Poulson: The Unique Property Tax Revolt In New Hampshire

By Barry W. Poulson, NH Journal

New Hampshire citizens have experienced a sharp increase in property values and property taxes in recent years. New Hampshire now has the third-highest property tax burdens per capita in the nation. This has triggered a property tax revolt, but the revolt in New Hampshire is unlike that in any other state.

This year, the New Hampshire Legislature enacted the Taxpayer Protection Act. This act requires that every city, town, county and school district in the state place a property tax limit on the ballot in the 2026 and 2028 elections. Voters in each of these jurisdictions must decide on a ballot measure that limits growth in property taxes to the rate of inflation, plus any taxable property added to the tax rolls, for the following two years. These ballot measures also cap administrative cost growth to 6 percent annually. A cap takes effect only in a community if three-fifths of its voters approve it.

New Hampshire’s Taxpayer Protection Act is like Colorado’s Taxpayer Bill of Rights (TABOR), but with important differences. TABOR imposes a cap on the growth rate of total revenue and spending at all levels of government. Because New Hampshire’s Taxpayer Protection Act caps only the growth in local property tax revenues, this could lead to tax substitution. This is less of a problem in New Hampshire than in other states. That’s because citizens in New Hampshire have rejected broad-based income and sales taxes.

The Taxpayer Protection Act will strengthen direct democracy in New Hampshire. Every city, town, county and school district must place the proposed property tax cap measure on the ballot this fall. This will give citizens in each local jurisdiction in New Hampshire an unprecedented voice in setting property taxes; they will decide both the total property taxes collected and how those taxes will be allocated across jurisdictions.

New Hampshire now has the most competitive federalist system in the country, and the Taxpayer Protection Act will strengthen that system. The New Hampshire Constitution guarantees that the power to tax and spend is concentrated in local governments rather than in the state government. Citizens in each local community decide how much taxes they are willing to pay and how those tax revenues are spent. The combination of state and local taxes per capita in New Hampshire is significantly lower than the national average; the Tax Foundation ranks New Hampshire’s tax system third nationally for competitiveness.

The Taxpayer Protection Act will bring significant changes to the composition of property taxes in New Hampshire, especially to property taxes that fund education, which account for most property tax revenues. The act will allow citizens to cap school district taxes as well as other local taxes.

The fatal flaw in our education system is the absence of competition. In most states, the monopoly in public education gives families few choices in educating their children. The outcome is stagnant and declining student achievement despite significant increases in school funding.

Fortunately, New Hampshire has used school choice to expand the choices available to families in educating their children. New Hampshire is the 18th state to enact a universal private school choice program. The Education Freedom Account Program, enacted in 2021, provides each qualifying student with $4,600 in state funds that parents can use for private school tuition and other private learning programs. It is now open to all eligible students, regardless of family income. The program will enroll 10, 000 students for the 2025-2026 school year. It is administered by the Children’s Scholarship Fund New Hampshire and is regarded as one of the most effective private school choice programs in the country.

Families in New Hampshire may soon have access to a universal public and private school choice program. The New Hampshire legislature introduced a measure that would give families the right to send their children to any public or private school, with state funding support. Universal school choice is now available in other states such as Minnesota, which pioneered open enrollment in 1988.

Families in New Hampshire may soon have the widest range of choice in educating their children in the country. The Taxpayer Protection Act will allow them to determine how much property taxes they are willing to pay in each school district. Universal school choice would allow them to select the best public or private schools for their children.

Barry W. Poulson is on the Board of Directors of the Federal Fiscal Sustainability Foundation. He wrote this for NHJournal.com.

This story was originally published by the NH Journal, an online news publication dedicated to providing fair, unbiased reporting on, and analysis of, political news of interest to New Hampshire. For more stories from the NH Journal, visit NHJournal.com.