NH Towns: Hard times trickle down

Note from the MCA: At the 11/13/2008 Selectmen meeting, Ed Charest reported on a session he attended at the recent NH Local Government Center annual conference about the economy and how it impacts NH. Mr. Charest indicated that NH overall was one of four states that probably will weather the recession far better than the other 46 states.  Hmmm... We respectfully disagree. There are many indicators in this state that point to very serious problems, such as 17% of NH single family homes having negative equity. As Betsey Patten state in the article "We all have to do some belt-tightening and take a deep breath." Read on  below....

By DAN TUOHY
New Hampshire Union Leader
Thursday, Nov. 13, 2008

MANCHESTER – Local government leaders heard the sobering assessment yesterday that the state's recession-teetering economy could hurt their revenues well into 2009.

Brian J. Gottlob, of the Dover-based PolEcon Research, said towns and cities may see greater property tax delinquencies and a choke-hold on many smaller revenue sources, such as new car registrations. Towns and cities can better cope with the downturn than state government, but Gottlob said local leaders may not think so come budget season and its prickly political decisions.

"You'll probably suffer more of the angst," he said at the New Hampshire Local Government Center's 67th annual conference.

Gottlob discussed the housing market, New Hampshire trends and the implications for local revenues.

The conference, "Local Government: Challenging Times, Creative Solutions," continues today and tomorrow at the Radisson Hotel Manchester. More than 650 municipal, school and county officials from around the state are attending. Topics include finance, land use, pension reform, and healthy, safe and secure school environments.

Local government officials are keenly aware of the challenges, said state Rep. Betsey Patten, R-Moultonborough, after listening to Gottlob's presentation. She sits on the House Municipal and County Government Committee and serves on her town's board of selectmen.

One of the first priorities, she said, is working to ensure the state does not shift any financial burdens to counties.

"We all have to do some belt-tightening and take a deep breath," Patten said.

While Gottlob says local government should not expect any help from the state, he anticipates the state looking to the federal government for financial assistance. Such a stimulus package for the states, now under discussion on Capitol Hill, could give New Hampshire a little relief.

Gottlob expects six more months of declining state revenues, with a turnaround starting possibly in late spring of 2009.

Though he expressed an optimism about New Hampshire weathering these challenging times, he said tightening credit, job losses and spiralling consumer confidence are all factors to watch in November and December.

Business access to bank credit has been hampered in New Hampshire, but the panic did not occur until October, he said.

New unemployment claims are approaching levels of the last two recessions, and there appears to be no slowing in terms of home mortgage foreclosures in New Hampshire, according to Gottlob.

He said 17 percent of New Hampshire's 144,500 single-family homes with mortgages have negative equity. Home prices have dropped about 15 percent since their peak and, though leveling out, market depreciation could continue if the state sees additional and significant job losses.

Compared to other states, there is not an especially high concentration of high-risk loans in New Hampshire, he said.

On the bright side, Gottlob said New Hampshire has kept up strong exports. And lower energy prices over the last three months of this year mean around $150 million in economic impact, he said.

New Hampshire's economy will depend on the next couple of months and how much exposure there is to national trends in the housing, construction, financial and automotive industries, according to Gottlob.

"We're really on a precipice now," he said.

HOME