As a former economics teacher and current school board member, I have taught, thought about, and discussed taxes for a long time. It is no secret that property taxes are fundamentally regressive, an antiquated system that makes assumptions about wealth and oneโs ability to pay.
I have noticed, however, that some perceptual issues persist. First, there is the idea that property taxes are running out of control. While a singular case, a 14-year analysis of my tax bill since my renovation shows a year over year increase of 2.3%. With a longer data set of 26 years, another constituent shows a year over year increase of 2.71%. Accounting for inflation, these are not exactly runaway numbers.
Second, there is a perception that oneโs taxes are exorbitantly high, and if one only could move elsewhere, the problem would be solved. Again, using my property valuation and neighboring tax rates, I wondered if this land of milk and honey existed. Turns out if I could drop my property and its valuation in Bow, I would save $892, and in Concord, $392. But if I went to Warner, my taxes would rise by $246, and Henniker would cost me an additional $1,822. In fairness, the land of milk honey seems to be Weare, which shows a savings of $1,585 and Webster at $2,097. However, I wouldnโt be so bold as to conclude that no one in Weare or Webster complains about their taxes. The point being that, regionally, taxes are relatively high everywhere.
Finally, there is the fundamental problem of the property tax: It is presented as a bill one is able to pay solely on property ownership, rather than based on oneโs actual ability to pay or what I call the โeffective property tax rate.โ Simply put, this would be the tax divided by a householdโs gross income. Using this calculation, my personal โeffective property tax rateโ over the past six years averages 5.6% of income. For me, a reasonable number given all the benefits I receive: police and fire, roads, libraries, parks and recreation, transfer facilities, and of course, schools. However, for someone on a fixed income and/or experiencing a significant economic or medical shift in oneโs life, the picture may not be so reasonable. For example, in a recent discussion with a community member, they shared that their โeffective property tax rateโ would be about 20%.
This is the regressive reality of property taxes and why New Hampshire should consider an alternative means of taxation, particularly for education. A broad-based, low-rate tax, with no complicated deductions, would create a more equitable means of generating the revenue necessary to support a quality system of education throughout the state of New Hampshire.
As we approach the November election, please support candidates who are open to a tax system that is fair and equitable to everyone in New Hampshire, rather than those who cling to an outdated โpledgeโ that harms seniors, burdens families, and creates massive inequities between citizens, cities, and towns throughout New Hampshire.
(Rob Nadeau lives in Hopkinton.)