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February 16. 2013 11:46PM

Manchester, Nashua try to see budget glass as half-full

Staff and correspondent reports

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Budget plan offers little more for cities, towns

Without poring over the figures, officials in Manchester and Nashua said they weren't too disappointed by the state budget proposed by Gov. Maggie Hassan last week.

Nashua Mayor Donnalee Lozeau said she understands the challenges of preparing a large budget.

"She is up against a lot," Lozeau said of the governor. "The issues that the state are facing are not easy ones. There are many challenges."

Still, she mentioned the 26 percent increase the city faced in retirement costs last year.

"It is hard to overcome a number like that," said Lozeau, adding she was hoping for a little more financial assistance in that area.

Once Lozeau completes her State of the City address on Tuesday, she said, she will have more time to review the governor's proposed numbers.

Manchester Mayor Ted Gatsas said he was pleased the governor is calling for a restoration of cuts to the Children In Need of Services (CHINS) program, which assists troubled young people.

Mark Goldberg, the governor's spokesman, said Hassan would "add back" $7.2 million over the two-year budget cycle to that program.

"We have students that really need help," said Gatsas. "There has to be a different path for them."

Gatsas said the city generally receives about 10 percent of the total state rooms and meals tax distribution and is currently receiving $4.9 million.

Adding $5 million would mean about another $500,000 to the city, said Gatsas.

He said he welcomes the modest increase, but the city could receive even more, he pointed out, if a Senate bill passes that would change how those funds are returned to the cities and towns. Currently, the funding - $58.8 million in fiscal year 2012 - is distributed on a per-capita basis. Under SB 121, 44 percent of the funding allocated would go back to the communities in which the taxes are raised, and 56 percent would be distributed based on population.

Gatsas said he was also glad to see the proposed restoration of $3 million to communities in FY15 for wastewater and drinking-water projects. "We do have some projects that are in place that it would help," he said.

But he was not happy to learn there's no funding in the governor's budget for the state's share of the retirement costs for municipal employees.

When the retirement system was created, there was a "gentlemen's agreement" that the state would pay 40 percent of the locals' share, recalled Gatsas, a former state Senate president. That share has been reduced over the years and now the state pays zero, he said. "It's like once we got you in, there's no way to get out, and we're not paying that portion anymore," he said.

But Gatsas said he'll withhold his reaction to the overall budget proposal until he has a chance to look at the details more closely. For now, he's concentrating on his own city budget preparations.

"I can only tell you that in my budget, I have no additional money to send to the state," he said.

Brian McCarthy, president of the Nashua Board of Aldermen, said he has not had a chance to review Hassan's budget in detail, but did speak in general terms about her recommendations and some suggested cuts.

McCarthy worries about Hassan's proposal to continue eliminating the 35 percent support for local retirement costs, which is a significant chunk of the city's budget.

"The retirement system is something the state established and it had a set of economic perimeters, and to come back and say the model doesn't work anymore isn't exactly fair to communities," said McCarthy, adding he hoped some of that funding would have been restored.

Meredith Selectman Carla Horne said she had not studied Hassan's budget in detail yet, but she was aware of some highlights.

"I'm glad she's putting money back into the mental health system, that's been underfunded for a while now," Horne said.

Staff Writers Shawne Wickham and John DiStaso and Correspondents Kim Houghton and Dan Seaufert contributed to this article.