Published Date Written by Michael KitchLACONIA — Compensation and benefits of county employees is the major bone of contention in the tussle between the Belknap County Convention and the Belknap County Commission over the 2013 county budget — all triggered by a projected 8.9-percent in the county tax burden.
Last week the convention voted to freeze salaries and wages, require employees to bear the entire 7.3-percent increase in the cost of health insurance premiums and eliminate bonuses for unused sick time and longevity of service.
Afterwards, when the commissioners met, John Thomas (R-Belmont), who chairs the commission, regretted that the convention overlooked their efforts to control expenditures, especially personnel and operating costs, which they claim have not risen significantly for five years.
From 2009 to 2012, the number of full-time employees was reduced from 208 to 179, or by 14-percent, while the commission has proposed trimming another eight full-time positions in 2013. At the same time, the number of part-time employees rose from 26 to 46.
Meanwhile, since 2009 the cost of compensation and benefits is projected to rise by $971,597, or seven percent, from $13.9-million to $14.9-million which includes a 3-percent step raise along with increases in health insurance and retirement contributions budgeted in 2013. Wages are projected to rise by $397,230, or by 4 percent over the four years, while the cost of health insurance and retirement contributions are projected to increase by $618,625 and $243,318 respectively during the same period. These increases were offset by almost $290,000 in reductions to other payroll accounts.
Representatives Frank Tilton (R-Laconia) and Herb Vadney (R-Meredith) acknowledged the reduction in full-time employees, but said that any savings in personnel costs were more than offset by increased salaries, wages and benefits for the remaining employees.
"What is the point of cutting staff, if there are no savings?" Tilton asked.
The commissioners emphasize that revenues from sources other than property taxes have fallen by more than $1-million since 2009 while costs, particularly health insurance and retirement contributions, have risen. Nevertheless, total county appropriations increased only 4 percent, from $25.7-million in 2009 to $26.8-million in 2013. Proposed appropriations for 2013 are slightly less than those budgeted last year.
Since 2009 the commission has supplemented revenues with approximately $6.5 million from the fund balance, which accrues from excess revenues and unexpended appropriations, to stabilize the tax burden. As a result the amount to be raised by property taxes shrank every year between 2009 and 2012. Moreover, in 2010, 2011 and 2012 some $4-million in federal funds, distributed through the American Recovery and Reinvestment Act, was used to finance repairs and improvements to county buildings at no cost to taxpayers.
The commission has insisted that the increase in the county tax is not a function of increased expenditures but of decreased revenues, particularly the amount of fund balance applied to offset property taxes. Last year the commission used $3,750,000 of fund balance, but this year has proposed using only $2.1 million, with the difference more than enough to forestall any increase in the county tax burden.
Commissioners have argued that it is necessary to keep more money in the fund balance to keep the credit rating agencies happy. The county currently enjoys a AA bond rating.