Articles 18, 20 and 26 if approved, will draw upon the Unassigned Fund Balance for a cost reduction to taxpayers in the current year of $1,154,500 – roughly $36.00 savings for a home valued at $400,000. This is in addition to $2 million from the Unassigned Fund Balance that was used to lower the tax revenue needed to meet general budgetary requirements.
The Unassigned Fund Balance consists of excess funding that comes from either more revenues than expected (Example: the Rooms and Meals Tax distribution from the State; or higher than anticipated reveneus from Trust Funds)) OR from lower than anticipated costs (example an expense approved by the taxpayers that ends up not costing as much as expected, or the project is not pursued.)
There is a required minimum funding that a municipality needs in the Unassigned Fund. The New Hampshire Department of Revenue Administration (DRA) recommends 5%-17% of the municipality’s overall budget be held as “unassigned” to cover emergencies and to mitigate the fluctuations in the timing of revenue received and outlays required. The top end of this exigency translates to over $5 million for Hampton. Even with the hold-back requirements, there is excess funding to dedicate to projects the Town Departments feel are needed. If the voters approve these expenditures and if they were NOT being funded by the Unassigned Fund Balance, it would require additional taxation.
If all the Articles that call upon the Unassigned Fund Balance are passed, it would reduce the Unassigned Fund by $1.1 million, which would leave adequate backup resources, and would still allow the town to qualify for a lower bond rate for Warrant Articles that are bond-funded.
When you see “no tax impact in 2024” associated with an Article that uses the Unassigned Fund Balance, it means there is no need to raise new tax revenue to cover the proposed costs, because the money was previously raised, earned or conserved. However, the voters have the ability to approve or reject the proposed use of those funds.