Governor Shaheen proses a low sales tax and a lower statewide property tax to pay for public schools. The proposal would also eliminate or reduce a few other taxes.
New Hampshire Public Radio's David Darman has more.
Governor Jeanne Shaheen calls her plan "Excellence in Learning for New Hampshire", or "EXCEL N-H". The plan relies on a combination sales tax and statewide property tax. Shaheen says the sales tax is set at the low rate of 2 and a half percent, and will not apply for sales of prescriptions, heating oil, food, clothing and other necessities.
"My choice of a narrow based sales tax is based on the analysis of the nh commission on education funding, my blue ribbon commission, which found that a low rate sales tax in conjunction with a low rate property tax, would not harm the economy."
The Governor says the adoption of a sales tax will allow the state to eliminate the legacies and sucession tax, slightly reduce the interest and dividends tax, and also roll back the latest increase in the business enterprise tax. Shaheen also promises a reduction in the statewide property tax of more than one dollar per thousand dollars of valuation for everyone, and special protection for those who need it.
"It allows us to cut the rate of the statewide property tax from 6.60 to 4.90 a thousand. The proposal also offers additional property tax relief by providing a circuit breaker for low and moderate income homeowners throughout the state."
Shaheen says the lower property tax will reduce, but not elminate the number of donor towns in the state. And she reiterated that she wants the legislature to help her pass a permanent solution this year. Two Republican represenatatives joined Shaheen during the unveiling of her plan, but most GOP members in the House support a plan put forth by their leaders.
Deputy House Majority Leader David Hess sponsors the plan, known as House bill 50, and, unlike Shaheen's plan, it would not fully fund education. Hess and other Republicans would simply dedicate 75% of the Business Enterprise tax and Business profits tax to education funding.
"hb 50 would replace a basket of several small, revenue sources with relatively limited growth, with a single, dynamic revenue stream, which has grown at a rate of 9.5% a year, on average over the last 7 years. That revenue stream is our common business enterprise tax and business profits tax."
Hess and other Republican leaders acknowledge that HB 50 as they present it is nearly 100 million dollars in deficit, but they say their proposal is just a step on the way to a permanent solution. They say any long-term education funding proposal should really be a part of the entire budget process in the legislature.
Democrats who are supporting Governor Shaheen?s proposal say the GOP bill is without merit. Senator Caroline McCarley of Rochester accuses the Republicans of simply playing a shell game with the numbers.
"no, there?s absolutely no validity to that.; that is a refusal to accept the responsibility we now have as a state to fund a the state budget and the education fund."
Governor Shaheen had similar sentiments about the Republican plan.
"but the fact is, what david hess and the other members of the leadership team offered this morning was nothing more than a shell game. Their numbers don?t add up and it is a prescription for financial disaster for the state of nh."
Shaheen says "Excel NH" will strengthen the state?s finances, and also the schools themselves, since the plan has a component to improve and measure performance. And while the plan offers relief on some fronts in return for a low sales tax, it is clear that it has a long way to go in the Republcan controlled legislature.
For NHPR News, I'm DD
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