Time to Shift Gears: Stop Downshifting Costs Onto New Hampshire Property Taxpayers

New Hampshire has a property tax problem.

For too long, we have treated rising property taxes as if they were simply the result of decisions made at town meetings and school deliberative sessions, but that is only part of the story. Every year, school boards, select boards, and voters are asked to make difficult choices. We debate staffing, programs, roads, public safety, libraries, and other services. When the tax rate goes up, those local officials are often the ones who hear about it.

But not every cost on a local property tax bill originated with a local decision. Some costs are the result of federal and state funding decisions. Some are the result of state mandates. And some are costs the state once helped pay but later shifted to local governments.

That is downshifting.

A recent analysis by the New Hampshire Municipal Association estimated that, between 2015 and 2025, approximately $2.1 billion in school-related costs and another $900 million in municipal and county costs were shifted onto local governments. The school-side estimate includes reduced state education aid, special-education funding shortfalls, charter tuition costs, and other costs borne locally. That's roughly $3 billion in costs over a decade that local governments and school districts have had to absorb.

That does not mean every dollar of every property-tax increase is the state's fault and it certainly doesn't mean every local budget decision was necessary, efficient, or worth it. It means something much simpler: When Concord pays less or requires more, someone else still has to pay the bill…and that someone is usually the local property taxpayer.

Education: when the state contribution doesn't keep pace

The State of NH has a constitutional obligation to fund an adequate education, and to attempt to accomplish this, the Legislature sets the state's adequacy formula and determines how much state funding follows each student.

Unfortunately, the state's contribution only covers only a fraction of the actual cost of educating a child. The base adequacy grant remained at $3,450 per pupil for much of the 2010s before gradually increasing to the present rate of $4,182. Keep in mind, the tuition bill for a single Deerfield high school student is about $22,000, so the base adequacy aid covers about a fifth of the tuition cost. You and I cover the rest.

I’m not necessarily saying the state should pay every dollar of a school's budget. However, when the state determines what it will contribute toward an obligation, the rest of the costs don’t disappear, they just become the responsibility of local taxpayers.  

The same dynamic exists with special education. School districts are legally required to provide services to eligible students, so even when the state Special Education Aid fund has a shortfall of $27 million, children still needs services and schools still have to provide them. When the state doesn't cover its share, the local property taxpayer makes up the difference.

Retirement costs were shifted to local government

For decades, the state contributed toward the employer retirement costs of teachers, police officers, firefighters, and other public employees, but beginning in 2010, the state reduced its contribution. It was reduced again in 2011 and eliminated entirely by 2013.

The result was not that retirement costs disappeared. The costs shifted. They moved into municipal and school district budgets, and once they're in those budgets, they become part of the property-tax equation. The costs may have disappeared from the state budget, but they became a big expense for property tax owners.

We need to shift gears, not just shift costs

Instead of constantly shifting costs from Concord to communities or telling communities to cut services and do more with less, we should use the resources and scale of state government to help communities lower the cost of delivering those services. That means using the things the state is uniquely positioned to provide: purchasing power, coordination, data, expertise, and the ability to establish reasonable statewide standards.

Shift gears: make better use of state purchasing power.

A small municipality or school district doesn't have the same negotiating leverage as the State of New Hampshire.

Why shouldn't we use that leverage when it can save taxpayers money? New Hampshire already has some of the infrastructure for cooperative purchasing, but we aren't making enough use of it. In 2026, legislators proposed creating a dedicated school cooperative-purchasing program that would have directed the state to solicit competitive bids for major school expenses such as transportation, food, curriculum materials, textbooks, and heating fuel. That proposal did not become law. The opportunity now is to build on the purchasing mechanisms we already have and make them easier and more useful for schools and municipalities.

Potential areas include:

• transportation;

• food services;

• curriculum materials;

• heating fuel;

• technology; and

• other significant school expenses.

Health insurance is another enormous expense for schools and municipalities. Instead of expecting every district to solve the problem independently, we should examine whether state-level purchasing power or larger cooperative arrangements could provide more affordable options while maintaining quality coverage. This doesn't mean forcing every employee into one plan. It means asking whether we can use economies of scale to lower the cost of providing good benefits.

Shift gears: put reasonable guardrails around high-cost services

Some services purchased by schools and municipalities are highly specialized, with limited providers and little negotiating leverage for an individual district.

Special education is a great example, as NH already uses state-established rates for certain private special-education services, which is a mechanism for establishing reasonable reimbursement levels rather than leaving each district to negotiate independently. We should look for other areas where similar approaches could make sense.

It’s time to recognize that schools and municipalities deserve a fair, predictable price when taxpayers are footing the bill.

We don't need a new broad-based tax to do it

My goal isn't to replace the property tax system or add a new broad-based tax. Granite State families are already struggling with the cost of living, and adding another tax isn't the only way to address our fiscal challenges. But neither is simply telling towns and schools to always cut more and do more with less.

There is another option: make government work differently.

It's time to elect representatives who are willing to do the hard, creative work of finding new ways to lower costs, not just tell schools and towns to spend less.  We don't need representatives who simply promise to cut. We need representatives who will find solutions.

Stop shifting the bill. Start shifting the way we do business.