Day.

Hey, share the pain, guys. March, April and May have been gut punches, and June, July and August will be the same for all of the city’s taxpayers. Already two Keene restaurants and two Marlborough eateries have announced they are closed for good, and they’re just the canaries in the mine for what’s coming for many small businesses.

Yeah, I’m talking to you, SAU 29 school district, gobbler of two-thirds of the real estate tax revenues. And you too, city of Keene, which gets most of the remainder.

How about this scenario? The school superintendent and the city manager direct each of their department heads to come up with a 15 percent cut in their budgets, effective June. Then the school board and City Council members approve those reductions.

It’s the new normal. And even if a COVID-19 vaccine were developed next month, the economy is still going to be in the tank for the remainder of 2020. When that printed federal money stops being dumped into personal bank accounts in the next two months, we’re going to find out how brutal the consequences of the virus shutdown will be.

Here’s the situation. Around here there are a whole lot of old people and they either own a home or rent an apartment. They’ve been trying to move out of town for some time already to avoid the high real estate taxes, if they own their property, or high rents, caused by landlords having to pay the high taxes. Food and medical expenses are their two top expenses, and in this time of exigency, taxes come fourth or fifth in line.

Next is young families, and in many cases one of the spouses has been furloughed or outright laid off. That’s a 50 percent cut in income. Whoaaa!

Next are businesses. The customers have disappeared.

You’re a landlord and tenants have already told you they can’t pay the rent, or only half of it. Their leverage is they’ll abandon the property. Can you live with half a loaf? But you were relying on that rental income to pay taxes and the mortgage. Maybe they were relying on Keene State or Antioch students, but perhaps not as many are coming back for the fall semester as anticipated.

A third of the city’s land is tied up in nonprofits like churches, Keene State, the hospital, nursing homes, social service agencies. They’re off the rolls. The new Hillside Village on Wyman Road, vast and opulent as it is, is not obliged to pay real estate tax.

What about the state of New Hampshire helping us out? Well, one of the major sources of its income is the meals and hotel room tax. Guess what? That ceased to exist as of mid-March. They’re looking for the feds to bail them out.

For years economists have noted that municipalities, states and school districts have agreed to generous pensions for their employees, without paying attention to building up commensurate asset reserves to fund said benefits. They kicked that can down the road until it met the COVID-19 brick wall. Those are contractual commitments that must be paid to retirees. On average, those pensions consume about a third of all state and city revenues nationwide. Short of default, those must be paid.

The virus screwed everything up. As they say, the best laid plans of mice and men …

Is it likely the school district and city will reduce spending by 15 percent? No. But strangely, I’ll wager they’ll end up anyway with 15 percent fewer dollars in this round of real estate taxes for January through June of 2020.

Why? You can’t get water from a stone. A proportion of residents will either not pay them, or only pay some of their assessment. Why? For the simple, compelling reason they have no money!

What are the school district and city going to do about it?

Not much they can do. They can throw tax liens on property, but it’s a three-year legal process to eventually hoist real estate up for auction to pay delinquent taxes.

Some people will just walk away. Let the city have the property; it wasn’t worth much anyway. What’s the city going to do when it’s saddled with a hundred empty properties it now owns?

Perhaps the school and city leaders are discussing all of this in private. Maybe it’s time they talked about it in public, too.

John McGauley, an author and local radio talk-show host, writes from Keene. He can be contacted at mcgauleyink@gmail.com

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