Durham — March 21, 2008 — For decades, it has virtually been a requirement that elected state officials in New Hampshire take “The Pledge,” a promise not to institute a broad-based income or sales tax. But now there is a growing movement to reject that pledge and overhaul the state’s tax system.
A nonbinding measure calling for tax reform appeared on the town meeting agenda of 96 communities in the last two years, and it has passed in about 70 percent of them, including at least 67 in the last week. Supporters of the measure say the goal is to ease the tax burden on homeowners. Opponents say it is a backdoor effort to pass an income or sales tax in a state that neither wants nor needs them.
“New Hampshire is over-reliant on property tax,” said Paul Henle, executive director of the Granite State Fair Tax Coalition, which placed the item on the town agendas. Opponents point out that the group focused on towns with extremely high tax rates.
Mr. Henle, however, says new taxes are not the goal.
“We need a rebalancing of our revenue priorities,” Mr. Henle said. “We do understand that if less money comes from the property tax, it has to come from somewhere else. It could be an existing revenue source, a new revenue source. It could conceivably be a new tax, it could be gambling. We don’t know.”
New Hampshire is a study in tax contrasts — the lack of broad-based income or sales taxes gives it the lowest overall tax burden in the nation, but the property tax burden is the country’s third highest. The only other state without a state income tax or a statewide sales tax is Alaska, said Gerald Prante, a senior economist at the Tax Foundation, a nonpartisan tax research group.
“New Hampshire is an oddball in the Northeast,” he added. “They’re just a low-tax state in general, and in New England, it’s an anomaly.”
The property tax here is allocated toward local government and schools, as well as a state education fund. The state taxes various things, including meals and rooms, business profits and personal dividends. That revenue goes into the state budget.
The call to reform the property tax system is heard loudly in Durham, which has one of the highest property tax rates in the state. The rate is high, in part, because the town is home to the main campus of the University of New Hampshire, which does not pay property tax, said Lorrie Pitt, the town tax collector.
The resolution passed overwhelmingly here, with 70 percent of residents voting for it, Ms. Pitt said. Even so, she said, many are still leery of adding new state taxes.
“With property tax,” she said, “at least you can claim it and use it as a deduction.”
Opponents of the measure say it is a way to stealthily push for new taxes.
“The people behind the anti-pledge resolution are a group of people in favor of a broad-based tax in New Hampshire, specifically an income tax,” said Fergus Cullen, chairman of the state’s Republican Party. “What they have put together is a dishonest and misleading resolution, which misrepresents what they really want.”
Gov. John Lynch, a Democrat who has taken the pledge, is opposed to the resolution and would veto any new taxes, a spokesman said.
Rob Dix, the tax assessor here and a resident of nearby Barrington, said he thought the current system was working just fine.
“New Hampshire has the lowest net taxes of any state in the nation,” Mr. Dix said. “If that’s the case, the property tax seems to be working pretty well.
“As a resident of New Hampshire, not an assessor, I appreciate lower taxes.”
Does anyone know if Ossipee and Freedom voted on this issue at their town meeting? A huge percentage of their revenue comes from lake property owners who are non-resident taxpayers and can’t vote. If you were a local selectman, would you want to rock that boat?
Long time NH residents need to re-think their positions on taxes.
Nothing is more regressive than a real estate tax that fails to take into consideration the property owners ability to pay. It’s really not about new taxes, but very much about a better tax code. A general sales tax can be avoided by those unable to pay it – just don’t make the purchase. The state income tax would be based upon the persons income and ability to pay it.
1.. Does everyone realize that the tax code as it exists today is taking the homes away from long time NH residents, including the elderly, retired, widowed and infirmed that can no longer stay in their homes because of the RE Taxes?
2. Does anyone recognize yet that because of the NH RE tax code, and the recent re-evaluation on waterfront property owners, that all of the long time locals are being driven off of the lakes, and out of the mountains (lets not forget the view tax), and that soon the only property owners in those area’s will be out of state elitists?
3. It’s disgusting that NH prides itself in being courteous. “Thats the NH Way” it says on the road signs, while at the same time they contuously try to find ways to raise taxe revenue from out of stater’s. I’ve been boating in ME, NH, and MA since 1956, and in the early days, loing before any other states, NH sold boating registrations. I still own a boat with a 1963 plate on it. When the United States of America, all started to require boat registrations, two states refused to reciprocate and recognize any other states registration. Hawaii and New Hampshire were those two states. It’s a long drive by car and trailer to Hawaii from the mainland, but NH??? Lets face it folks, it’s all about securing revenue from the out of staters.
4. The % of town revenue being obtained from out of state property owners is a matter of public record. Just visit your town hall and ask. When 75% of the towns annual revenue comes from out of state propery owners, who cannot vote, and cannot speak without advance permission at town meetings, you have the laid the groundwork for a revolution. It’s a great example of taxation without representation. Anyone for an Ossipee Tea Party?
Instictively I don’t believe that NH has the lowest net taxes of any state in the union. If you add up all the hidden taxes, fees, permits, food taxes, hotel taxes etc.. I think you will realize that this is not the case, and until town clerks in town halls all over NH stop telling long time residents and widows to “:get off the lake if you can’t afford it” I’ll push for another way to do things, that is neighbor friendly and logical. Lets here it for NH package stores on the MA borders, for Fireworks stores on the NH borders, for no bottle bills, and for “get out if you can’t afford it” because in reality – that is the NH way.
Ossipee did not pass it. It was voted on by secret ballot and received about 16 votes (may be off a vote or two as I did not write it down), Just for the record, although I am not in favor of new taxes, I have always refused to take the pledge as some day in an emergency situation taxes might have to be increased.
Harry Merrow