BEWARE! AMENDMENTS MEAN HIGHER PROPERTY TAXES

by Rep Dr. Roger G. Wells (R+D - Rockingham Dist. 8)

Governor Lynch's proposed Constitutional amendment and all its revisions and modifications WILL result in higher property taxes. While the amendments may sound noble and "reasonable," they actually contain code words with double meanings which would have a disastrous effect on local property taxes.

The term "targeted aid to the most needy towns," for example, sounds like a reasonable solution to education funding but taxpayers should realize that the extra money sent to a few towns will be gained by removing funds now sent to most "middle tier" towns. Currently, the state of New Hampshire is in last place in the nation with state grants funding only 22% (compared to a national average of 50%) of total education costs. The amendments are designed to keep it that way---to prevent the state from contributing more money for education funding. The less the state pays, the greater the burden on the local property taxpayer.

The word "reasonable," which appears in the proposed amendments, is another code word, a legal expression to virtually eliminate judicial review of the state?s education funding plans. There are tried and true reasons that we have three branches of government. Judicial review is one of them. Without it, towns that have been shortchanged will have no recourse but to rely on raising property taxes to fund education, even that part which is mandated by state and federal governments.

If the state does not increase the total dollars for funding and continues to divert money from one town to another, then those towns who lose funding will see catastrophic property tax increases. For those whose property taxes represent 2% or less of their gross income, this scenario works fine. But this so-called "New Hampshire Advantage" is only an advantage for the wealthy. Most governors and many legislators fall into this category. But what of those people in our state who are not so "advantaged," those whose property taxes represent, say 30%, of their gross income? These folks, and as property taxes rise their numbers are growing, are indeed being taken advantage of.

For many of these "disadvantaged" taxpayers, property taxes have become so egregious that many older citizens have been forced out of their homes. Likewise, young people who could afford the purchase price of a home decline to buy because they cannot afford the annual property taxes. Many of the homes on the market are being sold by people required to "down size" because their taxes have become so unreasonable.

Amendment supporters are using scare tactics, claiming that an increase in state funding for an adequate education would take away---code word alert---"local control." This is outright deception. The most likely definition of an "adequate education" represents about 50% of total education costs for a district. That 50% covers the cost of courses mandated for graduation, plus special education costs. Since none of these expenses is discretionary or optional, they never were subject to local control. Local control remains with the other 50% which includes administration costs, plant operations, transportation, food service, interest and principal on debt, facility construction, and such optional enhancements as lower student/teacher ratios, music programs, foreign languages and athletics. More ?local control? than that is merely code for more local---and less state---funding. More ?local control? means higher local property taxes.

Property tax relief can only be accomplished if all towns receive funding for the adequacy portion, i.e. approximately 50% of education costs. The state does not need an amendment to the Constitution to provide targeted aid for the neediest districts. This can already be given after fairly funding adequacy costs to all districts.

Another scare tactic New Hampshire's "advantaged" use is to claim the only way to increase revenues for additional state funding is with an income tax or sales tax. Since every New Hampshire governor, including John Lynch, has taken discussion of those options off the table by promising to veto them, other sources of funding are being explored.

As a member of the Ways and Means Committee, I know it is possible to raise enough revenue to increase state funding to the 50% level. The fiscal note for video lottery machines at the pari-mutuel tracks estimates revenues of $421,356,000.00, giving $220,000,000.00 to the General Fund that could go to education. Increased revenues from additional tourists paying rooms and meals tax would also go a long way towards providing the extra funds needed.

There are other sources as well, among them a group of small taxes, referred to as the "patchwork quilt" tax proposal. Examples include a luxury tax on a portion of the cost of items such as jewelry over $10,000 and cars over $30,000. Those who can afford these more expensive items can also afford such a relatively small tax which would, in the end, provide relief for everyone?s property taxes.

Rather than trying to ignore our responsibility by concentrating our efforts on a Constitutional amendment to continue the status quo, all of us---the Governor, the House and the Senate---need to join together to find a solution for education funding. You too can help. If you believe as I do, that property tax relief must be a part of that solution, then contact your representatives and senators to urge them to stop stalling and get on with the job they were elected to do.