We Used $7.1 Million of the $9.6 Million City Surplus to Hold Down the Tax Rate
During the City’s past fiscal year – FY 17 ending on June 30, 2017
– City government was able to generate a $9.6 million surplus.
I proposed that we help our taxpayers by using $7.1 million of the City surplus to hold down the tax rate. The Board of Aldermen adopted my proposal on a unanimous vote.
Nashua people work hard for their money. And we have many seniors who are on a fixed income. So we need to spend tax dollars wisely and manage our finances carefully in order to keep taxes as low as possible.
How We Generated the $9.6 Million Surplus
The $9.6 million surplus came from 2 sources. First, revenue exceeded estimates by $5.6 million, most of this surplus revenue coming from car registrations. Second, at the end of the year there were $4.0 million of unspent appropriations. By being careful about spending during the year, we saved $1.5 million. The remainder consisted of longer term projects which were not yet complete.
The City has always had a year-end surplus, but the surplus for FY17 was the largest on record. In the previous fiscal year – FY 16, ending June 30, 2016 – we used $4.5 of that year’s surplus to reduce the tax rate.
Using the Surplus to Help Taxpayers
I proposed that we use $7.1 million of our surplus to help taxpayers by holding down the tax rate, and the Board of Aldermen approved. This is a link to the Resolution-17-125 which authorized using $7.1 million to reduce the tax rate: Relief for Taxpayers
Nashua’s Tax Rate
The tax rate for the coming year will be up 2.88%.
Large increases in just 3 fixed costs were the main cause of the tax increase. The State of New Hampshire increased its pension bill to the City by over $2.2 million or by more than 10%. Health care insurance costs were up $3.6 million or by more than 15%. And Pennichuck’s bill to Nashua was up almost $400,000 or by more than 14%. These increases in fixed costs added more than $6 million to the City budget.
Without Major Increases in Fixed Costs, the Tax Rate Would Have Been Flat
Without the major increases in these 3 fixed costs – the state pension bill, health care costs, and Pennichuck – Nashua’s taxes would have stayed at the current rate and would not gone up at all.
Please Keep in Touch
I will continue to update you about City issues. Please contact me at firstname.lastname@example.org with any thoughts or questions about the City budget or about anything else concerning City government.
Mayor of Nashua