State Averts Potential Delay in Setting Tax Rate

On Oct. 1, the New Hampshire Department of Revenue Administration (DRA) made an announcement that created chaos in municipal tax collectors’ offices across the state. After legislative pressure was brought to bear on both the Department of Education and the Department of Revenue Administration, accommodations were made that were more in line with what normally happens at tax-setting time.

The Oct. 1 DRA Technical Information Release in part stated: “Senate Bill 401 revised the calculation of state adequacy aid pursuant to RSA 198:38 and requires the Department of Education (DOE) to utilize the average daily membership in attendance data (ADMA) from the school year immediately preceding the year for which aid is determined (e.g., ADMA from the 2012-2013 school year will be used to determine aid for the 2013-2014 school year). Prior to Senate Bill 401, adequacy aid was determined with the second year preceding the year for which aid is determined.
“As a result of the change in the law,” the release stated, “the DOE will not be able to finalize 2012-2013 ADMA calculations and state adequacy aid until Nov. 7, 2013.”
The resulting delay in setting tax rates could put some municipalities in financial difficulties, leaving them without sufficient funds to meet their financial obligations and forcing some to borrow funds to meet those obligations, as revenues would not be available in time.
Hampstead’s Town Clerk/ Tax Collector Patricia Curran said that should the DRA stand behind its delayed tax-setting date, it would require moving the Dec. 1 tax due date.
“After the DRA and the Board of Selectmen set the rate for the town, there is a two to four day waiting period for confirmation of the rate,” she explained. “Once we in the Tax Collector’s Office receive the confirmation, on the advice of the DRA, we wait another five business days before the warrant is processed. As soon as I receive the signed warrant from the (selectmen), we start processing immediately. It takes us two days to process, print and to prepare tax bills for mailing. The bills are due 30 days from the date the bills go into the mail.”
Legislators around the state received frantic calls from municipal officials and pressure was brought to bear on the Department of Education and the DRA. The result was that on Thursday, Oct. 3, a second Technical Information Release was issued by DRA, saying that in response to the concerns raised by state and municipal officials regarding the proposed delay, officials from the DRA and DOE met and the DOE said a revised estimate of state adequacy aid could be made in “the very near future…Based on the DOE’s ability to provide the DRA with a reasonably accurate set of revised estimates by Oct. 11, the DRA anticipates setting municipal tax rates in October.
“Last year, the first rates were set on Oct. 19, and it is likely to begin this year on Oct. 22,” the DRA release states. “It is now the DRA’s determination that the finalization of municipal tax rates can proceed with minimal delay while also providing for accurate tax rates.”

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