Particularly when economic times are good, it’s easy for politicians to say and do the right thing — creating programs for the poor or ailing; vowing to support services that benefit the everyman; establishing formulas for sharing revenue. But then times get tougher, and competing priorities undermine those good intentions.
Somehow, though, when things start looking up again, there are shiny new ideas to spend that money on and those old commitments fall by the wayside. There’s a long history of broken promises regarding funding for programs, mandates passed down and obligations dismissed — or at least, conveniently forgotten.
One need only look at the federal Individuals with Disabilities Education Act, which requires public school districts to provide a free, appropriate education to all students with disabilities. It can be very costly in cases where the student has severe disabilities. So the law came with a promise by Congress to pay 40 percent of the bill. That’s never happened, and in 2017, federal IDEA funding for New Hampshire was $49 million. That’s a lot, but the full 40 percent of the cost would be $134 million.
Or consider the myriad ways the state has reneged on promised funding through the years, from dipping into the supposedly “dedicated” LCHIP account to backing off its share of pension funding for the state retirement system, to halting school building aid and underfunding education aid, to the woeful Medicaid rates the state pays to health providers to care for the poor.
Then there’s New Hampshire’s Meals and Rooms tax. Because Granite State politicians have no stomach for so-called “broad-based” taxes, the Meals and Rooms tax was implemented in 1967 as one more piecemeal way to hit up discretionary spenders. In this case, it taxes hotel room bookings and dining out. According to the N.H. Municipal Association, the deal was that the state would take 60 percent of the money raised, and the municipality where the spending occurred would get 40 percent. That bargain was broken long ago, and in recent decades has become little more than a pipe dream for cities and towns.
All of these broken promises are coming to a head as voters and local officials try to deal with the pressure such short-changing puts on property-tax payers. Keene City Councilor Randy Filiault suggested recently the council draft a resolution urging state officials restore the original funding split of the Meals and Rooms tax. He pointed out that while Meals and Rooms tax revenue has increased by 58 percent statewide since 2010, the municipal take has dropped from 29 percent to 21 percent.
Filiault has a good point; so good, in fact, that when he brought it before the council, it became clear he isn’t thinking big enough.
City Manager Elizabeth Dragon said any letter from the council ought to also address state revenue sharing, which was suspended in 2010, as well as municipal bridge aid and the state retirement system. And Cheshire County Administrator Chris Coates noted the low Medicaid rates, discontinued block grants and changes to business taxes have left counties struggling to keep up. Councilor Terry Clark chimed in that school districts, too, have been shortchanged.
Mayor Kendall Lane offered that the issue is too urgent to delay, since the Legislature is in the midst of finalizing the state budget (the Senate Finance Committee, in fact, adopted a revised House budget plan Friday). Lane said drafting a resolution would take too long and the council ought to instead send a letter. Coates suggested it include all the issues raised, not just the Meals and Rooms tax.
We doubt the state is going to react to such a letter — or even letters from multiple communities — by immediately revamping the budget to meet its promises. But the more local officials squeak about the inequities of state policies, the more grease they’re likely to get. The same goes for the state arguing to Congress to fully fund the IDEA and other obligations.