A controversial proposal to institute New Hampshire’s first statewide income tax in exchange for dramatically reduced property taxes sparked fierce opposition from both parties Tuesday, though supporters argue the plan would provide relief to struggling homeowners.
The “3-3 Tax Savings Plan” would establish a 3% income tax for all residents and a $3 tax per $1,000 of property value, according to advocates who presented the proposal in Concord. The plan aims to raise $2 billion annually for the state’s Education Trust Fund, allowing New Hampshire to increase base adequacy payments from the current $4,266 per student to $10,000, and special education funding from $2,185 to $25,000 per student.
Proponents argue this dramatic increase in state education funding would enable cities and towns to slash local property taxes, which have become a mounting burden for residents statewide.
“The idea behind the program is to spread the cost of education more widely and more fairly than we currently do, to make schools and housing more affordable,” said Andru Volinsky, a former New Hampshire executive councilor and gubernatorial candidate, according to the proposal’s supporters.
The plan includes significant exemptions designed to protect lower-income families. Individuals could exempt the first $35,000 of income, plus an additional $15,000 deduction for each dependent and another $15,000 for single parents. Renters would receive an additional $750 reduction, and the property tax would not apply to the first $250,000 of property value, according to the proposal’s details.
Rep. Thomas Oppel, a Canaan Democrat supporting the idea, said the proposal does not include formal legislation and will not be introduced as an amendment this session. Instead, he described it as an attempt to spark conversation about New Hampshire’s tax structure.
The plan directly challenges “the pledge,” a 50-year political tradition where candidates promise never to support broad-based sales or income taxes. New Hampshire remains one of eight states without an income tax.
Oppel argued that voter priorities have shifted since the pledge’s origins. “Every voter that I talked to, I would tell them I supported public education, I supported housing, I supported better health care,” Oppel said, referring to the 2024 election. “And the response from every single one of them was, ‘How are you going to pay for it?’”
He added that the plan would “make this case that this is an opportunity to cut your damn property taxes and have a fairer system in making the people with the least lower their burden, and the people with the most … pay their fair share.”
Rochester Mayor Chuck Grassie supported the proposal, saying a statewide income and property tax targeting higher-income residents could allow his city to access state funds for services rather than increasing property taxes for all residents.
The proposal has created a website, nhtaxsavingscalculator.com, allowing residents to estimate their tax burden under the new system, according to supporters.
Despite the advocates’ arguments about property tax relief, the plan faces significant political obstacles. Both Republican and Democratic leaders denounced the proposal Tuesday, according to the presentation’s aftermath.
The timing of the proposal comes as New Hampshire communities grapple with rising property taxes driven largely by education funding requirements. The current system relies heavily on local property taxes to fund schools, creating disparities between wealthy and poor districts.
Former Democratic state senator and gubernatorial candidate Mark Fernald joined other state Democrats in supporting the plan during Tuesday’s presentation.
The proposal represents a fundamental challenge to New Hampshire’s tax-free reputation, which has long been a cornerstone of the state’s economic identity and political culture.
