When Ryan D. Provost of Allenstown received his tax bill, he knew he couldn’t stand idly by any longer. His property had lost value, but his tax bill went up anyway. That’s when he decided a tax cap was the only answer.

The tax rate
The Allenstown tax rate has increased 18 percent, despite a virtual sweep of “no” votes on the school and town ballots last spring.

The current tax rate is $27.19, up $4.19 from last year’s rate of $23.00. At least part of that hike came from greatly decreased property values.

“We lost $3 million in assessed value,” said town clerk Diane Demers.

The town portion of the tax rate went from $5.59 to $6.38; the school portion from $12.70 to $15.89; and the county portion from $2.33 to $2.56. The state school tax actually decreased from $2.38 to $2.36.

The tax cap petition Provost, 31, lives with his wife and three young children in a home he recently remodeled to add a second floor.

“The taxes in Allenstown have become out of control,” he said. “The taxpayers can’t afford it. You can’t bankrupt the residents of a town by taxing them.”

His home, which was previously assessed at $184,000 was reduced to $180,000, but his tax bill rose from $4,200 for the year to $5,600.

“I don’t understand how you can reduce the assessment value on my property and increase my taxes,” he said.

Provost decided a tax cap is the answer, and he has circulated petitions at the Bi-Wise Market and GE in Hooksett, where he works as a welder and where many other Allenstown residents work.

His petition does not specifically ask for a percentage or dollar amount limit, but does ask for a tax cap. It also asks for help in moving the project forward.

To that end, Provost has formed the Allenstown Concerned Taxpayers Organization.

Those wishing to help or get more information can contact Provoat at 485-7497 or rdprovost@verizon.net.

Provost said his job prevents him from attending budget committee meetings and deliberative sessions, but he does vote. “It all has to do with them meeting their budget,” he said, “They need to amend their budget.”

Franklin capped taxes
Franklin was the first place in New Hampshire to enact a spending and tax cap, in 1989.

Mayor Kenneth Merrifield claims great success with the cap, resulting in stable, predictable growth in taxes each year.

In a statement posted on The New Hampshire Advantage Coalition’s Web site, Merrifield notes there are provisions for emergency or exceptional costs, but the cap has forced Franklin to reorder its prorities. Franklin has renovated its high school, paid off a middle school bond and expanded its elementary schools under the cap.

“We have never had a layoff of personnel associated with the tax cap,” said Merrifield. “In recent years, we have increased salaries to market median and added some positions.” Merrifield reports no disastrous results due to the cap. “Why must local government increase its cost to taxpayers at a faster rate than everything else in the general economy?” he said. “The simple answer is: because we allow it to happen. The tax cap is a sensible and moderate means to change that.”

Is it realistic?
Having a default budget does not necessarily mean the amount spent by a town stays the same or decreases. Often the default budget does increase because there are legal obligations that force more spending, such a union salary increases and insurance increases.

“We have to increase the budget for those items which we have a contracted service for, and those contracted services go up,” said Allenstown Board of Selectmen Chairman Tom Gilligan. “One of the items which is protected are health insurance costs.”

Gilligan listed a few of the items that went up in cost that had to be accommodated:
• Elections increase of $7,000 (the town went from two elections to four).
• Financial administration increase of $16,679 (the town’s assessing contract moved from $40,000 to $56,000).
• Legal fees up $10,000.
• Personnel administration increase of $79,236 (this included an increase in health and dental insurances, an increase in the New Hampshire retirement employer contribution, and an increase in Worker’s Compensation insurance).
• Property insurance up $8,500.
• Library budget up $5,355 due to health insurance costs.

Worsening the problem, the town’s overall property value decreased by more than $2 million. “Using 2007’s assessed valuation, our 2008 tax rate would have been $6.335 per $1,000 of assessed value,” said Gilligan “The loss of $2,187,138 resulted in an increase in the 2008 town tax rate of 4.5 cents.”

Selectmen did try to cushion the blow by using money from the unreserved fund balance.

“If the Selectmen had not used any unreserved fund balance to reduce taxes, the town’s portion of the tax rate would have been $7.248 per $1,000,” said Gilligan. “By choosing to use $250,000, the board lowered this to $6.38. Therefore, it is factual to say that $250,000 of fund balance decreased the tax rate by 86.8 cents.”