Dover residents have a lot to think about as the Nov. 6 municipal election approaches. Not only do they have 18 city council candidates and four mayoral candidates to choose from, but they will vote on a proposed amendment to institute a contentious tax cap. Spearheaded by Ward 3 City Councilor David Scott, the amendment would essentially limit annual tax increases to the rate of inflation. The wording is identical to an amendment adopted in Laconia two years ago, limiting tax increases to the annual change in the National Urban Consumer Price Index.

According to Scott, most Dover citizens strongly support the amendment. He feels the city must take serious measures to curb excessive spending.

“I came to Dover seven years ago, and since that time, the spending has gotten completely out of control,” Scott said. Over the last four years, spending has increased by 28 percent, he said, while the city’s debt has gone up by 55 percent. (City Manager Mike Joyal disputes these numbers, as will be shown later.) “That is a formula for bankruptcy if it were a private company,” Scott said.

But others, including Dover Mayor Scott Myers, have grave concerns about the proposal. Myers said he needs more information about the possible impacts of the tax cap before he takes an official position, but he worries that it would leave the city unable to fund many of its capital improvement projects and would force councilors to slash the city’s operating budget. He also worries that citizens could ultimately be forced to pay even higher taxes if important projects are pushed back because of the cap.

During a public forum held on Oct. 9, guests spoke for and against the proposal. A panel of speakers convened by Scott included a business owner and teacher from Laconia, as well as the mayor and former mayor of Franklin, where a similar tax cap has been in place since the 1990s. According to Scott, real estate values in Franklin have increased at a higher rate than anywhere else in the state since the city adopted the tax cap.

Rising taxes in Dover have forced many property owners—both elderly residents and working families—to consider selling their property, Scott said. As expenses increase, real estate values tend to go down, an inverse relationship that “even the early Egyptians understood,” Scott said.

Myers said the absence of a sales or income tax in New Hampshire has forced communities to rely on property taxes. “The ones who tend to get hurt worst in that system tend to be young families and the elderly,” he said.

According to City Manager Mike Joyal, taxpayer supported spending has increased by an average of approximately 6 percent in each of the last five years, while general fund debt levels have climbed by an average of about 7 percent for the city and 4.5 percent for schools. The average residential homeowner’s property tax bill has increased by an average of just over 6 percent in each of the last five years, according to Joyal. The average residential home value has grown from about $96,000 to $289,000 over the last 10 years, according to the 2007 “State of the City” report.

Regardless of the numbers, Scott noted that Laconia has successfully implemented a tax cap without laying off city employees, and the city recently approved funding to construct a new school.

Ward 2 City Councilor Douglas DeDe agrees that the tax cap has been beneficial for Franklin and Laconia. “They were very favorably disposed toward it,” he said. “However, Franklin isn’t Dover and Dover isn’t Franklin, and Laconia isn’t Dover and Dover isn’t Laconia.”

DeDe worries that instituting a tax cap in Dover could handcuff the City Council on necessary spending. The amendment does not take into account a number of required expenditures that fall outside the CPI, such as an approximately $750,000 retirement bill that must be spent. He also noted that the city receives a bill from Strafford County based on assessed valuation, and Dover has the highest assessed valuation in the county. “Depending on what some of those exterior things are, (the tax cap) could have an impact,” DeDe said.

Scott said he could not think of any negative consequences of adopting the tax cap. He noted that the proposed amendment includes a safety net: The tax cap can be overridden if six out of nine councilors vote to override it. The oft beleaguered councilor denies accusations that he is against all city spending.

“That’s ridiculous. We know that city spending has got to go up, but I don’t think it should go up faster than the rate of inflation,” he said.

Myers scheduled a second forum for the evening of Tuesday, Oct. 16, in which he called upon City Attorney Allan Krans to apply the proposed cap to the council’s current budget. Using the budget the council approved last year, in which the city assumed $126 million in new construction costs, and applying a 2.5 percent CPI, the tax cap would have forced councilors to cut approximately $1 million from the city budget and about $800,000 from the school budget, Myers said.

Although DeDe has not taken an official stance for or against the amendment, he has promised not to vote to override the cap if it is approved by voters. “Whatever the public decides, that’s what I will be living by,” DeDe said. “My take on it is that it will pass by a very wide margin.”

Like DeDe, Myers has vowed to live within the confines of the tax cap if it passes. “If the voters pass the tax cap and if I am reelected as mayor, I will not vote to override the tax cap for at least the first year,” he said.
 
The Greater Dover Chamber of Commerce will host a series of forums with council, mayoral and school board candidates on Monday, Oct. 29 and Wednesday, Oct. 31 in the City Council chambers. The forums will be broadcast live on Channel 22. Residents can submit candidate questions by visiting www.dovernh.org.