EagleTribune.com, North Andover, MA

October 4, 2013

Fears allayed; tax rates will be set on time

By Doug Ireland

---- — Southern New Hampshire town officials were breathing a sigh of relief yesterday after hearing the state Department of Revenue Administration will be able to set property tax rates on time.

The news came only a day or two after towns were notified rates would not be set until after Nov. 7 — several weeks behind schedule.

The delay could have had a serious impact on communities, forcing many to juggle finances and borrow money to cover their costs.

Taxpayers would have likely been faced with paying their tax bills in the midst of the holiday season.

State law requires towns to give taxpayers at least 30 days to pay their property taxes. The deadline is usually Dec. 1.

Town officials were unhappy and uncertain how the delay could affect their communities’ finances.

“We were livid,” Pelham Town Administrator Thomas Gaydos.

The Department of Revenue announced Tuesday it could not set town tax rates until after receiving updated information from the state Department of Education in early November. The DRA usually begins setting rates about Oct. 19, Commissioner John Beardmore said.

Education aid figures are used to calculate tax rates. A 2012 change in how education aid is calculated meant the Department of Education had to wait for the most recent student attendance rates, Beardmore said.

Beardmore said he questioned the reliability of previous education aid estimates provided to his department and decided to wait for the updated information to be provided Nov. 7. He was afraid the previous estimates would skew tax rates.

But Beardmore said an uproar from public officials across the state and notification from the Department of Education that it could provide updated aid estimates by the end of next week prompted him to change his mind.

“I think the risk is generally reduced,” he said.

Beardmore would not say how many lawmakers and municipal officials complained.

Gaydos was one of those town officials who let his feelings be known. He blames the Department of Education.

“These people in education have known this since last year,” he said. “We all look incompetent.”

Gaydos was relieved to hear about Beardmore’s decision yesterday after wondering if the tax payment deadline would be Dec. 31 — the last possible day.

He said the town was lucky it had $1.9 million in reserve in case it was needed until tax payments were made. But the DRA’s announcement still gave many communities a scare, he said.

“It’s insulting to send bills that aren’t going to be done until about Christmas,” Gaydos said. “There were going to be some people who weren’t going to be able to get their deductions.”

Sandown Town Clerk/Tax Collector Michelle Short was relieved, too.

“That’s good news,” she said. “It obviously put us in a time crunch. It was concerning.”

When Short was notified of the potential delay Wednesday, she immediately expressed her discontent to the DRA. Sandown officials discussed the possible need for tax anticipation notes to cover costs, she said.

Short said she was still upset when she went home that night and talked to her husband about it.

“We were talking about folding tax bills at Thanksgiving dinner,” she said.

Salem Town Manager Keith Hickey was happy to learn there wouldn’t be a delay. He said the town would have to consider tax anticipation notes if the delay were more than 30 days.

Windham Town Administrator David Sullivan said his town sometimes has to borrow $1 million to $2 million to pay expenses until tax bills are paid. The town would probably have to borrow money again if there were a delay, he said.

“It definitely puts a kink in our financial picture if we don’t have taxes coming in until mid- or late December,” he said. “It definitely has an impact on us.”