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Steve Winter
State Representative
District 3

January 15, 2011
"Statewide Prop. Tax"

Steven Winter represents the towns of Newbury and Sutton, Merrimack District 3, in the NH House of Representatives.

Representative Winter is a member of the House Executive Department & Administration  Committee, The Special Committee on Public Employee Pension Reform and the Joint Legislative Committee on Administrative Rules (JLCAR).

"….to impose and levy proportional and reasonable assessments, rates and taxes upon all the inhabitants of, and residents within, the said state…." Extracted from the state’s power to tax in Part I, Article 5 of the NH Constitution.

The quote above is the provision that requires each taxing authority to make all taxes "proportional", that is, at the same rate throughout the taxing district.

The Supreme Court in the Claremont decisions allowed the legislature to choose which brand of poison it elected to apply. Various choices were discussed and discarded. In 1998, the House and the Senate could not agree in on an income tax and a sales tax was rejected out of hand. The only state tax remaining as a viable choice was the statewide property tax (SWPT).

But the court then went even further. It said that funds must be provided equally to each child in the public school systems throughout New Hampshire whether that district needed the funds or not. That is why we have not been able to "target" funds for the past ten years to towns that need those funds.

As noted, the legislature, in an extended session that went into September of 1998, finally adopted the SWPT. The adoption of the SWPT resulted in the implementation of a "shell game", wherein a portion of the local property tax was converted to a state property tax.

But whereas local property taxes could vary by taxing districts, that is from town to town or county to county, the state tax had to be uniform throughout the state to be constitutional. This resulted in some towns raising less than needed while other towns raised more than needed. Thus the infamous "donor" and "receiver" towns were created, which resulted in the Balkanization of this state by pitting one town against another.

Donor towns have all but disappeared. But with the economic situation as it is today, they might reappear unless the legislature exercises its power to determine the policy question of how to distribute education funds.

The Supreme Court of New Hampshire has the power to determine whether the actions of the legislature conform to the constitution. The proportionality (or uniformity) of state taxes is one example. But nowhere in our constitution does it say how those taxes must be spent. That is a policy question. We raise all state taxes proportionally. But we spend money as the legislature determines, except for education. Gas taxes, for instance, improve some roads but not all roads at the same time. Matters of health and welfare are determined by need. Funds are not distributed to everyone.

Many now support a Constitutional Amendment to allow the legislature to determine how education funds can be spent. I support the amendment although I do not believe it is necessary. I believe the legislature already has the constitutional power to determine how to spend education money because there is no constitutional impediment for it to do so. But if this will finally settle the issue, let’s get on with it.




Steve Winter, Representative, Merrimack District 3
Newbury and Sutton, New Hampshire 

Telephone:  603-271- 3125 and 271-3319

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