The Corona Virus pandemic has created new normal and unprecedented actions at all levels of government. As we maintain our social distancing and take all the precautions advised by our medical experts and await the time when this crisis will come to an end, many of us are experiencing unexpected events which will impact our present and future financial circumstances. Currently with a $7 trillion decline in the stock market, there has been a sharp increase in margin calls, deferrals of mortgage, credit card and other monthly expense payments, contraction of spending choices, increased unemployment and heightened anxiety at all levels. The coming Government subsidies only will last for a finite period of time (Grants or Super steroidal unemployment checks) and then what??? More U.S. debt that may affect the entitlement programs like Social security, Medicare /Medicaid and food stamps or an increase in Government taxes or both! We all have to hunker down together until the pandemic finishes its course and try and keep a positive attitude and know that there will be an end of this scourge. It may be in a month or two or longer as that depends on how well we self-isolate and flatten the rate of infections. We believe the “wave” has not hit us yet! There is a good chance that this entire school year is affected and the beginning of next year as well (as one new infection in one of our schools could cause a shutdown)! The Federal government cannot finance us for the entire Pandemic, we the people have to figure it out!
What about the impact to the Town we live in? If 10% of the tax paying population are unable to pay their real estate taxes in June, it will impact revenues, in our estimation by $6 million, which could trigger the emergency use of our Undesignated Fund Balance (which was used very liberally to finance 5 articles in the last election, which we opposed). If the number is greater than 10% the results could be very troubling!
In addition to the possible tax shortfall, what about the Towns other revenues, like the beach parking, which brings in around $400,000 /year. This revenue mitigates the tax impact that otherwise the Town Budget would require of us had we not had it? What other Town revenues might be impacted?? Will the returns on the trust funds remain the same?
We believe the Selectmen and School Boards need to anticipate and immediately develop and prepare plans to deal with a very possible and unprecedented shortfall in tax collections in June. We think some of these steps include the deferral of appropriate purchases and labor related expenses, non-essential construction projects, asset purchases, overtime and frankly doing what we as individuals are having to do. It may make sense to line up commitments from banks for lines of credit associated with an unprecedentedly high level of tax anticipation notes. “Coordination” between the entities is a must in our opinion. Failure to take steps immediately could put the Town in a position of having to take a more aggressive, less compassionate approach to tax collections than in the past; borrow more and even look perhaps at the trust funds as to their possibilities. . Perhaps the State and Governor can help in this area as well with some relaxation of their requirements. We realize that the Town and Schools are addressing the functions of Government and Education today but is proper planning occurring to the issues stated above as we do not see any objective evidence of this required advanced planning and “what if” scenarios!
Additionally, what about Hampton Beach proper? What if the virus is still with us for 4-5 months from now and the businesses are not able to open? What impact is that going to have? Who is thinking about that possibility? It all needs to be addressed and not at the last minute!. The State itself will take a big hit with the loss of rooms and meals tax and parking revenues so how might that affect Hampton? It’s not business as usual folks!. Who’s working those issues and “what if” possibilities?
Now to further amplify, the schools (SAU90 AND SAU21 remote learning programs are likely to continue through this school year and maybe into the next year as well. How are the Towns and Regional High school teachers affected? 2019 /2020 budgeted lines items need to be carefully re-scrutinized to keep costs to a minimum in this period through June 30, 2020 (to keep the Towns required dispersal of Educational tax money to a minimum). The game has changed!!!! The approved 2020 /2021 budget becomes effective on July 1st and then we ask is that going to be readdressed in light of what might be happening and what has been learned via remote learning? Are non-essential line items going to be readdressed as well, or again is it business as usual? It’s better to be ready than late!!
This is not dooms-day planning but advanced planning using “what if” scenarios.
We just do not have the confidence of what we have seen in the past. Government and Municipalities at all levels know how to spend extremely well but when it comes cost savings efforts and ideas, the voices tend to silent.
~~Norman Silberdick & Jerry Znoj, Rational Taxpayers of Hampton