Bill to strengthen municipal spending & tax caps clears Senate

In 2019, the state Supreme Court ruled that Nashua’s decades-old spending cap was unenforceable because it wasn’t complaint with a state law that was passed years after the cap was created. A bill approved in the state Senate on March 18 would restore Nashua’s cap, clarify that all such caps are fully enforceable, and require a supermajority vote to exclude any budget items from a tax or spending cap.

Nashua’s spending cap was approved by voters in 1993. In 2017, aldermen voted to exempt the then-$8.1 million wastewater treatment fund from the city budget. That put the fund outside the spending cap, which removed it from any spending constraint, while also creating a gap in the budget that could be filled with new spending.

Former Alderman Fred Teeboom sued the city over the move. In 2019, the state Supreme Court ruled in his case that the spending cap, which lacked an override provision required by state law, was unenforceable.

Since then, Nashua’s spending cap has been legally void. Senate Bill 52, introduced by Sen. Kevin Avard, R-Nashua, would reinstate Nashua’s cap by clarifying that all spending caps are fully enforceable.

It also would address the practice, not unique to Nashua, of removing some spending items from municipal budgets, which makes them no longer subject to voter-approved tax or spending limits.

State law already requires that tax or spending caps have an override provision, and that an override can occur only with a supermajority vote. SB 52 would expand the supermajority requirement to cover votes that exclude spending items from cap coverage, such as Nashua’s vote to remove the wastewater treatment fund from the budget. (That vote was one shy of a supermajority.)

SB 52 passed the Senate 14-10 along party lines, Republicans in favor and Democrats opposed, and is headed to the House.