Publisher's Note: Just don't go there
By Jody Reese
Even when times are tough, it’s important to keep our word and look to the future.
Unfortunately, that’s not happening in Concord.
Gov. John Lynch is looking at the possibility of suspending meals and rooms tax rebates that go to pay off the debt on the Verizon Wireless Arena.
When Manchester looked to build the arena, it worked with the state to come up with a way to pay for it. Manchester has always generated much more in meals and rooms taxes than it gets back because the rebate formula is based on population and not any sort of revenue-sharing. It all seemed to make sense: the state owed Manchester and the arena would likely increase the amount of money spent on food and drink. So the state agreed to let Manchester use part of the meals and rooms rebates to pay for the bond, creating a revenue bond that enabled Manchester to get a good deal on the whole thing.
For Manchester the arena has thus far worked out. Debt payments have been accelerate as revenues have exceeded projections, but that could all come to a very quick and painful end if Lynch goes through with his plan.
I would be more understanding of Lynch’s position if the state hadn’t backed the arena financing and agreed to make those payments. But in this case, it was a deal. And as far as I’m concerned a deal is a deal.
Additionally, Lynch’s move would forever undermine public economic development projects. If you can’t expect the state government to keep its word, how can you move forward with any project? It would seriously stifle development. This bad economy isn’t going to last forever, but the way we deal with it may.
Both the state and Manchester governments find themselves in the red. Now it appears drastic measures need to be taken to bring spending in line with revenues, including layoffs.
My big question is how did Manchester and the state get revenue projections so wrong?
In both cases, I think budget shenanigans are to blame.
Don’t want to increase taxes? Just overestimate revenue and you can claim that taxes won’t rise. This is especially true in Manchester, where Mayor Frank Guinta loves a good headline in that other paper. He’s put a budget together that showed zero tax increases. He’s get a big headline proclaiming him a tax-cutter. In reality it was all a charade.
In fact, taxes increased because the budget numbers were bunk. When it came time to set the tax rate, we saw an increase, but not a big headline in that other paper. I wonder why?
In Guinta’s bait-and-switch budgets he ends up the anti-tax hero and the aldermen come off as tax-and-spenders. It’s a great way to run for higher office — not so good for the city.
Lynch hasn’t been much better. It shouldn’t come as any surprise that home sales would plummet or car buyers would finally get tired of buying new cars every year or so.
It’s just as important to be frugal in good times. It makes the tough times less tough.