NH Taxpayers Rejoice . . . Local Tax Caps are Legal Again

The Union Leader reports that Gov. Lynch has signed SB2 which allows for local tax caps . . . New Hampshire taxpayers rejoice!

Manchester’s tax cap, rejected by the New Hampshire Supreme Court in early 2010, is back in place.

Gov. John Lynch signed a bill Tuesday that clears the way for cities, towns and school districts to adopt caps on local tax increases, and restores caps that may have had legal problems.

Senate Bill 2, which took effect immediately, states that any tax cap that voters elected to make part of their charter is now valid, whether or not it was legal to adopt the cap at the time it passed.

The bill gives communities clear guidelines and greater leeway in adopting the caps. It also allows caps to be exceeded with supermajority votes of the local governing body . . .

SB 2 does not set out a specific percentage of votes needed to exceed a cap. Instead, it allows communities and school districts to choose the level, which is most often either a two-thirds majority or of a three-fifths majority.

The new law sets out the wording that a ballot question on a local tax cap must contain. It allows voters to decide whether to cap annual tax increases by a certain percentage or by a dollar amount.

The cap must be adopted by a three-fifths majority — 60 percent of voters — to take effect. Manchester’s cap passed by a narrower margin, gaining 54.4 percent of the vote.