Former NH Official Urges Towns to Plan for School Tax Cap Vote

New Hampshire voters will decide on November 3 whether to limit how fast school districts can raise their share of local property taxes, a measure that would need 60% support to take effect, Taylor Caswell wrote in a column for NH Business Review.

Caswell, who most recently served as the state's commissioner of business and economic affairs, wrote that the measure would not freeze school spending or set a ceiling on the tax rate. Instead it would restrict annual growth in the amount a district collects, with allowances tied to price increases and newly taxable property. It would run for two years and would first apply to the 2027-28 school year, meaning budgets being drafted in October 2026 could be the first covered. Construction bonds, federal grants and donations would be exempt.

Towns are entering budget season with heating oil at or above $6 a gallon in the North Country and 30-year mortgage rates near 7%, Caswell wrote. He said New Hampshire towns drew 61% of their revenue from property taxes in 2022, and cited the NH Fiscal Policy Institute's finding that local property taxes account for roughly 45% of business tax burdens, against 29% in state business taxes.

Statewide school enrollment has fallen about 22% in two decades, from more than 205,000 students to roughly 160,000, while building and staffing costs remain, he wrote, arguing towns should pursue zoning changes, housing and water and sewer investment to broaden the tax base.

This story was first reported by NH Business Review.