Property Tax Rates Poised to Jump

By Rick Green
THE KEENE SENTINEL
Property tax rates in Charlestown, Keene and Jaffrey — now among the highest in the state — are among those poised to jump this year under budgets local voters approved last month.

The N.H. Department of Revenue Administration sets these rates in late fall by calculating the assessed value of property throughout a municipality and the amount of money that town or city must raise through taxes.

Local education is typically the largest component of these rates, followed by municipal, county and state education charges.

Governmental expenses at the local level have been increasing along with costs for fuel, electricity and labor. Towns with higher property values tend to have lower rates.

For example, Moultonborough, which includes a lot of expensive real estate on Lake Winnipesaukee, has a 2022 rate of $4.78 per $1,000 of a property’s assessed valuation.

Meanwhile, Charlestown’s rate is $32.27, fourth highest in the state. Keene’s is eighth at $31.03 and Jaffrey’s is ninth at $30.98.

Property tax bills are a perennial concern in Charlestown, population 4,800, selectboard Chairman Jeremy Wood said in a recent interview.

“People don’t have an easy time in our town specifically,” he said. “More than half are on a fixed income. We’re predominantly an older town.”

Charlestown voters on March 28 approved a $6.4 million operating budget, up 2.8 percent from the budget passed last year. Wood said the town hasn’t calculated the effect on the tax rate.

But the Fall Mountain Regional School District estimates its new $35 million budget will add $330 to the tax bill on a $200,000 home in Charlestown. Adding that to the bill from the current tax rate would bring that property owner’s total bill to $6,784.

The Keene School District’s new $72.6 million budget, up 1.3 percent from the current spending plan, will also likely have an upward effect on property taxes.

District officials estimate the school portion of property taxes in the city will jump 10.8 percent — or roughly $337 on a house worth $200,000. Added to the bill from the current rate, the total property tax on that home would be more than $6,500.

Keene’s city budget will be adopted in June.

Property taxes are also likely to go up in Jaffrey. Voters in Jaffrey and Rindge approved a $30.4 million school district operating budget that is estimated to increase taxes on a $200,000 home in Jaffrey by $382. The town estimates another $60 hike to that tax bill from its new municipal operating budget of $7.2 million, up 4.2 percent from the current spending plan.

All told, the property tax bill on a $200,000 home in Jaffrey could increase to about $6,640.

New Hampshire, which doesn’t have overall income or sales taxes, depends heavily on property tax revenue for school funding. The state typically has among the highest property tax rates in the nation.

Meanwhile, the state has been reducing other forms of taxation such as the business profits tax, the interest and dividends tax and the business enterprise tax.

Phil Sletten, research director for the N.H. Fiscal Policy Institute, said property taxes account for more than half of state and local revenue in New Hampshire.

In 2020, New Hampshire picked up 31 percent of the cost of local public education, the lowest percentage of all states, he said.

In 2019, New Hampshire residents paid $2,910 per year in property taxes per capita, the fourth-highest nationally.

Meanwhile, the dependence on property taxes in the Granite State seems to be growing.

“Reducing revenue at the state level, whether it’s through revenue reductions or through the elimination of revenue sources, decreases the amount of resources the state has available to help support operations and services at the local level,” Sletten said.

Proponents of tax reduction say eliminating taxes tends to stimulate business activity and increase government revenue overall. Sletten said he has not been able to find evidence to back up this theory.

Deb Howes, president of the American Federation of Teachers-NH, has been pushing for more state support for schools. She said plans to eliminate the interest and dividends tax have been especially troubling.

That tax is slated to be phased out in 2027, but a House-passed budget bill would sunset the program two years early. Backers of that effort noted that retired people on fixed income are among those who pay this tax.

Howes had a different take.

“It’s insane, we’ll cut back on a tax that mostly really wealthy people pay on money that is sitting there earning money for them. It’s not even work they’re doing,” she said.

“We’re very heavily reliant on the local property taxpayer and so many of the local property tax bases are tapped out and can’t absorb any more. This causes a different quality of education from one town to the next and that’s not fair to our students.”

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

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