Town debates its fate

By PATRICK MEIGHAN, Telegraph Staff
Published: Sunday, Apr. 16, 2006

MERRIMACK - Right or wrong, some residents have described the ramifications of Tuesday's voting in biblical terms.

The question remains which books of the Bible best fit what Merrimack faces.

Will it be the Genesis of a new era of tax relief or the Exodus of town staff in the wake of budget cuts and staff reductions?

Will the new board of selectmen - soon to become the town council - offer Psalms of comfort to the tax-oppressed or will draconian budget cuts create an apocalypse, if not now, then later?

"Last night was a revolt, there's no other word for it," Selectman Dave McCray said the day after the election, in which a grass-roots, anti-tax group aligned with McCray won control of the board of selectmen, cut town spending by $1.5 million and dissolved a 10-year savings fund for a new library.

"It's going to be wonderful for the taxpayers," said Jennifer Twardosky, cofounder of the grass-roots group called Merrimack Cares and a newly elected budget committee member.

Others aren't so sure.

"I see some very, very difficult times ahead for this community. I feel sorry for this community," said Patrick McGrath, former school board member and unsuccessful candidate for selectman.

"This is going to have some very, very deep ramifications for many years. Merrimack is going to have a downward spiral."

What's clear in the short term is that the vote will result in an average reduction of about $400 or more per household when tax bills are mailed out next fall.

Here's why:

Last year, the board of selectmen returned to residents for tax relief $500,000 from a general fund surplus of $3.3 million. That left a balance of $2.8 million.

The majority of the new board - McCray and newly elected Selectmen Betty Spence and Mike Malzone - have promised to honor a 2002 advisory ballot question to return to taxpayers any general fund surplus over $2 million.

Thus, residents will get back an additional $800,000 from the surplus this year. Add to that $450,000 of anticipated savings from health insurance expected to remain in the budget at the end of the 2006 fiscal year on June 30.

Plus, there's the $2.5 million from the library fund to add to the pot, for a total of $3.75 million of tax relief.

The trouble is, that's a one-year windfall, because the surplus will be gone, as will the library savings. The new board's mettle will be tested in 2007 and beyond as it works to find ways to hold the line on spending and taxes.

Some people expect a tax spike to hit in late 2007 of 20 percent or more. That occurred in 2003, when tax bills rose an average of 19 percent the year after a substantial surplus had been used for tax relief.

Because of that tax spike, and with the advice of the officials from the state Department of Revenue Administration, the majority of the former board of selectmen voted to retain the surplus, a move that fueled anger among many residents and affected last week's voting.

The town side

Starting this week, the board must debate where to cut $1.5 million from town spending. That was the amount taken out of the proposed 2006-07 budget at the March 7 deliberative session and approved by voters Tuesday.

The new $25,180,319 budget represents a reduction of 3 percent over current spending. However, when inflationary increases in utilities and fuel are factored in, the new budget is more like 5.6 percent below current spending, town officials say.

In outlining potential cuts, the town manager suggested layoffs and reductions in services are possible. The majority of the new board said fat can be cut from the budget without necessitating layoffs, but no one yet has adequately pointed to $1.5 million in fat.

McCray, in board deliberations in recent months, suggested about $300,000 in cuts, noted Dick Hinch, the former board chairman who lost his bid for re-election.

In three months, the town's governing board will have two more heads to put together to figure out how to hold the line on spending.

That's because voters on Tuesday approved a town charter, which, among other things, changes the five-member board of selectmen to a seven-member town council.

The two additional members will be picked in a June 13 special election. In the meantime, the selectmen can appoint a member to serve out the term of Chuck Mower, who resigned from the board Thursday.

The charter will take effect July 1.

Regardless of what happens from here, the reason why the vote went the way it did Tuesday, at least on the town's side, is clear.

"Taxes, taxes, taxes," McCray said.

What happened can be broken down into two steps, he said.

Part A was that people were fed up with taxes and equally fed up that the board hadn't honored the 2002 ballot question to return the general fund surplus above $2 million to voters for tax relief, McCray said.

Part B, McCray said, was that "Merrimack Cares provided an organized effort for people to channel their anger."

He added, "Merrimack Cares was born the night they didn't return the surplus over $2 million. . . . It gave the taxpayers a place to go for hope."

"The other side was out of touch" and had a "let them eat cake" attitude toward residents struggling to make ends meet, McCray said.

The school side

With the school district vote in the election, however, the story is a little more complex.

The $57.3 million district budget recommended by the school board and budget bommittee passed, as did all warrant articles.

