By Daymond Steer
CONWAY – This municipal budget season had residents and officials alike wondering what can be done to keep property tax growth under control.
A study by town assessor Tom Holmes show that property taxes went up by, at most, 25 percent between 2004 and 2013. However, they have gone up about 50 percent since 2003 when a reevaluation year is included. The discussion about taxes began in earnest after tax caps were proposed for the town and school district. Both failed at the ballot box on April 9.
Selectmen began looking for non-tax revenue sources and the town manager Earl Sires has identified about $300,000 that could be raised by increasing various town fees. Selectmen have also discussed lobbying the legislature in order to get a greater share of the state’s rooms and meals tax. Selectmen also mulled the possibility of imposing a local tax to catch tourist revenue.
Sires told selectmen that the state only makes public the rooms and meals revenues by county. He suggested the first step may be to find out how much money Conway generates.
“I would be amazed if they can’t figure it out by zip code,” said selectman Carl Thibodeau of the state’s Department of Revenue Administration.
Selectman Mary Carey Seavey strongly opposed the idea of a local tax because she said it would have a “huge impact” on tourism.
A reporter asked Conway’s lawmakers for their ideas about how to bring property tax relief.
State Senator Jeb Bradley (R-Wolfeboro) said the question of where municipal revenues should come from has been an “age-old debate” in New Hampshire.
“A lot of people that support an income tax or a sales tax support it with the hope that revenues that go back to towns and school districts would be used to mitigate property taxes,” said Bradley. “I have to question, not only in the short run, but in the longer term, if that would be effective.”
Other New England states have those other taxes and they still have substantial property taxes.
“I certainly hear people complain about property taxes in Maine, Vermont, Massachusetts and Connecticut,” said Bradley.
Bradley and Rep. Gene Chandler (R-Bartlett) pointed to a study by the Tax Foundation that shows New Hampshire is among the states with the lowest overall tax burdens in the country.
The Tax Foundation recently reported that New Hampshire has the seventh lowest tax burden in the U.S.
“Using the most up-to-date data available, the report shows that taxpayers in New Hampshire paid 8.0 percent of their collective incomes in state and local taxes in 2011,” stated a press release from the Tax Foundation. “The national average was 9.8 percent.”
Bradley seemed pleased with New Hampshire’s ranking. Bradley thinks the government is more likely to spend the extra revenue from any new taxes rather than using it to offset property taxes. Bradley says New Hampshire also has a relatively low unemployment rate compared to other states with higher taxes.
“I think that’s a good place to be in,” said Bradley of New Hampshire’s ranking. “If we had an income tax or a sales tax, realistically those are the only two that would offer the kind of revenue that could be used to reduce property taxes.”
A state gaming bill that passed the Senate provides revenue sharing with the towns. Bradley said the annual impact is about $25 million. The previous position of the Senate was to have the money go toward to the the highway fund.
“The impact it’s going to have on lowering tax rates is going to be negligible,” said Bradley who has legislation to make sure that if the gas tax is to be increased all the new money would be dedicated to roads and bridges.
Bradley also seeks to end the diversion of highway fund dollars into the department of public safety.
But Rep. Tom Buco (D-Conway) supports the expanded gambling bill and said Conway would receive $128,000.
“This would be a direct relief to property taxpayers,” said Buco.
Bradley’s empathy for property taxpayers was the reason that he fought for reform of the New Hampshire retirement system. Bradley believes the changes to the retirement system will have a “very beneficial effect” over time.
He explained that cities, towns, schools and counties are part of the New Hampshire retirement system. New Hampshire had a $5 billion unfunded liability that was causing rates to go up. Bradley said his reforms asked employees to pay a little bit more and work a little longer before they can retire. It also stops public safety workers from padding their final compensation package to inflate their retirement.
“It’s starting to work because rates have stabilized,” said Bradley. “That was one big thing we did.”
Bradley said people in this economy are working longer and harder to make ends meet.
“I totally get why people are feeling trapped,” said Bradley adding he hears tax complaints in Wolfeboro too.
When asked about gambling, Bradley said he thinks proponents are too optimistic about the revenue it could bring in. He said there’s only so much money that people have to gamble with.
Local taxes are a function of local decisions made by majority will at the annual meetings, said Chandler.
“Those issues are solved on the local level,” said Chandler adding if people think taxes are too high, they should “go to town or school meeting and vote no.”
The state legislature has made it easier for tax caps to be adopted at the local level, said Bradley.
“I think it’s a tool for taxpayers to make sure that there’s more accountability,” said Bradley. “There are override provisions in it and if towns don’t like it they don’t have to adopt it.”
Another recent Tax Foundation study found that New Hampshire will be the 33rd state to reach “Tax Freedom Day” – which is described as “the day on which New Hampshirites have collectively earned enough income to pay off their total federal, state, and local tax bills.”
This year’s New Hampshire Tax Freedom Day fell on April 19. Representatives from the Tax Foundation cautioned against comparing one year’s state Tax Freedom Day to the previous year’s state Tax Freedom Day because their analysis is based on federal statistics and the feds revise their methodology from time to time.
When asked if property taxes are causing residents to come to a breaking point, Rep. Mark McConkey (R-Freedom) said Carroll County has an aging population and “many” residents, who paid off their homes, face a property tax bills that exceeds their former mortgage payments.
“Unfortunately their retirement income is not sufficient to pay this ever-increasing liability and many are forced to sell their nest egg and relocate to a lesser accommodation,” said McConkey. “For those involved in local government and state legislators that say an increase to taxes is warranted, I suggest that they are out of touch with our aging population. Our towns, county and state have a spending problem.”
