A Message From the City Manager

Good Day Franklin!

 

There has been some talk on social media that the budget the City Council voted to pass on Monday, June 5, broke the tax cap.  It did not.  As you may recall, the statewide tax attributed to (and paid by) Franklin is our equalized portion of the $363M that is raised by the State every year. For FY2023, the State contributed a one-time $100m in surplus to the $363m statewide education tax. To break it down for the city - Franklin’s portion of the statewide property tax for tax year 2022 was $1,224,669 of which the city taxpayer paid $886,084 and the State paid $338,585. The tax cap is about last year’s taxes not who paid them. 

 

You can follow the tax cap for yourself by looking at the adopted budgets which are online (www.franklinnh.org). First, look at the City’s FY2023 budget (taxes paid in calendar 2022, July & Dec, support the City’s FY2023 budget) which can be found at this link:

 

The tax cap calculation can be found on page 71 of the document (page 82 of the pdf file) – you will see the $1,224,669 for statewide tax, if you scroll down, you will see the sources of funding for the city’s share of the statewide tax:  Franklin taxpayers paid $886,084, State paid $338,585 in one-time surplus monies.

 

Then, follow it forward to the FY2024 budget at this link:

 

The tax cap calculation can be found on page 73 of the document (page 84 of the pdf file) – you will see that the calculation starts off with the ending tax cap figure from FY2023 or $17,169,934. Statewide Education tax for 2023 (FY2024 City budget) totals $1,217,843. It is normal that the statewide property tax fluctuates from year to year as it is based on equalized valuation of all communities throughout the state. When you scroll down, the difference is the city taxpayer is the only funding source as in years past, the State is no longer a funding source. 

 

I’ve heard many questions but they all revolve around the same premises.

 

No, see above.

 

This one-time state payment has been discussed in many meetings as it is very confusing in the way it occurred. I think the State tried their best to ensure all taxpayers received a tax break for the year and this was the only mechanism for them to do so. For those communities with a tax cap, it made it even more confusing to follow. It would have been much easier if the State gave a one-time payment directly to the school district but the State would not be assured that the taxpayer would see relief in every community under this scenario.

 

No, the school district did receive the whole $1,224,669 in statewide property tax last year. The $886,084 came from the City in the usual manner; the $338,585 came from the State as part of the adequate education (also known as state funding or Claremont money) funding for the school year. The adequate education funding was increased (one-time) by the $338k.

 

I hope this helps to answer your questions. If you have more or need further clarification, please feel free to reach out. It may be helpful to have “revenue sources and how they go together” as the next topic in our Budget 101 series. Stay tuned and have a wonderful summer.

 

Judie