A Republican plan that aims to limit local spending in New Hampshire by forcing cities, towns and school districts to vote every two years on whether to cap property taxes was met with plenty of criticism during its first public hearing Tuesday.
Critics of the bill, which is the latest in a series of proposals from GOP leaders that aim to rein in local spending, questioned if it was constitutional for the state to force communities to vote on a cap — or any measure, for that matter. They also raised concerns about the mechanics of implementing such a cap, as well as its effect in an economy where labor and healthcare costs are growing faster than any community’s tax base.
“You put this cap on a town, you know what’s going to happen? You are going to lay off police. You are going to lay off the fire department. You're not going to get your streets plowed,” said Rep. Kristine Perez of Londonderry. "This is a crisis."
Perez was among the 22 House Republicans who bolted from their caucus earlier this month to vote with Democrats to derail a separate GOP effort to impose a cap on local government spending.
Rep. Ross Berry of Weare is lead author of this new proposal, which he repeatedly told colleagues on Tuesday to see as a work in progress. But Berry said a key priority is to ensure voters get to consider a tax cap during high-turnout state general elections in November, rather than during town elections. Berry said he is also committed to making sure any mechanism for voters to override an approved tax cap would require more than a simple majority vote.
“What we have is a framework. We are still developing it,” Berry said.
Limiting local government spending and taxes has been on the agenda for Republican leaders in the New Hampshire House for some time. Before the local spending cap bill that failed during the House’s first meeting this year, there was the failed plan to cap local spending in the state budget Republicans adopted last year. Before that, there was the 2024 law they backed to allow citizens to propose per-pupil caps in school spending. Seven school districts considered adopting such caps last year, and in every case, support fell short of the required three-fifth vote of support.
The prospects of this latest bill are uncertain. No one but the proposal’s sponsor spoke on its behalf during Tuesday’s hearing, while critics lined up.
“This simply defies our system; it assumes that information is known when it is not,” said Margaret Byrnes of the New Hampshire Municipal Association.
Byrnes pointed out that the local tax rates this bill aims to cap aren’t determined until well after municipalities and school districts decide on spending.
Others offered broader critiques, including leaders of Merrimack's school distinct.
“The state is expanding funding for Education Freedom Accounts and cutting revenues, and is still failing to meet its constitutional obligation to adequately fund education,” said Heather Robitaille, who chairs Merrimack’s School Budget Committee. “We are failing to address the fundamental issues, which is how we fund education.”
Lawmakers will consider a number of school funding bills this year, but no major change in approach is expected. While backers of the local spending and tax caps see getting local spending in hand as a critical step in stabilizing school funding during a time when overall student enrollment is dropping in New Hampshire, critics of the cap argued that spending time blaming local decisionmakers for rising property taxes misses the point.
“It is not the selectboard, and it is not the counties that are causing this problem,” said Democratic Rep. Tom Schamberg of Wilmot. “It is located right here, under the golden dome."
