Editorial: A lesson in the burden of property taxes

Published: 2/9/2019 12:04:51 AM

When it comes to raising revenue, an old aphorism credited to the late Louisiana Sen. Russell Long, longtime chairman of the Senate Finance Committee, generally applies: “Don’t tax you. Don’t tax me. Tax that fellow behind the tree.”

In New Hampshire, the fellow behind the tree is usually the property-tax payer, so watch your wallet.

Earlier this month, Monitor State House reporter Ethan DeWitt described the difficulties mental health care providers face when hiring and keeping staff. The next day, Brendan Williams, president of the association that represents nursing homes, said the same problem afflicts the institutions, public and private, that provide long-term care for elderly residents who’ve exhausted their financial resources.

New Hampshire’s reimbursement rates under Medicaid, the federal health care program that covers the poor and the indigent, are the lowest in the land. Neither class of institutions can afford to pay what it takes to attract and keep employees. Licensed nurse assistants in nursing homes, for example, make $12 per hour. That’s not a livable wage. Mental health workers, once trained, soon leave for better paying jobs.

Senate Bill 308, sponsored by Democratic Sen. Cindy Rosenwald, would increase the state’s Medicaid reimbursement rate for mental health care, which is matched 50-50 by the federal government, by 12 percent. The price tag, if fully funded, is $115 million. It deserves to pass, but her bill does not address nursing home funding.

Inadequate state funding of mental health care centers and nursing homes transfers costs to property owners in the form of higher law enforcement and incarceration costs at county jails and higher taxes to keep nursing homes afloat. And then there’s the state’s gross underfunding of public education, which unconstitutionally transfers costs to local taxpayers, virtually guaranteeing another school funding lawsuit.

A 2018 study by the New Hampshire Fiscal Policy Institute highlights the unfairness of relying on property taxes to pay for things the state should fund. Under the state’s constitution taxes must be “reasonable and proportional,” so the disparities in the burden inflicted on property-rich and property-poor communities is unconstitutional.

Local tax rates per $1,000 valuation depend on local spending, of course, but the biggest factor is the amount of taxable property per capita. Cities like Manchester, Nashua and Concord have high total property values but relatively low property values per capita.

Communities with resort and lakefront property or a major taxpayer like a power plant or regional shopping mall and relatively small population have very low tax rates. Communities with many people and fewer assets to tax, think places like Franklin and Pittsfield, have very high tax rates.

Newington led the state, in the institute’s report, with $1,376,078 of valuation per capita. It was followed by Waterville Valley, where Gov. Sununu’s family and associates own a ski area, at $1,333,676. Those communities are outliers. New Castle, with $748,201 per person, came in third.

Contrast those values with $64,132 in property value per capita in Pittsfield, $60,721 in Boscawen, $52,514 in Claremont and Berlin, in last place, at $39,816. Berlin’s 2017 tax rate was $39.19. New Castle’s tax rate was $5.85. The gaps show up in other ways. More than half of Franklin’s students were eligible for reduced-price lunches in 2017. In Bow the figure was 5 percent. Communities with the highest tax rates also tend to have the highest poverty rate as well.

New Hampshire, the nation’s second oldest state, needs fully staffed nursing homes. It sorely needs fully staffed community mental health centers. It needs quality teachers and schools for every student. What it doesn’t need, especially its poorest residents, is higher property taxes.

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