Municipalities are toiling away at their budgets right now. It seems that all of the government boards in charge of these budgets are desperate to either hold the tax rate increase to a minimum or even reduce it. I have repeatedly heard it stated by elected officials and managers that they have two choices: either allow the tax rate to rise or cut services in order to reduce the rise. No one seems to take inflation into account nor does anyone seem to have any ideas for increasing the size and/or value of the tax base.

Sullivan County takes in $1.5 million less each year in taxes than it needs to meet its expenses. This is called a structural deficit. The county has other income in the form of Medicaid reimbursements and other state and federal sources, and these are put into an undesignated fund balance. During the Great Recession (2008-2011) the county budget was sometimes in negative territory, and following this hairy period, it built up the fund balance. The county has been drawing from that balance to make up the difference between its expenses and its tax revenue. Over time that balance has been in decline and is now in danger of going into the red again, if the deficit is not addressed. In the short term this means raising taxes.

The cumulative inflation rate since 2009 is 19.4%, which means that you pay 19.4% more now than you did for the same thing in 2009. The gallon of milk that cost $3 in 2009 now costs $3.52. (Except that it doesn’t increase like that because government price controls play havoc with the cost of milk.) But let’s pick a commodity more germane to governments. If inflation were the only thing to affect the cost of concrete, which presently costs about $90 per cubic yard, then it would have cost only about $72.50 in 2009. The cost of health insurance has been increasing at a rate far exceeding the rate of inflation, and government employees do receive health insurance. So, you can see how a government that wanted to build anything or employ anyone would see its costs steadily rising over the last 10 years by at least the rate of inflation.

And so, to keep up with these rising costs, a government would have to increase its revenue just to stay even, right? Well, no. Apparently you can always defer building things (or repairing them), and you can always reduce the size of your staff (or at least pare back their benefit packages). As a consequence, you will have a county, city, or town with dilapidated roads and bridges, with a lot of vacant positions on its payroll and employees who talk about the days when their health insurance was better.

The obvious short-term solution is to raise taxes so that they keep up with inflation, at least. But can property owners afford to pay these higher taxes? The general consensus is “No.” So, what is the real long-term solution? To increase the value of the tax base.

In a free market, laissez-faire economy you let the business community take care of this. People with capital make investments, build and improve real property increasing its value, and they employ people so that they can turn around and build and improve their real property and increase its value. Soon, the theory goes, people will hear of this place where there are opportunities and they will move there, increase the population, build homes and businesses in addition to the ones already there, and voila, you will have a bigger, more valuable tax base, and tax rates can go down because the government will get all the revenue it needs by taxing commercial buildings full of equipment worth tens of millions of dollars and houses worth hundreds of thousands.

Is this free market, laissez-faire approach working in Sullivan County? No. It is not. For example, the renovation of the Goddard Block on Pleasant Street in Claremont is being done with government incentives. The clean up of the Monadnock Mills buildings was funded in part by federal Community Development Block Grants and federal tax credits. The market for CanAm Bridges consists almost entirely of largely federal and state funded projects.

In order for a local government to be effective it has to acknowledge that it is in a state that is in a country. While this state might not have as much to offer as some others, simply because of a time-honored tradition of minimal government, the United States government has a lot to offer, but you nearly always have to ask for it.

Mayor Charlene Lovett has been tireless in her pursuit of state help for Claremont in this budget cycle and netted hundreds of thousands in state support. This is extremely commendable but seems to have been her personal initiative, and it must be said that Claremont needs millions and millions of dollars of support in order to rebuild its tax base. Ryan McNutt, the former city manager, was a constant writer of grant proposals, but he was fired after just one year here, apparently for being a bit irascible. (They knew he was from Massachusetts when they hired him, right?)

I have mentioned Sullivan County and Claremont, but many of the local governments (and schools) are in this quandary. Many of them are now in the position of being on the verge of being out of compliance with federal and state statutes and/or compromising the quality of their services and infrastructure. This creates a positive feedback cycle by which all conditions become progressively worse. People paying large amounts of money in taxes while they are surrounded by crumbling roads, abandoned buildings, empty storefronts, and chronic drug problems are bound to become, shall we say, disenchanted.

If you don’t want to pay more and more in taxes, please encourage your local governments to seek aid from larger government entities. Waiting for a billionaire guardian angel to swoop in is not a good alternative strategy, but a lot of these government grants require some form of matching, so a few millionaires would be helpful.

Bill Chaisson is the editor of the Eagle Times.