While homeowners already have felt the effects of the ongoing turmoil in the housing market, municipal officials in New Hampshire and Maine say they have yet to see any major financial fallout.
But they are watching the situation closely.
In Franklin, Mayor Ken Merrifield anticipates that his city’s 2009-10 municipal budget will be more challenging to put together because of the general economic slow down that has lenders and developers leery.
Like Laconia, Franklin has a municipal spending cap that limits how much money the city can raise annually by taxes. Both of the caps include a component that lets the cities add the value of new construction to the amount of revenue that can be raised.
Merrifield worries that Franklin is not growing rapidly enough.
“I see that last night’s agenda for the [Franklin Planning Board] had one application,” he said. “Knowing the structure of the tax cap, it gives me some concern that we will be really restricted with the amount of money raised.”
Berwick, Maine, Town Manager Keith Trefethen is “holding my breath” as the daily news brings reports of yet more casualties in the meltdown of the subprime mortgage industry.
Asked whether Berwick has experienced any problems that he could directly attribute to Maine’s record level of foreclosures this year, he replied in the negative, sounding a little surprised.
“When you listen to the news and you hear the concerns, you would have thought we’d see a significant drop in maybe tax payments or an increase in mortgage foreclosures and we had a few of them but nothing of a significant extent at this point,” he said.
“I thought about it, but it’s in the back of my mind because it has not materialized yet.”
Trefethen acknowledged that, if there is a major decrease in property tax revenues, the selectmen and town “will have to make some tough choices as to whether to borrow money in anticipation of taxes or make significant reductions in cost if we don’t have the flow of cash that we need to operate.”
While the health of the housing market is a concern to him, Trefethen is more concerned about soaring…
