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The state now owns Hampstead Hospital. So it’s paying the town for losses to tax revenue

A sign that reads Hampstead Hospital.
Alli Fam / NHPR
A one-time payment to offset tax revenue losses has been approved for the 2023 fiscal year. There are plans to include this type of support in the state’s budget going forward.

The town of Hampstead will get nearly $140,000 from the state in the upcoming fiscal year, money intended to offset losses in tax revenue now that the state has acquired the formerly privately owned Hampstead Hospital. The funding was approved by the state’s executive council on Tuesday.

Last fall, the state announced plans to purchase Hampstead Hospital in the hopes of expanding emergency psychiatric care for children and youth.

The financial consequences of that acquisition meant an estimated revenue loss of $160,000 for the town of Hampstead, according to Sean Murphy, chairman of Hampstead board of selectman. That’s because, unlike private companies, the state isn’t required to pay property taxes on land it owns.

“The payment is set to cover us for the current tax year, which is good,” said Murphy.

He is still working with politicians and state officials to negotiate a longer-term payment.

The funding is clearly described as a “one-time” payment, but in the same funding request, the Department of Health and Human Services expresses its intent to work with the Legislature next year to address the tax impact through the budget process.

This type of voluntary payment, also known as a PILOT or “payment in lieu of taxes,” has limited precedent in New Hampshire. Each year, the state gives $175,000 to the City of Concord, the state capital and home to numerous government buildings, to support fire services. But according to the Department of Administrative Services, no other such payments are made to municipalities that may be home to other state-owned properties.

Murphy is meeting soon with Health and Human Services Commissioner Lori Shibinette, politicians and local first responders. They plan to also discuss services the town will maintain in conjunction with the Hampstead Hospital, like fire services and law enforcement.

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