Op-Ed: Vote No On Tax Cap

By PETER POWELL

There is absolutely no question that we must lower our property taxes here in New Hampshire.  However, our State government wants us to believe that we are the problem, that our local communities have created the burdens of high property taxation in our towns and cities, and that we must fix it in a manner which they seek to force upon us.

If this is true, who do we blame?  Has it been our selectmen, our Mayors, town or city administrators, our budget committees, the fire and police departments, school boards, teachers, administrators?  No, the answer to that question is none of the above.  These are all good people working hard to meet their responsibilities while protecting and preserving what they can of our tax dollars.  The problem we suffer is instead the result of our State Government continuing to downshift responsibilities and their costs to local property taxpayers, blatantly passing the buck!  We have allowed State leaders to abandon their responsibility to do this work and to pay for it with State revenues, as assigned to the State by our constitution, state statutes and our courts. 

The tax cap proposal now being foisted upon us by the State is a cruel hoax.  First, it is poorly conceived and badly written, yet forcibly presented!  The Majority Leader in the House recently proclaimed that if the towns don’t impose a cap, then the Legislature should do so.  This apparently reflects an attitude on the part of Free State Libertarians, now in the process of gaining control over the Republican Party and our Legislature, to center authority not by maintaining local control, but by moving it to Concord.  At a recent gathering here in the North Country, this same individual declared that any vote not in favor of their candidates would be a vote for Communists!  Really?  Is this New Hampshire?  In addition to new and strange values, this legislature wishes to claim our property taxes not as our community contribution to education, but as the State’s contribution, apparently to falsely claim the State is doing its job when in fact it is not.   

The legislative mandate to vote on such a cap is not just another authoritarian leap, but also one of the silliest and least plausible propositions we can recall in our decades long memory of NH political history!  Consider this if nothing more:

Most of the goods and services purchased by our Districts come from the private sector via local businesses and companies.  Are we to call up our fuel providers and tell them to fill the tanks at all our schools, but don’t bother to bill us more than 3.9% above what we paid last year (an estimate of current inflation) despite the 75% to 80% increase in fuel and diesel?  Can we guess what our Yankee vendors will tell the central office if they make such a call?  And what about the huge increases in healthcare costs, including insurance?  What about food costs for feeding our children in our schools?  Are our grocery bills only 3.9% higher than a year ago?  The examples are many, and it is a joke, a ruse, a silly and poorly conceived measure, apparently intended to put the blame for our high taxes entirely upon us at home rather than blame the State that wishes we did not understand its many failures, as follows:

1.) The courts have repeatedly told the State it must pay for the cost of an adequate education, but the State refuses to accept that responsibility or find the resources within its purview.  In addition to failing to set the cost at its true expense, it understated the responsibility and created a statewide education property tax for us to pay on top of our own local and school taxes.  Consequently, local property taxes pay 72% of the cost of public education in NH.  NH is ranked  LAST IN THE NATION in State funding for public schools, and we are also dead last in our State support of public, post-secondary (higher) education.  NH was also recently declared the worst state in the Nation for teachers in terms of pay and benefits.  Yet, we are projected to need an additional 1100 new teachers annually over the next decade due to resignations, with fewer students entering the field. 

What are our chances of recruiting and retaining the best if we make things even worse?

2) Long-term care costs for eligible seniors are supposed to be borne equally by Federal and State Governments.  NH has reneged on its responsibility by simply failing to perform for many years.  In one recent year, our local property taxes paid 93% of the State’s 50% share.

3) When the State enticed towns and cities to join the State retirement system to broaden its revenue base, it promised to contribute 40% of the cost of adding fire, police and teachers to the State system.  That was soon reduced to 35% and continued to drop until the percentage requirement was eliminated in 2013.  A one-time payment was made in 2023 when Federal ARPA funds were awash in NH., but efforts to restore a continuing percentage contribution have failed.

3) Every revenue source in this State is the result of negotiation and compromise.  The State was obligated by law to share revenue from multiple sources but fails to do so.  From the Business Profits Tax, local governments should receive 40% of the gross proceeds (the legislature stopped this distribution altogether in 2010) and have cancelled revenue sharing; from Rooms and Meals Tax revenues, it was to be 40% (a promise not kept, then proposed for reduction to 30% but repealed and replaced by a fixed sum significantly below the percentage, with nothing promised going forward).

4) Business tax rates have been discredited by non-partisan studies as a means of attracting jobs and industry, but rates for BPT and BET have been reduced nonetheless, leaving deficits.  The Interest and Dividends Tax has been eliminated, removing over $130 million in State revenue per year, not replaced and not available for education, roads, healthcare or any other state or local purpose.  The ploy seems to be, “We don’t have enough money for special education or many other such purposes, so you make up the difference with your property taxes.”  The reverberations are deafening and cruel, and our leadership is not being honest or vocal about the ploy. 

If space permitted, we could recall in detail the 1990s study of our State’s Fiscal Policy by Peat Marwick KPMG which found our system to be structurally deficient, regressive, inelastic, inadequate and in need of reform.  We know it is broken.  We know the options for fixing it, but things have changed very little in the interim (only the BET was added by Gov. Steve Merrill, but Interest and Dividends have now been subtracted!) Either we find the courage to reform, or we go silent and live with the results.  State leaders responded to the Study by saying they would just spend less!  We could all laugh over this avoidance of truth, if we didn’t have to cry!

All these examples of our State failing in its responsibilities add up to millions and millions of dollars each year, increasing local tax bills while starving towns and cities of State revenues.  If this were not the case, and our local governments were not forced to make up for the gaps left by the State, we would not be fighting over schools or other responsibilities here at home.  We would instead be deciding together how well we can spend the money after reducing our taxes, deciding what we can do to improve our local economies, our infrastructure, create greater opportunity for our children, and provide for the care of senior and other citizens who are our collective responsibility.  Always conservative, but not entirely honest, our State budget is a statement about more than who we can fool about taxes.  It is a reflection of our values, what we believe in, how we think we should use our resources and utilize our government to meet collective responsibility, to work toward serving the common good, and to behave as a people. 

The picture this paints is not of the New Hampshire I thought I grew up in, nor is it the NH which my father served as Governor decades ago.  Nor do we seem to be the Nation which he fought and nearly died for, taking a 20 mm bullet from a German fighter plane attacking his B24 over Europe in WWII!  He was but one of so many heroes who fought and sacrificed, then and ever since, for a country they believed in and loved.  It is our responsibility now to pay attention, to be sure of our kindness and good purpose as a people, and to be good stewards of the resources, economic and natural, which have been left to us.

It is hard not to be personal and think of those who set greater example.  The entire tax cap proposition is a blatant dodge by State leaders who are frightened to raise revenue, unwilling to meet responsibility, leaving only us to raise our voices together if we will, hoping we will be heard if we will simply speak!

Peter is in his 54th year of service as a REAILTOR in NH’s North Country, a great source of experience and understanding of community dynamics, the essentials of ecomonmic development, and the vagaries of markets. He has served on more than two dozen non-profit boards, commissions and community organizations. In earlier years he served on Captial Hill under Senator Norris Cotton as a member of the Minority Professional Staff on the Senate Committe on Commerce. Other experience included working and campaigning with his father, former NH Governor Wesley Powell of Hampton Falls.

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