Garry Rayno, veteran journalist, explains how New Hampshire’s politicians of both parties have failed to approve equitable taxes to educate the state’s children. The libertarians, who play a large role in the state legislature, would prefer to have no taxes at all. The Koch machine has funded candidates who oppose fair state funding. This does not bode well for the future of the state.

Rayno writes in IndepthNH:

The courts have spoken many times over the last three decades about the state’s public education system and its funding.

In the ensuring 30 years since the Claremont I and Claremont II decisions were released by the state Supreme Court, little has changed in a meaningful way.

The Claremont I decision simply said the state has a constitutional obligation to provide every child in New Hampshire with an adequate (or worthwhile) education and to fund it.

Claremont II was a tax decision that says the current funding system is unconstitutional because it relies on a tax that is not assessed on every property owner in the same way with the same rate. Under the New Hampshire Constitution state taxes have to be proportional and reasonable.

The Legislature has yet to address either of the two basic decisions — there have been others — in the most fundamental way.

In New Hampshire, property owners in a school district’s community or communities primarily pay for public education.

Property taxes of one kind or another pay about 70 percent of the cost of education, other state funding accounts for a little over 22 percent and federal money about 8.5 percent

The local property taxes pay for about 61 percent and the statewide education property tax for about 8 percent.

That does not all add up to 100 percent because there is other money raised through tuition, food and other local contributions and insurance settlements, etc..

The national average for state contributions to public education is about 47 percent or more than double what the state pays even with the statewide property tax.

What makes the state system unconstitutional and inequitable for both students and taxpayers is the over reliance on property taxes to pay for the bulk of the cost.

Local property taxes have varying rates across the state ranging from a little over $5 per $1,000 of valuation in New Castle and Moultonborough, to nearly $35 per $1,000 in Colebrook and Orford.

The statewide property tax is supposed to have the same rate for everyone in the state, but doesn’t because property wealthy communities retain the excess money they raise to pay for their students’ adequate education, and unincorporated places have negative local education property rates to offset what they would pay in statewide education property taxes.

That ought to be enough to acknowledge the system is broken, but it isn’t for lawmakers who frankly lack the political will to fix the system so that it is more equitable — I didn’t say fair — for both students and taxpayers.

Students whose parents are fortunate enough to live in a property wealthy community receive a more robust education than do those students whose parents live in a property poor community.

Likewise the parents and other property owners in the property wealthy communities pay far less in property taxes than those in property poor communities do to educate their children.

Judging from the bills filed for the upcoming session, most of the offered solutions tinker around the current system’s edges.

One interesting bill from Rep. Walter Spilsbury, R-Charlestown, proposes raising the statewide education property tax rate to $5 per $1,000 of equalized evaluation, producing more than $1 billion for public education to provide about $10,000 per student.

Currently the tax assessed for the 2025 tax year is $1.12 per $1,000 and the current per pupil state aid is $4,266.

His plan would have exemptions and offsets that essentially would mean the bulk of the collection would be on second homes and non-residential properties.

His plan would be very helpful to property poor communities that should see a significant reduction in their property taxes, but residents in property wealthy communities would see a hefty increase in their property taxes.

But like several other plans that use the statewide property tax as the base solution, it is still a property tax, which is the most regressive tax in the state’s quiver of levies.

Property taxes are not tied to a person’s income or resources, which can go up or down, while it does not. In fact, the trend is for property taxes to increase as the state downshifts more and more of its financial responsibilities to local government, which lawmakers do every time they have trouble balancing their budget, like they do now.

One shortfall of the state’s current tax system is it no longer has any mechanism to tax an individual’s wealth growth since it repealed the interest and dividends tax last year.

The tax was largely paid by individuals with investment income at the top 10 percent..

The state business profits taxes 7.5 percent of companies’ profits with multinational conglomerates paying the largest share.

The largest source of funds from the business enterprise tax comes from its assessment on all compensation paid or accrued, and also from the amount of interest paid and on its dividends.

But like property taxes, the BET has to be paid whether a company makes money or not.

Wealth generated by individuals is not taxed in New Hampshire, but it is for businesses and that is what makes New Hampshire an outlier to most other states and why billionaires and millionaires — or the oligarchs — want to use New Hampshire as an example for the rest of the country.

That is why the Koch Foundation and other similar organizations have poured millions into state elections over the last decade to place libertarian leaning Republicans in the State House in sufficient numbers to run the place.

The slogans are no new taxes at any cost which means much of the cost of public education has been shifted more and more to local property taxpayers.

At the same time, these oligarch-backed libertarians put a more than $100 million obligation on funds reserved for public education in the Education Trust Fund through the Education Freedom Account program.

That is money that could otherwise be used for public education.

Coming into the next session, the Republican leadership does not want to do what needs to be done if the state’s public education system is to be made more equitable for both students and taxpayers.

State lawmakers need to find another source of money to bring the state’s obligation to local children and property owners in line with what other states pay and provide.

That is what the New Hampshire legislature does not want to do and has not wanted to do — both parties — since the first two Claremont decisions were released three decades ago.

It is not as though New Hampshire cannot afford to live up to its constitutional obligation to its children and its property owners, it is one of the richest per-capita states in the country, it does not have the political will to live up to that obligation.

Until enough lawmakers are elected with a backbone, nothing will change. The state’s medium age will continue increasing, fewer and fewer children will call New Hampshire home, and more and more young adults will leave for greater opportunities elsewhere.

Under that scenario, New Hampshire is not a sustainable state going forward.

Garry Rayno may be reached at garry.rayno@yahoo.com.