The New Hampshire House of Representatives is currently considering a bill that would, as I understand it, require municipalities, counties and school districts to allow voters to decide whether to impose a tax cap on local property taxes in each November biennial general election. If voters enacted such a tax cap, the local government entity would be limited to increasing property taxes each year by not more than the previous year’s tax rate plus the amount of any increase in the Consumer Price Index and any additions to the tax base.
The proposed property tax cap is the latest response to the seemingly inexorable and unsustainable growth of the property tax burden on New Hampshire property owners. Although property taxes and tax rates vary from community to community, in many and perhaps most municipalities, the annual increase in the property tax rate has far outstripped the rate of inflation as to both consumer prices and wages.
In my hometown, for example, the town tax rate increased approximately 9% in each of the past two years, and the overall tax rate (town, county, school, and state education) increased 10.8% from 2023 to 2024 and 9.85% from 2024 to 2025. During the same period, Social Security benefits increased 2.5% for 2025 and 2.8% for 2026, based on the rise in the cost of living in the relevant months of 2024 and 2025. Many employees likewise received wage increases consistent with the CPI increase. Moreover, many other workers received no wage increases in the past 18 months. Consequently, New Hampshire citizens are clamoring for some form of property tax relief.
Tax limits have a long history in the United States. The most intense and widespread adoption of tax limits that capped the amount of property taxes that could be assessed occurred in the early 1930s, at the height of the Great Depression. Political scientists, public administration experts, and other contemporary observers noted that “American taxpayers are bearing an intolerable burden” and “revolt at the heavy needless burden they are made to bear.” Depression-era taxpayers responded to this tax problem with a variety of political, legislative and legal strategies, including advocating for tax limitation measures. These efforts resulted in constitutional and statutory tax limits being adopted in numerous states.
As with many things in life, the efficacy of these tax limits proved something of a mixed bag. Tax limitation measures were blunt, inflexible instruments of tax relief, but in scores of states and localities they did in fact achieve the goal of reducing property taxes in the 1930s. In the short term, tax ceilings undermined municipal credit and forced public officials to curtail, sometimes significantly, government services.
As John Sly of Princeton University observed in 1935, “the control of local expenditures … is the surest road to tax relief.” In many New Hampshire communities, citizens find their property tax burdens increasingly onerous. If local officials prefer not to have tax limits imposed on them, perhaps they should heed the advice of William Munroe, a professor of history and government, who in 1933 argued that governments should “begin by determining that public expenditures … be trimmed in line with the existing revenues” rather than bridging “the gap by piling on more taxes.”
To be clear, however, New Hampshire’s property tax crisis is not only a spending problem. It is also a revenue problem. The New Hampshire legislature began phasing out the 5% tax on interest and dividends, which taxed only very well-off individuals, in 2023 and eliminated it as of 2025. It reduced the business profits tax rate from 7.9% in 2018 to 7.5% in 2023, and it slashed the business enterprise tax rate from 0.75%, in effect from 2001 to 2015, to 0.55% in 2022, and is now considering reducing it to 0.5%. The State of New Hampshire needs those lost revenues lest the services provided by local government deteriorate further.
We need property tax relief in New Hampshire. The political branches of state government must provide it by restoring the interest and dividends tax and increasing the business taxes to their previous levels, and earmarking those additional revenue streams for property tax relief. Local government units must provide it by reducing expenses and promoting economy and efficiency in their operations and organization.
Linda Upham-Bornstein, Ph.D., is the author of “Mr. Taxpayer versus Mr. Tax Spender”. She lives in Plymouth.