Revision: Jan. 25, 2011, midnight
SB 2 – AS INTRODUCED
2011 SESSION
10/01
SENATE BILL 2
AN ACT relative to adoption of spending caps by municipalities.
SPONSORS: Sen. Boutin, Dist 16; Sen. Bradley, Dist 3; Sen. Bragdon, Dist 11; Sen. Gallus, Dist 1; Sen. Odell, Dist 8; Sen. Barnes, Jr., Dist 17; Sen. De Blois, Dist 18; Sen. Forsythe, Dist 4; Sen. Groen, Dist 6; Sen. Lambert, Dist 13; Sen. Sanborn, Dist 7; Sen. White, Dist 9; Rep. Infantine, Hills 13; Rep. Greazzo, Hills 17; Rep. Gagne, Hills 13; Rep. Gonzalez, Hills 17; Rep. W. Hutchinson, Hills 9
COMMITTEE: Public and Municipal Affairs
This bill allows cities and towns under a charter, and towns, school districts, and other political subdivisions under the municipal budget act to adopt an annual limit on increases to the municipal budget.
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Explanation: Matter added to current law appears in bold italics.
Matter removed from current law appears [in brackets and struckthrough.]
Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
11-0413
10/01
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Eleven
AN ACT relative to adoption of spending caps by municipalities.
Be it Enacted by the Senate and House of Representatives in General Court convened:
1 New Paragraph; City Charters; Vote. Amend RSA 49-C:12 by inserting after paragraph II the following new paragraph:
III. Notwithstanding any contrary provision in paragraph I, the adoption of an override threshold provision to a spending cap included in a charter pursuant to RSA 49-C:33, I(d) shall provide for a supermajority vote of the elected body to adopt the annual budget.
2 New Subparagraph; City Charters; Optional Provisions; Spending Cap Added. Amend RSA 49-C:33, I by inserting after subparagraph (c) the following new subparagraph:
(d) A limit on the annual increases to spending under the city budget adopted pursuant to RSA 49-C:23. Such spending cap shall provide for an override threshold on a vote to exceed the limit on annual increases which shall be by a supermajority as determined in the charter. A spending cap provision in the city charter may provide for specific exclusions for dedicated, enterprise, or self-supporting funds or accounts.
3 Town Charters; Optional Matters; Spending Cap. Amend RSA 49-D: 3, I(e) to read as follows:
(e) Other matters of local concern may be included in a charter including, but not limited to, conflict of interest provisions which shall be at least as strict as those established in the general laws, citizen powers of initiative, referendum and recall as described in RSA 49-C, [and] the adoption and periodic review of an administrative code, a merit personnel system, a purchasing system, and a town investment policy, and the adoption of a spending cap limiting the annual increases in spending under the town budget which shall include an override threshold on a vote to exceed the limit on annual increases which shall be by a supermajority as determined in the charter and provided that such spending cap may specifically exclude certain dedicated, enterprise, or self-supporting funds or accounts.
4 Municipal Budget Law; Application. Amend RSA 32:2 to read as follows:
32:2 Application. RSA 32:1-13, shall apply to all towns, school districts, cooperative school districts, village districts, and any other municipal entities, including those created pursuant to RSA 53-A or 53-B, which adopt their budgets at an annual meeting of their voters, except RSA 32:5-b, which shall apply only in those towns or districts adopting that section pursuant to RSA 32:5-c. RSA 32:14-23, concerning budget committees, shall apply only in those towns or districts adopting that section pursuant to RSA 32:14, I, and shall apply automatically in school districts or village districts located wholly within towns adopting that section.
5 New Sections; Local Spending Cap; Adoption of Local Spending Cap. Amend RSA 32 by inserting after section 5-a the following new sections:
32:5-b Local Spending Cap.
I. This section shall be known as the local spending cap act.
II. In this section, “inflation rate” means the Consumer Price Index for all Urban Consumers (CPI-U), Northeast urban, as determined by the Bureau of Labor Statistics, for the 12-month period ending the fifth month prior to the annual meeting of the local subdivision or, for local subdivisions that have adopted RSA 40:13, the fifth month prior to the second session of the annual meeting.
III. In any local subdivision that has adopted this section, the total fiscal year appropriation shall not exceed the total appropriation for the prior fiscal year by more than the spending cap authorized when this section was adopted unless the legislative body approves exceeding the spending cap by an affirmative vote of those present and voting greater than or equal to the override threshold authorized when this section was adopted. The “spending cap” shall be a fixed dollar amount, a fixed percent, or a percent derived from the inflation rate.
IV. Exceeding the local spending cap shall be valid only if the vote meeting the override threshold occurs on an article placed on the warrant of the annual meeting reading, “Shall we exceed the local spending cap?”
