NH Bill Could Reduce Property Tax

By Richard Green
THE KEENE SENTINEL
Political arguments about the rising cost of gasoline, President Joe Biden’s performance and property tax relief took center stage last week when the N.H. Senate approved reductions to municipal retirement expenses and the business profits tax.

House Bill 1221 would reduce the business profits tax from 7.6 percent to 7.5 percent and provide a one-time payment to cover 7.5 percent of the costs towns and cities incur next fiscal year to pay the pensions of retired teachers, police and firefighters.

Sen. Cindy Rosenwald, D-Nashua, noted the bill is titled the “Property Tax Relief Act of 2022” because the reduced municipal retirement expenses could result in lower property taxes.

“It will give a one-year infusion of cash that might result in slightly lower tax bills in December,” she said in arguments over the bill on Thursday. “It might also result in zero property tax relief because there’s no requirement that the money be used to lower taxes.”

A better approach, she said, would be to provide permanent state retirement support to municipalities.

“Cities and towns need predictability and sustainability, not cut one year with a built-in tax hike the next year,” said Rosenwald, although she still voted in the bill’s favor.

She also said that last year she proposed a measure, which failed to advance, that would have required the state to pick up 15 percent of municipal retirement expenses.

Sen. Jeb Bradley, R-Wolfeboro, then turned the discussion to national politics.

He pointed to a section of HB 1221 that places blame for the current high inflation rate on policies adopted in Washington, D.C., since the last national election, when Democrats gained control of Congress and the White House.

“A myriad of factors have gone into that irresponsible fiscal policy coming from our nation’s capital: too much money chasing too few goods, severe restrictions on domestic energy production, spending bill after spending bill,” Bradley said.

Meanwhile, New Hampshire has a $252 million state surplus that he said was created through responsible fiscal management, practices he said have made the state “more competitive, more business friendly.”

Sen. Tom Sherman, D-Rye, who is running for governor, said he has a different interpretation than Bradley, who represents Senate District 3.

“I think that when we look at inflation, the part that my friend from District 3 forgot is a guy named Putin — cost of energy,” Sherman said. “Cost of inflation? COVID. Supply chain. Not all of it [inflation], for sure, but let’s not take things in isolation. Big surplus? We received over $2 billion in federal funding thanks to our federal delegation, [Democratic] Senators Maggie Hassan and Jeanne Shaheen, Congressman [Chris] Pappas, Congresswoman [Annie] Kuster.”

Sherman said that while HB 1221 would provide a permanent reduction in the business profits tax “mostly benefiting large out-of-state corporations,” property taxpayers would be getting only a one-time, possible reduction.

In the end, the bill was divided in two for voting purposes.

The business profits tax reduction passed in a partisan 14-10 vote, with all Democrats in opposition and all Republicans in support.

Aid to municipalities for retirement expenses was approved unanimously. The bill now goes to the Senate Finance Committee for consideration of fiscal elements.

Sen. Jay Kahn, D-Keene, said in an interview Monday that Republican-backed decisions to gradually eliminate the interest and dividend tax as well as reductions in business taxes don’t help in lowering New Hampshire’s property tax, which is among the highest in the nation.

“My priority is that state revenue policy should be focused on lowering the burden of property taxes and at a time when we’ve got state revenue surpluses, you can do that,” he said.

Rick Green can be reached at [email protected] or 603-355-8567

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