A bi-partisan coalition of House members is hoping to jumpstart the property tax debate at the Statehouse with a proposal that uses both a statewide property tax and a local income tax.
Backers of a new property tax plan that places a greater reliance on the income tax say their proposal creates a clear link between local spending levels and tax rates.
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They say their approach is needed because the state's current education financing system is much too complicated for anyone to understand.
"If we can get to a point where everyone is taxed in substantially the same manner, it becomes much easier to explain." - Rep. Oliver Olsen
Londonderry Rep. Oliver Olsen is the lead sponsor of the bill. He says one of the basic problems with the state's current system is that it's very hard to understand and does not provide a clear link for voters about their local tax rates and school spending.
"We want a system that is uniform in its impact on the taxes,” Olsen says. “So that is the guiding principle behind this system. If we can get to a point where everyone is taxed in substantially the same manner, it becomes much easier to explain."
Under this plan, Olsen says there would be a fixed and much lower statewide property tax rate – perhaps between a third and a half of the current rate. The remaining money would be raised using a local income tax that would be adjusted according to the per-pupil spending rate in the school district. Olsen says this creates a clear connection for taxpayers.
"The concept is very simply stated. Your variable income tax would be set based on your per-pupil spending within your particular district. So the more you spend on a per-pupil basis, the higher that education income tax would be. The less you spend, the lower it would be,” Olsen says.
Bristol Rep. Dave Sharpe, the chairman of the House Education committee, says he's intrigued by the plan but that a lot details need to be worked out.
"The concept is wonderful, but when you get into the details, it's get tough." - Rep. Dave Sharpe, House Education committee chairman
"So we're going to continue moving down that path, and I would love to bring one to the floor, but we have to find numbers that work in the bill.” Sharpe says. “The concept is wonderful, but when you get into the details, it's get tough."
Sponsors of the proposal say their bill will need at least two years of deliberation at the Statehouse. That's why they're also backing a plan to cap school spending for the next three years.