V. If the legislative body approves total appropriations greater than the amount allowed under this section but does not approve exceeding the spending cap, the governing body shall make the adjustments necessary to reduce the total appropriations to a level allowed by this section.
32:5-c Adoption of Local Spending Cap Act.
I. The provisions of RSA 32:5-b may be adopted by any local political subdivision of the state whose legislative body raises and appropriates funds through an annual meeting. A 3/5 majority of those voting on the question shall be required to adopt the provisions of RSA 32:5-b. Only votes in the affirmative or negative shall be included in the calculation of the 3/5 majority.
II. The local subdivision shall place the question on the warrant of the annual meeting under the procedures set out in RSA 39:3 or RSA 197:6, and the question shall be voted on by official ballot in accordance with the procedures established in RSA 669:19-29, RSA 670:5-7, and RSA 671:20-30, including all requirements pertaining to absentee voting, polling places, and polling hours.
III. A public hearing shall be held by the local governing body on the question at least 15 days, but not more than 30 days, before the question is to be voted on. In multi-town districts, a public hearing shall be held in each town embraced by the district, none of which shall be held on the same day. Notice of the hearing shall be posted in at least 2 public places in the town and at least 2 public places in each town of multi-town districts, and published in a newspaper of general circulation at least 7 days prior to the date of the hearing.
IV. The wording of the question shall be: “Shall we adopt the provisions of RSA 32:5-b, known as the local spending cap act, and limit annual spending increases to (spending cap), with (override threshold) vote required to exceed that limit?” The “spending cap” shall be a fixed dollar amount, a fixed percent or a percent derived from the inflation rate. The “override threshold” shall be no less than one-half and no more than two-thirds.
V. If a 3/5 majority of those voting on the question vote “yes,” RSA 32:5-b shall apply within the local subdivision for the fiscal year next following. Only votes in the affirmative or negative shall be included in the calculation of the 3/5 majority.
VI. Any local subdivision which has adopted RSA 32:5-b may consider rescinding its action in the manner described in paragraphs I through IV. The wording of the question shall be: “Shall we rescind the provisions of RSA 32:5-b, known as the local spending cap act, as adopted by the (local subdivision) on (date of adoption), so that there will no longer be a limit on annual spending increases?” A 3/5 majority of those voting on the question shall be required to rescind the provisions of this section, except in the case of repeal by charter enactment under RSA 49-D. Only votes in the affirmative or negative shall be included in the calculation of the 3/5 majority.
6 Municipal Budget Law; Limitation on 10 Percent Increase. Amend introductory paragraph of RSA 32:18 to read as follows:
32:18 Limitation of Appropriations. In any municipality electing this subdivision, or any district wholly within a town electing this subdivision, the total amount appropriated at any annual meeting shall not exceed by more than 10 percent the total amount recommended by the budget committee for such meeting. Provided, however, that in any town or district which has adopted the provisions of RSA 32:5-b, any increase which would exceed the spending cap may only be adopted according to the procedures for exceeding the spending cap in RSA 32:5-b. In official ballot referendum municipalities, the recommendation of the budget committee made for the first session of the meeting shall be used for determining the 10 percent limitation. These totals shall include appropriations contained in special warrant articles. Money may be raised and appropriated for purposes included in the budget or in the warrant and not recommended by the budget committee, but not to an amount which would increase the total appropriations by more than the 10 percent allowed under this paragraph. The 10 percent increase allowable under this paragraph shall be computed on the total amount recommended by the budget committee less that part of any appropriation item which constitutes fixed charges. Fixed charges shall include appropriations for:
7 Home Rule Municipal Charters; Preservation. Amend RSA 49-B:13 to read as follows:
49-B:13 Separability; Preservation.
I. The provisions of this chapter and of charters created under this chapter are separable. If any portion of this chapter, or of any charter adopted under the provisions of this chapter, or if the application of the chapter or such charter to any person or circumstance shall be invalid, the remainder of the chapter or such charter or the application of such invalid portions to other persons or circumstances shall not be affected by such invalidation.
II. All town and city charters which have been adopted, revised or amended; all charter commissions which have been properly established and elected; all elections properly held; and actions properly taken pursuant to such charters are hereby legalized, provided that such charters [at the time of their adoption were] are not contrary to the general laws and constitution of the state.
III. RSA 32 shall not apply to a municipality adopting, revising, or amending a charter under RSA 49-C or RSA 49-D unless that municipality adopts a budgetary town meeting, official ballot town meeting, an official ballot town council, or representative town meeting pursuant to RSA 49-D:3, I-a, II, II-a and III. Except that a municipality may adopt a spending cap as provided in RSA 49-C:33, I(d) or 49-D:3, I(e), notwithstanding the provisions of RSA 32:5-b and RSA 32:5-c.
8 Effective Date. This act shall take effect 60 days after its passage.