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Counties and municipal groups warn proposed SHIELD Act would sharply curtail local borrowing
Summary
Representative McFarland’s bill would limit municipal, county and school district bonding and require voter approval except in narrow emergencies. County administrators and the New Hampshire Municipal Association said the changes would be unworkable, could jeopardize compliance with federal/state mandates, and shift costs to taxpayers.
Representative McFarland introduced House Bill 1427, the SHIELD Act, arguing the bill would encourage fiscal restraint and reserve borrowing for emergencies or voter-approved major projects. He told the committee the bill includes reasonable exceptions for emergencies, public safety and essential infrastructure and a transition period for communities to adjust their capital plans.
County and municipal witnesses strongly opposed the bill. Cheshire County officials and the New Hampshire Municipal Association said existing RSA Chapter 33 already provides conservative statutory controls for public borrowing, including debt limits, required hearings and emergency borrowing provisions. Cheshire County’s testimony said county borrowing already requires a 2/3 vote of the county delegation and statutory public hearings prior to issuance.
Bridal Deshaies, representing the New Hampshire Municipal Association, warned the bill’s near-total ban on borrowing after January 1, 2027 would create practical problems, particularly for counties with mandated facilities such as nursing homes or jails. Deshaies also pointed to statutory limits on how much a county may set aside in capital reserves, which could make long-term planning under the proposed law infeasible.
Representatives and witnesses debated whether the bill’s focus on saving rather than borrowing would spare taxpayers long-term interest costs but could delay necessary projects or raise short-term expenses by forcing shorter bond terms. Sponsors argued recent practice has produced excessive borrowing and that increasing voter involvement would impose discipline; opponents said the proposal would hamstring legally required activities and emergency responses.
The committee collected testimony from multiple county administrators and municipal finance officers, the county delegation process was described in detail, and NHMA urged additional amendments to preserve legally mandated borrowing paths and to clarify emergency definitions before any committee vote.
