Education tax inequities growing

Just when you thought the Claremont Education Lawsuit was over, and we never really thought it was over, the Concord Monitor editorial page writes about property tax inequality.

The report lists Claremont as the community with the highest combined state and local school property tax rate in New Hampshire: $27.02 per $1,000 valuation in 2008. Residents of Newington, home to power plants, industries and a large commercial district, paid just $5.90 per $1,000 that year.

Though it charges almost five times Newington's tax rate, Claremont can only afford to spend $11,523 to educate each elementary school student, and it can only spend that much because it gets more state education aid per pupil than Newington does. Newington, however, spent $23,293 per young pupil that year, while keeping taxes in the cellar.

That's the kind of discrepancy the Claremont lawsuits were supposed to fix.

Well, no, not really. The Claremont decisions on their face were about equal tax rates for the state's contribution to schools. Nothing more. Of course, the real motivations behind the lawsuits were for property-poor towns to get money from their property-rich neighbors. Some towns are forunate to be next to the ocean, a lake, or a mountain. Other made the decision to put up with more traffic by developing their commercial districts. Still others worked hard to keep businesses out, and then went to court to fix the disparity in their tax bases. The Claremont Education Lawsuits had nothing to do with education, and everything to do with rent-seeking. Since someone will always want someone else's money, the case will never really be closed.

Connecticut passes New Hampshire in property tax burden

The main argument made by supporters of a broadbased income tax is that it would ease the burden on local property taxpayers. Yet Kevin Landrigran reports in the Nashua Telegraph that the last two states to institute an income tax, New Jersey and Connecticut, both have higher property taxes than the Granite State.

The Tax Foundation reported that Connecticut displaced New Hampshire as the second-highest taxed state in the region; Connecticut property taxes in 2008 totaled $4,603 compared to New Hampshire's total of $4,501 last year.

New Hampshire had been second highest over each of the last five years, according to the group's analysis.

New Jersey led the nation as it has for more than a decade with an average property tax bill of $6,320 per household.

This isn't to say that property taxes in New Hampshire aren't high, or a tough burden for home and business owners. But you don't lower taxes by raising taxes.

Phony tax hikes: More Dem distortions

The Union Leader takes issue with a Democratic Party mailer blaming Republican candidates for tax hikes.

This mailer is all about hiding the Democrats' own tax hikes. The supposed evidence of Infantine's tax-hike support are his votes against this year's state budget. That Democrat-written budget contained more than 40 tax and fee increases. Infantine was voting against those.

What about property tax hikes? The budget actually contained those, too. It cut funds to local governments. That downshifting of costs created pressure for local property tax increases. Republicans pointed that out and proposed further spending cuts.

Today is Primary Day in Manchester. I'm headed to vote shortly. If you live in the Queen City, please remember to cast your ballot today.

A Small Victory for Transparency

The Portsmouth Herald is to be congratulated for posting on-line the list of Outstanding Property Taxes due in Exeter. Is this a big issue with far reaching public policy implications? Probably not. And that's all the more reason to do it.

The Transparency movement in America, and right here in New Hampshire, is about open government. The goal is to increase the public's access to public records, even records that may not seem very important. If information is power then the best way to empower average citizens in a democracy is to make their government transparent.

To view the list click here.

Exeter owed $3.5 million in unpaid taxes, bills

No one should be surprised that some people don't pay their bills, especially their tax bills. What is surprising is how government reacts. Taxes are supposed to be a fee for service. So when you don't pay your taxes you're getting the services for free and passing the cost along to your neighbors. Is that fair?

But as the Exeter News-Letter reports, some town selectmen are not exactly watching out for the taxpayers. If you don't pay your cable bill the cable company stops providing you service. Don't make your car payments and your car gets repossessed. But if you don't pay your water and sewer bills? Exeter will keep providing you the service, they'll increase taxes on your neighbors to pay for it, and maybe the selectmen will think about putting a lien on your property at some point.

Selectmen mull liens on property, water
Lara Bricker
newsletter@seacoastonline.com
August 07, 2009 6:00 AM

Selectman Robert Aldrich wants to know what options the town has to recoup some or all of $3.5 million in unpaid property taxes and other monies owned to the town.

After seeing a story in the Portsmouth Herald about the amount of unpaid parking tickets in the city of Portsmouth, Aldrich said he became curious about Exeter's outstanding revenues.