Those articles included $650,000 for a fire sprinkler system at the Mastricola schools and renovations at Mastricola Upper Elementary School, a $146,200 proposal to update technology at Merrimack High School and a three-year contract for school support staff, with an estimated cost in salaries and benefits of $279,195 for 2006-07.

However, while voters ousted Ken Coleman, the longtime board chairman, only one of two candidates endorsed by the anti-tax group won school board seats.

That was Merrimack Cares cofounder Jennifer Thornton. The other candidate elected was Jody Vaillancourt, a longtime school volunteer who Coleman had endorsed.

"The school board as far as governance will be in fairly good shape," Coleman said in assessing the election.

Coleman said he knows Vaillancourt well and she'll make an excellent school board member.

He added that he doesn't know Thornton as well, and has met her only once. But based on that meeting, Coleman said, "I think she will also become a very good school board member."

Beyond that, voters sent a mixed message, Coleman said.

"The voters have presented almost an interesting puzzle by their votes," he said. "Clearly, there was tax anger and a mood for change."

But at the same time, the school budget and warrant articles passed, he noted.

Voters indicated on the school side they want to pay staff fairly and don't want to cut services to students, but they also "want drastic tax relief," he said.

Next year, it will cost $1.1 million to fund the support staff contract and the teachers contract approved last year - and it will be hard to pay those while reducing school spending, Coleman said.

That contradiction poses a difficult puzzle.

"Merrimack's got a structural tax problem," Coleman said.

The only possible solution, barring a dramatic change in the tax base, is if Merrimack "gets back more of our share of state aid," Coleman said.

"Regardless of spending, Merrimack has an unfair tax burden," he said, noting that suburban towns such as Merrimack, Hudson and Londonderry are getting hurt by the state's education funding formula.

"Merrimack has about the average per-pupil spending but above-average taxes," he said.

Budget committee shakeup

One of the election's quirks was that while four members - all endorsed by Merrimack Cares - were elected to the budget bommittee, the new charter eliminates the committee from playing a role in the town side of government.

However, a warrant article passed on the school side retains the budget bommittee to oversee the school budget.

Before the charter passed, the budget committee questioned town, school and Merrimack Village District water utility spending. Now, the committee only oversees school spending.

Additionally, the election may result in the committee having a fiscally conservative majority. The four new members - Twardosky, Chris Ager, Rodney Buckley and Jack Rothman - join conservative members Rick Barnes and Mike Thompson.

Twardosky said she feels some of the other members of the committee might align with her group to give them control of the 15-member committee.

"I think we'll be able to ask some good questions and do some good research" on school spending, Twardosky said. "I want a budget for dummies. That's the first thing I'm going to ask for. I will question every single dime that goes through that school."

She added, "We need to pay our teachers well. We want quality teachers to stay here with us."

But the committee will look to save money in other areas, perhaps trying out ideas such as pooling with other towns to buy textbooks.

"I'm really excited to see how creative the town can get," Twardosky said.

Future shock?

Despite the optimistic picture painted by Merrimack Cares, others in town think the budget can't be chopped by $1.5 million and the line held on spending without destroying Merrimack's quality of life.

They see the election as a perhaps irrevocable setback for the town - and the dissolution of the library fund as a waste of 10 years of savings.

The election brought to office candidates who are "hell-bent on cutting taxes who don't understand the process," McGrath said.

"The quality of life in Merrimack we have enjoyed for the past 10-12 years is going to diminish greatly," he said.

Referring to the period following what he called the school board battles of the 1990s, McGrath said Merrimack "seemed well on the road to recovery." Residents supported budgets that brought teachers' pay up to par and improved facilities, he said.

As a result of that recovery, Merrimack gained status as one of the best towns of its size in the nation, as rated by Money magazine. McGrath now sees those advances unraveling as a result of Tuesday's vote.

So does Carolyn Whitlock, whose term on the board of selectmen expired Friday. A former school board member also, Whitlock didn't run for re-election.

"There are an awful lot of people who bought homes they thought they could afford at the time and didn't take into consideration that their taxes would rise as the value of their homes rose. I don't understand that mindset," Whitlock said.

Whitlock has been involved in town service for 22 years and has seen a lot of changes. The most extreme changes were in the mid-'90s and now, she said.

"We are going to see a mass exodus of our most experienced employees," she said.

Short term, she doesn't expect to see many department heads leaving, but that will happen down the road, she said.

"I think this is going to have a profound effect on Merrimack," Whitlock said.

Patrick Meighan can be reached at 594-6518 or