By GARRY RAYNO, InDepthNH.org
CONCORD — Enacting a broad-based tax has always been the third rail of New Hampshire politics.
A proposed constitutional amendment attempts to soften the blow by requiring all the revenue from any new broad-based tax to reduce property taxes.
The prime sponsor of the CACR 17, Rep. Tom Schamberg, D-Wilmot, said he envisions working with the recommendations of the Commission to Study Education Finding, which had its first meeting earlier this week.
“For over two years, the state legislature and the governor’s office have been trying to put a ‘whale’ known as ‘funding for an adequate education’ into a tub of water,” Schamberg told the House Ways and Committee Wednesday at the Legislative Office Building.
“These storm clouds of the duty to fund public education is resulting in thwarting your community’s financial well-being and security of property.”
He said he is not promoting a sales or income or any other kind of broad-based tax, but wants to set a tone that leads to security for home-owners by reducing property taxes.
Schamberg along with Robert Hemenway, former long-time Sullivan County manager, told the committee the constitutional amendment would give voters a say on an issue lawmakers have been reluctant to solve despite two state Supreme Court decisions.
The current funding system is a continual succession of confused, incoherent and muddy policy that each party can manipulate, Schamberg claimed.
“Is the answer for property tax relief always to go to established revenue sources we presently use to fund the state budget. I say no,” he said. “The present framework of the state’s taxation policy to give property tax relief for public school funding needs to change.”
Hemenway said if the amendment is approved by voters, it would require lawmakers to establish a broad-based tax, but committee members said the amendment would not require a broad-based tax, it would require the revenue from a broad-based tax to go only to property tax relief. It would be up to lawmakers to pass a broad-based tax or not, said committee Chair Rep. Susan Almy, D-Lebanon.
Hemenway said the amendment would not raise additional money, instead it would replace property taxes with revenue from another source.
But several committee members asked why limit revenue to what is being spent now and others said the lock box could mean greater strain on existing revenue streams to pay for state services if the new revenue only reduces property taxes.
New Hampshire’s property taxes are going up faster than in any other state, said Hemenway, up 25 percent over the last 10 years.
“Something has to change,” Hemenway said. “People on fixed incomes have
to sell their homes because they can’t pay their property taxes.”
Other committee members said the bill should indicate whether the broad-based tax is a sales or income tax.
“People want to know before voting on something like this,” said committee member Rep. Edith Tucker, D-Randolph. “A sales or an income tax, there’s a huge difference, they are not interchangeable parts.”
Others were concerned the money may be used for property tax relief but not necessary education or county costs as Schamberg and Hemenway contend.
The new money could be used to replace state aid to education, but also could be used for a new football field or waste-water treatment plant, noted Rep. Jerry Stringham, D-Lincoln.
Another member was concerned there is no distribution formula to determine how much money would be sent to cities and towns.
Rep. Thomas Southworth, D-Dover, noted his community does not receive a lot of state education aid, so without the formula it is hard to see if it would help or hurt.
A sub-committee will review the bill before the committee makes its recommendation.
Garry Rayno may be reached at email@example.com