The amount of unpaid property taxes in Exeter has just about doubled from 2008, according to figures compiled by Aldrich from the town's Assessing Department. As of July 31, the town was owed $1,139,314.31 in back taxes, while in 2008 the town was owned $573,111.56 in back taxes.

The second biggest category of unpaid bills is water and sewer accounts. As of July 31, 2009, the town was owed $897,179.47 while in 2008 the amount of unpaid bills for these services totaled $549,318.34.

"There's a lot of money outstanding that's owed to the town of Exeter this year," Aldrich said. "This obviously has an impact on our operations and our bond rating, and everything else." (more)

Belmont Track can't collect new tax on gambling winnings

Laconia Sun reporter Michael Kitch wrote yesterday that the Lodge at Belmont isn't planning to sue the state over its new tax on gambling winnings, but it can't collect the tax for the state either. Less than two days into the fiscal year, and the state already has two injunctions against it, and another tax it can't collect.

Laconia Daily Sun- Gambling 07-01-09

Do something about property taxes

By CHARLES M. ARLINGHAUS

This session the Legislature has a chance to do something about property taxes. More accurately, legislators have an opportunity to give you the choice to do something about property taxes.

The Senate is about to consider a bill that would allow some communities the option of voting on a tax and spending cap. It wouldn't impose a cap or automatically schedule a vote. Rather it would make clear that cities and towns with a charter form of government could place a spending cap amendment on their ballots.

This bill as far as it goes isn't all that radical. Five cities have already adopted spending caps: Franklin, Nashua, Laconia, Dover and Rochester. A few more will consider spending caps this November.

Since Franklin adopted its cap 20 years ago, it was generally understood that cities and towns with charters could adopt a charter amendment by collecting petitions and having a vote on the ballot. Renewed interest in spending caps began with Laconia's successful petition drive and adoption in 2005. Since then, Dover and Rochester have followed suit.

But this year, a judge in Concord claimed that its cap would infringe on the city manager's right to bring in whatever budget he saw fit. It seems an awfully odd opinion, but you never can tell with judges these days.

So cap proponents are seeking a law to make clear that charters can be amended to include caps just as five of the state's larger communities, representing 15 percent of the state population, have done.

The law would not endorse spending caps, merely allow communities who have already chosen to have a charter form of government instead of town meeting to adopt a budgetary restriction if they so choose.

If it were me, I would go a step further. Current understanding is that only towns or cities with charters can have a spending cap. Towns with town meeting or the SB2 form of government cannot. I don't see why any town ought not to be able to adopt a spending cap if it chooses to do so.

In the last few years, supporters of an income tax have placed nonbinding resolutions on town meeting ballots expressing annoyance at our increasing property taxes. Their preferred solutions is to add an income tax on top of the property tax.

Voters in Sunapee had a better idea. Sunapee voters, annoyed at their increasing taxes, adopted the resolution. At the same time, they also adopted a nonbinding resolution urging selectmen to cap spending increases at the rate of inflation.

Because Sunapee has a town meeting, the resolution was nonbinding, but why shouldn't it, too, have the same choice as Nashua to cap spending?

Income tax supporters would have us believe that we could lower our taxes if we adopted another one. Yet history suggests otherwise. The last two states to adopt an income tax were New Jersey and Connecticut. In each case, the ostensible reason was to lower property taxes. It didn't work. The two states in the country with higher property taxes than New Hampshire are Connecticut and New Jersey. And they pay an income tax on top of it. And a sales tax.

In reality, taxes go up because spending goes up. They increase bit by bit over time when increases are a few percentage points higher here and there. Most politicians are under pressure to increase spending from existing programs, employees and people with ideas that will just cost a little bit of money.

A spending cap creates a framework for them to work within, imposing a discipline from the outside that human nature is reluctant to supply on its own. Massachusetts adopted a similar idea with its Proposition 2½. Property tax increases were capped with a provision to override the cap if circumstances called for it. Overrides happen frequently across the state, but property taxes are held in check most years. As a result, property taxes in Massachusetts went from being the second or third highest in the country to 22nd highest in the first decade of the law.

In New Hampshire, when Franklin adopted its cap 20 years ago, it had the highest property taxes in the state. Now they're below average.

The law being considered by the Senate doesn't impose caps on any community. It doesn't require a community to hold a vote. It merely allows them to do so. That seems reasonable enough.

Charles M. Arlinghaus is president of the Josiah Bartlett Center for Public Policy, a free-market think tank in Concord.