Group touts income and statewide property taxes to pay for local schools

In the latest effort to design a system to pay for public schools in New Hampshire that doesn’t depend primarily on local property taxes, a new group is proposing a system that combines a 3% income tax with a $3 statewide property tax to replace much or all of the cost currently born by town school tax bills.

“This is an opportunity to cut your damn property taxes … to make the people with the most, finally pay their fair share,” Rep. Tom Oppel, a Canaan Democrat, said during a presentation Tuesday in front of the State House.

The group, led by nine former and current lawmakers, said the proposal, called The 3-3 Tax Savings Plan, is designed to get a conversation going about changing the state’s method of paying for schools. It includes a number of deductions and exemptions that organizers said would keep it from being a burden to lower- and middle-income renters and homeowners, while drawing more from wealthier residents and companies.

That conversation may not get very far at the State House. Republicans, including Governor Kelly Ayotte, were quick to dismiss the plan they called a “tax scheme.”

“Absolutely not,” Ayotte said. “I’ve said it before, and I will say it again – no income tax, no sales tax. Not now, not ever.”

Several speakers at Tuesday’s announcement pointed to an online calculator that estimates the financial effect of the program based on where people live, where they work, whether they own or rent, the value of their residence and their tax-filing status. It is at nhtaxsavingscalculator.com/

The hope is that giving people a way to see the results of the tax plan can overcome the held concern that adding a “broad-based” tax such as an income tax would not reduce any existing taxes. That concern has been a stumbling plan for decades to previous similar plans to shift away from heavy use of local taxes to pay for schools.

“What we’ve lacked in the past is a way to reflect what would happen,” said Oppel.

Aislinn Kalob, Concord city councilor for Ward 6, pointed to the debate over replacing Rundlett Middle School, which worsened when promised state aid fell through, as an example of how the current system fails.

“What I saw … were residents of our community fighting against one another because the property tax burden was too much to bear,” she said.

Kalob, who rents, said that local property taxes also hurt people who don’t own their homes by indirectly driving up rents. The 3-3 Tax Savings Plan includes exemptions for renters.

New Hampshire depends more heavily on local property taxes to pay for public education than any other state, a system the group called an “antiquated means of funding our schools” that produces uneven education and tax burdens. As an example, they said the local equalized school tax rate in Allenstown is $11.10 while in Alton, a much wealthier town on Lake Winnipesaukee, the rate is just $3.32 even though Alton spends $2,200 more per child on its students.

“It’s not that schools cost too much. New Hampshire’s school costs are in line with costs in the other New England states. The problem is how we pay for them,” the group said in a statement.

The proposal gives deductions to the income tax “to protect working and middle class taxpayers” and the statewide property tax has a $250,000 homestead exemption credit, designed to lower the tax bill on people’s primary residence. An income tax would also collect funds from people who live in Massachusetts and work in New Hampshire; it would not do the same for New Hampshire residents who work in Massachusetts.

New Hampshire has seen a number of proposals over the years to create some sort of statewide tax on income or sales to reduce reliance on local property taxes. They have faced stiff opposition from those who argue the creation of any “broad-based” tax, most famously in the shape of The Pledge, which for a half-century has made it difficult for any politician to be elected unless opposing income or sales taxes.

Organizers of the 3-3 Plan include Andru Volinsky, a former Executive Councilor and candidate for governor who has long been part of the school funding debate, and Mark Fernald, whose own run for governor in 2002 focused on methods to reduce local property taxes. Other members are former Concord mayor and state representative Liz Hager; former PUC member Clifton Below; state representatives Peter Lovett and David Preece; and political science professor Ted Morgan, who writes frequently about the state’s problems paying for public schools.

The post Group touts income and statewide property taxes to pay for local schools appeared first on Concord Monitor.