Democrats pitch 3% income tax to fund New Hampshire schools

(The Center Square) —  Republican New Hampshire Gov. Kelly Ayotte is vowing to veto a Democratic-backed proposal, unveiled on Tuesday, that would set a new state income tax to fund the state's public schools and reduce local property taxes. 

The proposal, dubbed the "3-3 Tax Savings Plan," would charge a 3% flat income tax and a “$3.00 true statewide property tax" to drum up an estimated $1 billion a year for public schools. 

"We must confront this reality: New Hampshire cannot cut property taxes in a meaningful way without fixing how we fund education. Anything else is make-believe," Former Executive Councilor Andru Volinsky, chief architect of the plan, said in a statement. 

The plan calls for a $35,000 exemption per taxpayer, a $15,000 exemption per dependent, and a $15,000 exemption for a single person or head of household.

“This plan works well for 80 percent of New Hampshire’s taxpayers," state Rep. David Preece, D-Manchester, a primary sponsor of the bill. "Residents of Manchester do particularly well because the 3-3 Tax Savings Plan boosts revenue for Manchester schools while cutting school taxes roughly in half." 

But shortly after the group "Cut Our Property Taxes!" unveiled its plan Tuesday, Ayotte swatted down the idea, and panned it as the latest attempt by the state's Democrats to raise taxes.

"Absolutely not. I’ve said it before, and I will say it again – no income tax, no sales tax," she said in a brief statement. "Not now, not ever."

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The New Hampshire House's GOP majority, who would ultimately have to consider the plan, scoffed at the idea in a social media post. 

"We say HELL NO," House Republicans posted on X. "The New Hampshire Advantage is under attack and Democrats CANNOT be trusted." 

Backers of the proposal said New Hampshire "relies more than any other state on local property taxes to fund schools, even though our courts have repeatedly ruled education is a state responsibility." 

"Property taxes are inelastic. They don’t flex when you lose a job, get divorced or become sick and they don’t recognize that you may have a fixed income," the group said. "Local property taxes are even worse because they rely on the property wealth of individual communities which vary widely." 

But Americans for Prosperity-New Hampshire Director Sarah Scott ripped the proposal a "recipe for destroying the low tax environment that New Hampshire residents cherish" and said the state's pro-growth policies "have led to a booming economy that should not be tampered with." 

"Granite Staters have always rejected an income tax, and this time is no different," Scott said in a statement. "We have seen this play before in states like Connecticut with higher taxes, broken promises, and working families paying the price. This proposal threatens the New Hampshire Advantage and risks driving Granite Staters to flee."