Former New Hampshire State Board of Education Chair Fred Bramante’s column “Addressing Property Tax Relief” got my attention, especially the lead paragraph that promised to show me “how to provide property tax relief to the vast majority of New Hampshire homeowners without a broad-based sales or income tax.” Unfortunately, when I finished reading the article, the promised solution was nowhere to be found.
After accurately describing how New Hampshire’s over-reliance on property taxes “places disproportionate burdens on some communities and homeowners” which, in turn, “deepens the divide between property-wealthy towns and those with fewer resources,” Bramante purports to offer “a better way forward.” And what is that way?
“New Hampshire should adopt an income-based property tax circuit breaker (whereby) no homeowner would pay more than a fixed percentage of household income in property taxes,” he writes.
And where would the money come from to make up the lost property tax revenue?
Bramante’s response: “If (property) taxes exceeded that threshold, the state and community would step in to make up the difference.”
And where would the “state and community” come up with money to make up the difference? Bramante does not pose or answer this multimillion-dollar question. Would each town redistribute its property tax bills based on the homeowner’s ability to pay? Would the state redistribute its education funds to provide relief to those homeowners who are unable to pay their taxes? And who decides the fixed percentage of income that a homeowner must pay toward property tax before qualifying for the circuit breaker?
Instead of offering an answer to those questions, Bramante muddies the waters by putting another problem on the table: The arcane and outdated funding formula New Hampshire uses to fund education. He asserts that education funding, “like every other major category of taxing and spending,” should be based on “need and impact,” advocating a funding formula that accounts for “both student need and community capacity — not just property value.” But like the legislators in New Hampshire who have avoided defining what constitutes an “adequate” education, Bramante avoids defining “student need,” thereby sidestepping the toughest question of all: How much the state should contribute to meet the needs of every student.
Like Bramante, I’m not a state representative and hold no state position. I’m a retired superintendent who served on legislative committees earlier in my career in Maine, New Hampshire and Maryland, and I represented the Superintendents Association on a governor’s commission on state education funding in Maryland. Here are my thoughts on New Hampshire’s funding for education.
First some facts: New Hampshire ranks 7th in the nation in per-pupil spending, 30.4% above the average, so it is plausible that, in aggregate, school districts in the state provide sufficient funds to meet the needs of all students. But since New Hampshire ranks 49th in the amount of state revenue that is directed toward public education according to Stats Panda, it has a small pool of funding available to “step in” and help towns that lack the property tax base to meet the needs of their children or to “step in” to offer property tax relief to those homeowners who are overburdened by property taxes.
If New Hampshire remains unalterably opposed to instituting a broad-based tax, there are three broad solutions to solving the overburdened property taxpayer, each of which poses political problems. The state can redistribute the funding it currently raises in a way that relieves overburdened taxpayers who qualify for the “circuit breaker”; redistribute its own budget to increase the amount it allocates to fund public education and earmark those additional funds to relieve overburdened property taxpayers; or it can redefine public schooling.
The state is familiar with the political dilemmas posed by redistribution of property taxes. Given its experience with SWEPT, the statewide tax adopted by the legislature to address the kinds of funding inequities Bramante cites in his op-ed. The bottom line with redistribution formulas like SWEPT is that when a new mechanism is applied to the same amount of funding, there will be revenue winners and losers and in politics, those who lose revenue seldom do so willingly. Redistributing all the funds going toward schooling is a daunting, if not impossible task, and often results in protracted litigation.
The state will face analogous problems should it redistribute funds within its own budget to provide tax relief to homeowners who qualify for a circuit breaker. The state’s limited revenue pool affects everything it funds, from police to prisons to childcare to health services to road improvements. Like public education, all agencies that rely on state funding are affected by the limited pool of state revenues. Moreover, any cuts to state revenue are likely to create a downshift to local funding, which will not enable local governments to provide property tax relief.
At this writing, the state legislature is implicitly addressing the issue of inequitable funding by redefining public schooling. By expanding its voucher program, it is underwriting unaccredited institutions, offering unaudited funds to homeschooling parents, and underwriting the costs incurred by parents whose children were already enrolled in private schools. By supporting vouchers, legislators are offering a new form of public schooling, one that requires limited oversight and, most importantly, a group pledged to keep costs down, limiting funding.
It is disappointing to me that, like Bramante, most people running for office want to believe that the complicated issue of equitable school funding can be addressed without looking at a fourth possibility: Find a new way to raise revenue so that there is enough to meet all the needs of the state. But based on what we hear in Concord and on the campaign trail, raising taxes appears to be off the table.
As an educator, I would like to see more funding available for schools. But I also know we need more resources for childcare, for affordable housing, for healthcare, for safety, and to provide relief from property. As a taxpayer, I know that meeting those needs would require more of my money. I would like to hear someone running for public office to acknowledge that reality.
Wayne Gersen is a retired public school administrator. He lives in Etna.