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New Hampshire typically ranks among the wealthiest and healthiest states in the country, but, according to gubernatorial candidate Jackie Cilley, the Granite State boasts one distinction that isn’t as complimentary.
In a candidate forum last week in Nashua, Cilley, a former state senator, took aim at New Hampshire’s tax structure and, specifically, the property tax, which she claimed ranks among the nation’s highest.
"We have the third highest (property tax) in the country," Cilley, a Barrington Democrat, told the audience gathered Monday, July 16, 2012 at Nashua City Hall.
"That is not the way to fund a government," she said.
On its face, the claim seems feasible. New Hampshire is one of nine states in the country without an income tax. The Granite State is one of five without a statewide sales tax, and it’s one of only two, along with Alaska, without either.
This leaves New Hampshire legislators leaning heavily -- too heavily, according to some -- on property taxes as a revenue source. But are the Granite State’s property taxes really the nation’s third highest? We decided to look at the numbers.
Currently, New Hampshire is one of 37 states to charge property taxes at both the state and local level.
Because the local taxes vary from town to town or county to county, it’s difficult to identify a total state property tax rate. Instead, tax analysts determine property tax rankings based on the average amounts collected from each taxpayer.
And, based on 2009 data -- the most recent available -- New Hampshire property taxes do rank among the country’s highest.
In 2009, the U.S. Census reported the state raised about $3.2 billion in total state and local property taxes, which ranked 42nd among the 50 states. But when you spread that among all New Hampshire residents, it works out to $2,424 per person, according to calculations by the Tax Policy Center, a collaboration between the Urban Institute and the Brookings Institution.
That figure places the state third on the list -- behind only Connecticut, which averaged $2,498 per person in 2009, and New Jersey, which averaged $2,671 per person, according to the policy center.
Numbers reported by the Tax Foundation differed slightly, showing New Hampshire’s average property tax bills at $2,440. However, that figure also ranked the Granite State’s property taxes as the third highest in the nation, also behind Connecticut and New Jersey.
These rankings may show Cilley’s claim to be on track, but they don’t tell the whole story behind New Hampshire’s tax structure, analysts said.
To paint a fuller picture of the Granite State’s tax climate, voters should consider all the state and local taxes, according to Kim Rueben, a senior fellow at the Tax Policy Center.
Based on the same 2009 Census data, New Hampshire ranked 23rd that year among states in terms of total local and state taxes, charging taxpayers an average of $3,765 per person, according to the center.
Comparing that average to per capita income, state taxpayers pay about 8 percent of their income in taxes, according to the Tax Foundation ranks the Granite State 44th in the country in percent of income paid, meaning people in 43 states pay more of their earnings in taxes.
"Property tax may be high (in New Hampshire), but there aren’t many other taxes, so the overall tax burden is pretty low," said Nick Kasprak, a Tax Foundation analyst.
"I generally find it misleading to just rank based on a specific tax," added Rueben, of the Tax Policy Center. "New Hampshire will have high per capita property tax because it doesn't really have sales or income taxes."
Cilley’s claim that New Hampshire has the nation’s third highest-property taxes is spot on. Using Census data, the leading tax advocacy organizations show that New Hampshire ranks third, behind only Connecticut and New Jersey, in property tax charges. It’s worth noting, though, that Cilley does not paint a full picture of the Granite State’s overall tax landscape. Looking at overall tax burden, New Hampshire residents fund the government with a relatively low percentage of their incomes in comparison to other states. We rate this statement True.
Note: The original number reported for New Hampshire's total state and local property taxes was incorrect and has been changed.
Tax Policy Center, State & Local Finance Data Query System, July 18, 2012
E-mail interview with Kim Rueben, senior fellow with the Tax Policy Center, July 18, 2012
The Tax Foundation, State and Local Property Tax Collections Per Capita by State, Fiscal Year 2009, February 16, 2012
The Tax Foundation, State-Local Tax Burdens and Ranks by State, 2009, February 23, 2011
Interview with Nick Kasprak, an analyst with the Tax Foundation, July 18, 2012
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