PART II. THE FISCAL SYSTEM 



A description of the fiscal system involves an explanation of the 

 obtaining and spending of public money and a description of the ad- 

 ministrative controls surrounding the receipt and expenditure of such 

 funds. We are concerned here principally with an account of the 

 sources of revenue, of the purposes of expenditures, and of the ad- 

 ministrative arrangements whereby local units of government in New 

 Hampshire safeguard their financial affairs. 



Fiscal systems vary among the states. The different sources 

 of revenue and the relative significance of each source are influenced 

 by the constitution and statute law peculiar to the individual state. 

 Types of expenditures are largely the result of an allocation of func- 

 tions among the levels of local government and the demands of the 

 people for various governmental services. Administrative arrange- 

 ments and local practices are likewise controlled by constitutional or 

 statutory provisions, or both. They vary considerably among the 

 local units at a given level as a result, not only of the flexibility pro- 

 vided by home rule, but also as a result of differences in interpreta- 

 tions and in the concepts of local officials. 



There is considerable variation among the units of local govern- 

 ment in New Hampshire with respect to fiscal years. With the ex- 

 ception of the highway department, the state departments close their 

 years on June 30. The state highway department has adopted for its 

 fiscal year the period ending January 31, which corresponds with the 

 fiscal year of towns and precincts. The most logical fiscal year is 

 that of school districts, which closes on June 30. This is immediately 

 after schools are closed for the summer, and it coincides with that of 

 the state department of education. The ten counties adopt the calen- 

 dar year and the eleven cities close their year according to their in- 

 dividual charters, the earliest on November 30 and the latest on Feb- 

 ruary 28. Seven of the eleven cities, however, have adopted the calen- 

 dar year. 



In order to understand the fiscal system of local units of govern- 

 ment in New Hampshire, it should be remembered that the property 

 tax is the major source of revenue and that the actual administration 

 of the property tax is a function of the town. Town officers are re- 

 sponsible for appraising the property and for levying and collecting 

 the tax, even though part of the revenue thus obtained is paid to other 

 units of government. Thus the property tax includes the state direct 

 tax. (until 1939), -'•' county taxes, school district taxes, and village dis- 

 trict taxes. Taxes collected by the town for other local units repre- 

 sent the net appropriations of those units. Estimated income from 

 all other sources is deducted from gross appropriations. Likewise, 

 the town tax is a net figure and represents only the amount of money 

 to be obtained from the property tax after all other sources of income 

 are deducted. 



-'■ Ti.e tobacco tax was substituted for the state direct tax by legislative action in 1939. 



