Every fall, when property tax bills arrive in mailboxes across the state, homeowners experience the same sticker shock. We are repeatedly told New Hampshire is a “low-tax state” because we have no general income tax. But for the majority of Granite Staters who do not make a high salary, New Hampshire isn’t low-tax at all — it simply shifts the entire burden onto our homes.
New Hampshire relies more heavily on local property taxes to fund public K-12 schools than any other state in the country. Between local school district warrants and the Statewide Education Property Tax (SWEPT), property owners shoulder roughly 70% of the cost of public education.
Local school boards are trapped in an impossible fiscal vise. Because school boards cannot legally cut special education services, reduce contracted health benefits or stop busing students, they have very little maneuverability. When these three mandated categories rise faster than local tax caps or voter patience allow, districts are forced to absorb the costs by cutting the only fluid areas left: regular classroom teachers, elective programming, building maintenance, sports and field trips.
The result is a punishing system that squeezes fixed-income seniors out of their homes, prices young families out of homeownership, and starves neighborhood classrooms of foundational learning opportunities. Unfortunately this will be amplified in towns such as my own, where school budget and property tax increases are now capped by the rate of inflation.
It does not have to be this way. We can deliver permanent property tax relief to all of New Hampshire households — and solve our state education funding dilemma — by asking only the top 5% of earners to contribute through a fair, marginal income tax.
Here is how a balanced “Top 5% School & Property Tax Relief Plan” would work:
First, the bottom 95% of New Hampshire earners would pay zero income tax. For single individuals, the first $190,000 of annual income is 100% exempt. For married couples and families, the first $380,000 of income is 100% exempt. Not a single teacher, firefighter, tradesperson or middle-class family pays a dime.
Above those thresholds, the tax phases in gradually across three marginal corridors so there are no sudden “tax cliffs”:
- Tier 1 (Top 5% — 95th to 97th percentile): A 3% marginal rate strictly on income between $190,000 and $255,000 for individuals, or $380,000 and $510,000 for married couples.
- Tier 2 (Top 3% — 97th to 99th percentile): A 6% marginal rate strictly on income between $255,000 and $390,000 for individuals, or $510,000 and $780,000 for married couples.
- Tier 3 (Top 1% — Above the 99th percentile): A 9% marginal rate strictly on income over $390,000 for individuals, or $780,000 for married couples.
Because the top 5% of earners in New Hampshire bring home over $15 billion annually, this targeted structure generates $558 million every single year for the state’s Education Trust Fund.
Here is how that $558 million transforms education and property taxes across our state:
First, the state uses $363 million to completely abolish SWEPT overnight. That single statutory change wipes the state education tax line item off every property tax bill in New Hampshire.
Second, the state still has $195 million left over each year to send directly to public schools — delivering over $1,282 per student in brand-new state adequacy aid across all 152,140 public school students in New Hampshire.
In our own backyard, the numbers speak for themselves:
- In Pembroke: Repealing SWEPT eliminates $1.32 million in property taxes (-$1.09 per $1,000), while Pembroke schools gain $1.26 million in new aid — reversing recent state funding cuts, lowering the total tax rate by up to 9.6% (-$2.10 per $1,000), and saving the owner of a $500,000 home up to $1,050 a year.
- In Concord: Repealing SWEPT eliminates $7.85 million in property taxes (-$1.58 per $1,000), while Concord schools gain $4.85 million in new state adequacy aid — bringing $12.70 million in total relief to the city and saving a typical homeowner $711 to $1,120 every year.
- In Bow: Repealing SWEPT eliminates $2.19 million from property tax bills (-$1.21 per $1,000), while Bow schools receive $1.86 million in new funding — dropping Bow’s total tax rate by up to 10.7% (-$2.14 per $1,000) and saving a median homeowner up to $1,391 a year.
Even for dual-income professional families who cross into the top 5% — for example, a couple earning $430,000 — their 3% tax on the $50,000 above the exemption is just $1,500, which is fully offset by their local property tax cut. And for a family earning $1 million, their effective state income tax rate is just 3.99% — still far lower than in Massachusetts, Maine or Vermont.
For decades, Concord politicians have claimed to protect the “New Hampshire Advantage” by giving the wealthiest 5% an exemption from income tax while sending the bill for our children’s schools to working homeowners. Repealing SWEPT and funding our classrooms with a targeted, marginal tax on top earners isn’t radical — it is common sense and basic fairness for the other 95%. Write to or call your representatives in Concord. Let them know you are ready to support public schools and reduce property taxes.
Craig Betchart practices family medicine at Concord Hospital. He lives in Pembroke.