Opponents of New Hampshire tax cap proposal sue to block referendum

(The Center Square) — Opponents of a New Hampshire proposal to set a statewide cap on property tax increases are suing to strike the referendum from the November ballot.

Legislation signed by Republican Gov. Kelly Ayotte in July will ask voters to amend the state's constitution to cap local school district property taxes at the previous year's level, adjusted for inflation and new construction, and limit how much local school districts can spend. 

The measure, which will appear on both the 2026 and 2028 ballots, requires at least 60% of voters two separate votes to approve an amendment to the state's constitution.

But critics say the proposal set for the Nov. 3 ballot is "misleading" because the wording of the ballot question fails to make it clear whether voters are being asked to limit school taxes, cap administrative costs, or both. 

They filed a lawsuit earlier this week in Merrimack County Superior Court to strike the proposal from the ballot and have requested an emergency injunction with the state expected to start printing ballots for the November election.

"To protect themselves and other New Hampshire voters from the violation of their fundamental right to vote, the plaintiffs seek emergency equitable relief pursuant to the New Hampshire Constitution, including a declaratory judgment that the ballot question is unconstitutional," lawyers for the plaintiffs,  Kelly Wieser, of Campton, and David Bates, of Warner, wrote in the 22-page complaint.

The ballot question reads: “If adopted for a two-year period: (1) the local property tax levy may not grow beyond the prior year’s amount, adjusted for inflation and new construction; (2) SAU central office spending may not exceed 6 percent of total school district appropriations.”

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The proposal, championed by Ayotte and other top Republicans over the objections of Democrats, has been criticized by teachers' unions who say it would mean less money for already cash-strapped school districts. 

The "Live Free or Die" state of New Hampshire doesn't have a personal income or sales tax, but still has some of the highest property taxes in the nation. 

It was ranked 29th in the Tax Foundation's latest report, which found that Granite Staters pay an average of $5,949 a year in local property taxes, which are collected by cities and towns and vary widely.

Democrats have long argued that the lack of a statewide personal income tax forces many cities and towns to increase property taxes to cover the cost of doing business and there have been short-lived efforts to impose one over the years. 

Democratic lawmakers filed a bill in March that would impose a 3% flat income tax and a statewide property tax to raise an estimated $1 billion a year for public schools. They said the move would ease the pressure on local governments to increase property taxes and provide much-needed funding for public schools. But the proposal was rejected by the Republican-controlled Legislature. 

In the 2012 elections, New Hampshire voters approved an anti-income-tax amendment, but the referendum fell short of the two-thirds supermajority needed to be approved.