Taxpayers seek to end statewide education property tax


After being a Hopkinton resident for 23 years and an educator in various New Hampshire school districts for even longer, Jim Lewis has seen the issue of school funding from many angles.

Commuting daily from his home in Hopkinton, where he paid about $8,000 in taxes last year, to work in Lempster where he is Superintendent of Schools, Lewis can see firsthand how much every dollar in funding counts. for a district and how high the property taxes are. impacting residents.

He loves Hopkinton for its bucolic setting, its “excellent” school system and its supportive townspeople and cannot imagine moving. But for many of its neighbors, staying in town has become unaffordable, Lewis said.

The school tax of $21.80 per mile of property value is more than three times the municipal tax rate of $6.50 per mile.

“Hopkinton is a great place; I love it. And a lot of people feel the same way I do,” Lewis said. “But a lot of people have left because they, I quote, ‘can’t afford it anymore’, and that’s concerning. There must be a better way.

Lewis is one of the latest plaintiffs in a lawsuit claiming New Hampshire state education tax rates are unconstitutional because they are not proportional between cities. The lawsuit, which was launched in June, argues that the state relies too heavily on local taxpayers to provide the funding necessary to give students an adequate education. Due to the state’s overreliance on property taxes, students across the state enjoy different educational opportunities depending on whether they live in a property-rich city or a property-poor city, which is unconstitutional.

“I wish it was spread a little more evenly,” Lewis said. “A town like Lempster is a very small town; a thousand dollars for us is a lot of money compared to other districts. I would like to see the state take ownership of it a bit more, rather than the small town.

Lewis’ modest home is valued at $256,800, according to the city’s appraiser. He knows of other residents with much higher home values ​​who pay up to $15,000 a year in taxes.

“In my current position, I am lucky. I can stay,” Lewis said. “But I don’t know how long it will last. We know how to put money aside each month, simply because we know it’s going to hit and it will always be a little more than expected.

Last week, landlord plaintiffs took the next step by asking the court for a preliminary injunction to restrain State Department of Revenue Administration Commissioner Lindsey Stepp from setting property tax rates on the Statewide Education (SWEPT) for the coming year as the trial continues. . In their motion, the plaintiffs argue that they will likely succeed in proving in court that the SWEPT violates the Constitution by not being uniform in all cities.

In New Hampshire, about 62% of funds for public education come from local revenues, while the state funds about 31% and the federal government funds the remaining 7%. New Hampshire property owners are billed for both local school property taxes and state taxes. Each city is required to collect the SWEPT in addition to its local property taxes to raise funds to cover the cost of state funding an adequate education. Since 2005, the Legislature has set the total annual amount to be raised by the state school tax at $363 million, but lowered it to $263 million for the 2022–23 fiscal year.

Lewis, alongside co-plaintiffs Jessica Wheeler Russell and Adam Russell of Penacook; John Lunn of Newport; Robert Gabrielli, owner of a commercial building in Penacook; and Steve Rand, who owns commercial property in Plymouth, say the state of New Hampshire is too dependent on local taxpayers to provide the funding needed to give students an adequate education.

The lawsuit, led by attorneys Andru Volinsky, John Tobin and Natalie LaFlamme, is the latest legal move to change the state’s school funding model. Their argument is based on the 1997 rulings in the Claremont School Funding Lawsuit, where the New Hampshire Supreme Court ruled that state property taxes for education must be “administered from equally in assessment and uniform in rate throughout the State”.

“We’re just going to go ahead and try to show the court that not only are the rates different mathematically and numerically, but they violate the Constitution,” Tobin said.

The debate around New Hampshire’s education financing system identifies two types of cities: “asset-rich” cities, with rich tax bases and high property values ​​that can generously fund their public schools, and “asset-rich” cities. asset-poor” who struggle to provide finance. without disproportionate taxes. The divide, which has endured despite several state Supreme Court rulings, means that asset-rich towns tend to enjoy better facilities, higher teacher pay and often better academic outcomes, while that asset-poor cities experience delays in upgrading facilities and face high staff turnover.

New Hampshire’s school funding system was declared “unfair from a student and taxpayer perspective” by the Commission to Study School Funding in a 2020 report. At the time, the commission—composed of lawmakers from state, school administrators, and education specialists—proposed to redistribute state school taxes so that excess taxes from wealthier cities would be passed on to those with fewer resources, restoring a system of “donor city” which had been eliminated in 2011.

Another school funding lawsuit called ConVal, filed by the Contoocook Valley, Mascenic, Monadnock and Winchester school districts in 2019, is still ongoing. This lawsuit argues that the funding the state provides per student — which was about $3,636 in 2019 — is not enough and does not take into account the costs of transportation, teachers and facilities.

“Between the two of us, I hope we have a new system where the state does its fair share and taxpayers pay comparable rates instead of really disproportionate rates,” Tobin said.

The trial date for the tax rates trial has been set for August 2023.


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