Does New Hampshire love the property tax?

During the 2018 campaign, great solutions were proposed on issues to boost our economy, provide more affordable housing, deal with the opioid epidemic, and better support education, to name a few.

Of course, underlying all this is the question of funding. Taxing and spending — it’s what governments do. Will the new majority of Democrats in the Legislature come forward with bold proposals for social programs or education funding, infrastructure and healthcare? Will those be met by the re-elected governor with resistance to new spending and strict adherence to “The Pledge”? (Keep in mind that all the taxes in NH were put in place by Republicans.)

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A good government taxes fairly and spends pragmatically. It will invest in the things that make the state great: good schools for all its students, and good roads, broadband, energy sources, and social services for all its residents, regardless of geographic location.

Most importantly, a good government will raise taxes sufficient to do the job of funding its functions, and will raise those taxes in a manner that asks all persons to pay their fair share, and not overtax any one segment of the population or economy. 

Our state is not doing this now.

State government in Concord has been holding to its tax-aversion policies, upholding “The Pledge” for no new taxes, and cutting existing ones. Past funding to towns and school districts has dwindled or been extinguished, increasing the load on property taxes for education, school building, and infrastructure.

Property taxes are more that two-thirds of all tax revenue in New Hampshire. Business pays more in commercial property taxes than it does in direct business profit and enterprise taxes.

Most of our state taxes are either fees or taxes levied at the point of an economic transaction. If you go out to dinner or start a business, you know what your tax will be before you start, and it will be proportional to what you do.

Not the property tax. Three factors decide your tax bill: total budget of the town, county and school district; total assessed valuation of your town; and the particular assessed value of your property. None of those factors is based on your ability to pay. You can vote for or against a town or school budget, but due to the other factors, your taxes may go down or, mostly, up. And those rates are all over the map. 

Over time, as budgets and property values grow, there is an increasing gap with ability to pay.

In 2006, the town of Hollis released a report, “The Cost of Growth,” an examination of the effect of population growth on its property taxes. The committee surveyed residents of the town, with more that half of all households responding to the key question: What portion of your household income goes to property taxes?

The largest group, 465 households, paid between 5 percent and 10 percent property taxes. The median was at about 8 percent. Below that bracket, 185 paid between 1 and 4.9 percent; above, 270 paid 10 to 15 percent. In total, though, 490 households paid more than 10 percent of income in property taxes.

But the extremes are the most telling: some 25 households paid less than 1 percent, while 28 paid in excess of 35 percent. Hardly seems like a fair way to tax.

New Hampshire is long overdue for major tax reform. We need to expect all newly elected officials, from state rep up through the governor, to be willing to tackle this state’s chronic underfunding and lack of appropriate taxation, to look at all possibilities, from marijuana legalization to a capital gains tax to a property tax circuit breaker. Most of all, we need taxes, based on ability to pay, that can replace the excessive property taxes in this state.

So, do we love the property tax, since we rely on it so much to make government function in New Hampshire? No, we don’t love the property tax — we hate it so much, we fear other taxes. But we must move past our fear. A fair and sufficient tax structure will only improve our state’s economy, and our sense of community. 

Jill Shaffer Hammond, a former three-term state representative from Peterborough, recently sold her home of 33 years and now shares a rental in Harrisville. In recent years, she says property taxes took 20 percent of her income.

Categories: Opinion