A new law puts school district tax caps on the November ballot. Here’s how it works.

As they weigh their choices for governor, state legislators, and Congressional representatives, New Hampshire voters will also be asked a different question in November: Should we freeze our local school district’s property taxes?

A bill signed into law by Gov. Kelly Ayotte Wednesday, House Bill 1300, requires that all ballots for the Nov. 3 general election ask that question, and requires a three-fifths supermajority for such a cap to be put in place.

Her signature on the bill advances a Republican-favored approach to a bipartisan problem: rising property taxes that are burdening residents. To Republican lawmakers, school district budgets have ballooned out of control and tax caps are a necessary balance. To Democrats, tax caps could hurt districts arbitrarily, and local taxpayers would be better helped by greater state investments in public schools.

“This bill gives voters a say about their local property taxes and ensures Granite Staters’ voices are heard,” Ayotte said in a statement Wednesday.

The ballot measure could kick off a new scramble this fall to sway voters in favor or against a cap. Here’s how the new law works.

A mandatory question, with a three-fifths threshold

The bill requires that all voters be presented a question on the November general election ballot that begins: ”Shall the [name of municipality] limit property tax growth for [name(s) of school district(s)] under RSA 32:5-i?” That represents a departure from the previous method, which required the school board or a group of voters to bring forward a warrant article — a proposal to vote on — ahead of a town meeting. 

If at least 60% of all voters in that district vote yes in November, then the measure is adopted for two years. That 60% requirement applies to the total of voters across all towns in the district, not each town individually. 

The law does not require towns or school districts to hold hearings ahead of the vote, though it does allow them to do so. 

If support fails to hit 60%, the measure is defeated. But the law requires all towns to ask the question again on the 2028 general election ballot, regardless of whether they passed or defeated it.

Property tax increases would be limited to inflation

Should voters adopt the tax cap, the bill imposes clear requirements. 

For the two-year period, the administrative body crafting the school budget — typically the school board — would be barred from passing a budget that required an increase in the school district’s portion of local property taxes. (The cap would not stop tax increases for municipal expenses, unless voters had separately passed a municipal tax cap.)

However, not all increases would be blocked. To start, the tax burden could increase with inflation, as measured by the Northeast Consumer Price Index. That index registered a 4.3% increase in prices from June 2025 to June 2026. 

Additionally, the cap would allow the tax burden to grow to incorporate “net new taxable property growth.” School boards could capture any new construction or expansions to properties in the municipality. But they could not count the standard market appreciation or re-assessments of existing properties, and could not consider changes in assessment technology.

The state Department of Revenue Administration, which calculates the correct local property tax rates necessary to fund a school district’s budget, would be tasked with enforcing the tax caps — and deciding what counts as new taxable property growth.

That could add to administrative costs of about $100,000, the department said in a fiscal analysis.

“The Department of Revenue Administration (DRA) would be required to certify taxable property growth and bonded capital costs, receive and review detailed compliance documentation from districts and SAUs that adopt caps, ensure no tax rate is set above certified limits, and update reporting systems and rate setting software to administer the caps beginning with the fiscal year 2028 budget cycle,” it wrote in its analysis. 

School administration budgets would also be capped

If adopted, the tax cap would not just curtail property tax increases. It would also require school boards to limit the size of administrative budgets to 6% of the overall budget.

The law defines administrative costs as “general management functions, superintendent salaries, human relations, district-level IT, payroll, legal services, and public relations.” It clarifies that administrative costs would not include expenses related to classroom instruction, school-based administrative staff like principals, special education services, food services, transportation, or facility maintenance.

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It is not exactly clear how many districts currently spend more than 6% of their budgets on administration. Ayotte signed a law this year, House Bill 564, that requires districts to separate out those expenses and allows voters to approve or deny the proposed administrative budget as its own item every year; but that data will not be available until next year. 

The law sunsets in 2032

The law requires the ballot questions be placed in the November 2026 and 2028 general elections. But the actual tax caps themselves would end by 2032. 

That’s because the ballot-passed tax caps, as designed, are limited to two-year terms. Even if a town adopts one through this process in 2026, it would take effect for two school years (2027-28 and 2028-29) and then expire by July 2029. Voters in that same district would need to re-approve another two-year cap during the 2028 election, and that cap would last two more school years until June 2031. After that, the caps would cease.

Of course, voters in any district could elect to bring forward a permanent tax cap under the existing process. The new law does not repeal that approach. 

Once approved, caps could be difficult to reverse

HB 1300 does not include an “undo” option for school districts tax caps adopted via general election ballot. 

Unlike the process already existing in law, in which voters in school districts can adopt tax caps at annual town meetings, the new law’s process does not appear to allow voters to take a subsequent vote and elect by a three-fifths majority to repeal the cap. Instead, any tax caps adopted under HB 1300 appear to be designed to last the full two years until they expire.  

But because there is already a process allowing voters to adopt — and repeal — separate tax caps at town meetings, the new law raises the potential for a clash, and a legal battle over which process takes priority should voters change their minds. 

After a wave of rejected tax caps supporters hope for success in November

The law comes after a spate of attempts in recent years to expand New Hampshire tax caps. 

School districts and towns have had the ability to adopt tax caps via a voter-led petitioned warrant article since 2011. Some cities, such as Dover, Franklin, Laconia, Manchester, Rochester and Somersworth have tax caps built into their charters. But the mechanism is rarer among school districts in towns. 

In 2024, Republicans sought to make the tax cap adoption process easier for school districts, passing a law, Senate Bill 383, that created a specific tax cap adoption process for districts. 

But while some districts have adopted the caps, voters in many more have defeated them. In the 2025 and 2026 spring school budget meetings, a number of districts failed to meet the 60% threshold, including Brookline, Campton, Claremont, Contoocook Valley, Durham, Epping, Epsom, Kearsarge, Lee, Madbury, New Durham, Plymouth, Salem, Thornton, Warner, and Weare

To proponents of HB 1300, those defeats are the result of the low turnout in spring elections; if a tax cap were proposed to voters in a general election, many more would support it, they argue. Requiring it to be asked on that ballot allows for a more representative result, they say. 

Opponents, who include teachers’ unions, the New Hampshire School Boards Association, and the New Hampshire School Administrators Association, counter that HB 1300 is anti-democratic because it forces a one-sided question onto the ballot. Requiring voters to organize petitions and rally support for a warrant article is more fair, they argue. 

“New Hampshire voters already have the authority to place caps on local school budgets and taxes, and time and again they have chosen not to because they understand the real costs schools face, including rising utility expenses, health care premiums, and the growing cost of student support services,” said Megan Tuttle, president of the National Education Association of New Hampshire, the state’s largest teachers union, in a statement Wednesday.

Either way, Ayotte’s signature of the bill will add a new dimension to an already closely watched midterm election. 

“The Taxpayer Protection Act puts the question before the largest number of voters possible and gives them the opportunity to take back control,” Rep. Ross Berry, a Weare Republican, said after Ayotte signed the bill. 

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