Towns with tax caps can override them with simple majorities. Republicans want to change that.

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07-05-2025

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Some Republicans in Concord argue that the tax cap override is too easy to meet. And they're pushing for legislation to make it harder. (Getty Images)
Twelve years ago, residents in the town of Alstead were hit with sticker shock. In one year, property taxes had increased from $22.46 per $1,000 of valuation to $26.80, a 20 percent increase.
There was a reason: The select board had 'artificially' lowered the tax rate in the prior year with unassigned funds, recalls Joel McCarty, the current chairman — and it did not do so in the next year, causing the increase. But voters were unhappy and took matters into their own hands. At the 2014 town meeting, they voted to impose a tax cap on the select board, prohibiting the body from proposing any budget that would raise taxes by 3% or more.
Over the years, McCarty and the other select board members have followed the constraint when proposing budgets. And, over the years, Alstead residents have frequently overridden the limit at town meetings, approving warrant articles that raise taxes anyway.
'How often does this happen? Every single year,' McCarty added. 'And that's because our voters are wise and they understand that they are part of the process.'
This year, some Republicans in Concord argue that the tax cap override is too easy to meet. And they're pushing for legislation to make it harder.
House Bill 200 would require residents in towns that have tax caps to vote by a three-fifths majority — or 60% of a vote — to pass any appropriation that would put the town over its tax cap. Currently, those residents need only a simple majority to do so.
Supporters of the bill, which passed the House, 195-165, and is currently being considered by the Senate, say it would make tax caps more effective. They argue it is unfair that a town must get a supermajority vote to adopt a tax cap but can override it with a simple majority.
'A lot of constituents are shocked when they understand how a tax cap really works,' said Rep. Diane Pauer, a Brookline Republican, speaking to the Senate Election Law and Municipal Affairs Committee. 'It doesn't really do anything. So this bill seeks to put teeth in the tax cap.'
And proponents point to rising property tax rates across the state and argue that residents should have stronger tools to keep taxes under control. Some residents who might be hurt by tax increases might not be able to make it to town meeting to vote against them, and the supermajority threshold would require more community buy-in.
'Since the purpose of a tax cap is to restrain taxation, it is therefore reasonable to require a supermajority to override it,' Pauer said. 'And that also indicates that the voters support any increased spending.'
Currently, just six towns have passed tax caps. HB 200 would not apply to cities, which have their own statute dictating how they can add tax caps.
But among the towns with tax caps, some disagree with the supermajority proposal.
'Sounds like the Legislature doesn't have a lot of faith in the judgment of the voters,' said McCarty.
McCarty and other officials say the proposed supermajority requirement could create too high a burden for an override and could hinder residents' democratic power to control their own spending. To them, the supermajority requirement could block important purchases that fall outside the budget requirement but that a majority of residents support.
The New Hampshire Municipal Association has opposed the bill, arguing it legislates power away from voters.
'A tax cap is basically a limitation on the governing body members … it's not a limitation on the voters,' said Margaret Byrnes, executive director of the NHMA, in an interview. 'House Bill 200 turns that on its head by saying that the voters too have to go through extra hoops in order to override the tax cap.'
Tax cap wins and losses
Many cities, such as Manchester, Nashua, Dover, Rochester, and Somersworth, have tax caps. But they're rarer among towns. Before the 2025 town meeting, five New Hampshire towns had caps in place, according to records from the Department of Revenue Administration: Alstead, Litchfield, Middleton, Milton, and Nottingham.
This year, residents in some towns attempted to pass their own tax caps, to mixed results.
One town, Brentwood, passed a cap that prohibits the select board from proposing a budget that raises taxes more than 4% above the previous year — with 61% voting yes.
But in other towns, the effort fell short. Residents in two towns, Brookline and Mont Vernon, tabled their tax cap warrant articles. In Lancaster, 21% of voters supported the proposal; in Moultonborough, 9.8% supported it; and in New Boston, 46% did.
New Boston's tax cap proposal was defeated after the select board announced it had proposed a budget within a self-imposed 5% cap on increased spending.
The Municipal Association argues that if the Legislature is going to pass the tax cap voting threshold bill, it should add in a provision that requires those towns that have passed the tax cap to hold a new vote on whether they want to continue having one, with the new limits. The current bill does not require that and would apply to tax cap towns 60 days after passage.
'(We would advocate) for voters to be given the chance to say yes or no — whether they still want a tax cap in light of the changes,' said Byrnes.
The supermajority divide
Alstead voters frequently spend above the tax cap. They did it as recently as the 2025 town meeting.
'The selectmen stayed under the 4% cap, and the voters said, 'Well, you know, that's nice, that was a good effort, but we need to spend more money on the things that are important to us,'' McCarty recalled. 'And they wound up raising the tax rate by a slightly more than 8%.'
But in other towns with tax caps, residents appear happy with the limits.
In Nottingham, this year was the first that residents overrode their tax cap, according to Tim Dabrieo, chairman of the board of selectmen. The reason: a $10,000 appropriation for a town newsletter, passed through a warrant article.
'There's a lot of people in town that just aren't happy about any taxes,' Dabrieo said. '…The actual tax rate hasn't actually increased above inflation any year. But people feel (it) when they see an operating budget that's large and increasing every year.'
Middleton has had a tax cap for years, and Timothy Cremmen, the chairman of the select board, cannot recall a year that voters have voted to override it.
'We're able to fund most things,' he said. 'Sometimes it's a little tight, but certainly we're able to find a way to make it all work.'
The limit imposes healthy guidelines on the select board's budgeting process, Cremmen says, even if it often demands tough decisions on spending priorities.
'When we're trying to plan something out, that's when it gets tough trying to figure out,' Cremmen said. 'So, OK, we need money for road spending. We need money for the fire department. We need money for the police department, and we need to put together money for repairs on town hall.
'It's like constantly trying to pick who your favorite child is.'
Yet even though tax cap hasn't been an issue recently, Cremmen said he appreciates the current majority vote to override. It makes it easier for the select board to come to voters with a bigger spending proposal in the future. That kind of special request might become more necessary in the future, as towns absorb the loss of COVID-19 relief funding and broader federal and state funding cuts.
But a supermajority would be a higher bar to meet, especially in low-turnout town meetings.
'You need more people for it. And for most towns, you don't get a lot of people showing up, which means that you'll get a group of nine people showing up, making all decisions,' said Cremmen, speaking in his personal capacity and not as a representative of the board.
Pauer and other supporters of the bill have countered that the three-fifths majority threshold matches what cities must meet to set their tax caps. It also aligns with the required three-fifths threshold for a town to pass a long-term bond request.
During the Senate hearing, Sen. Tim Lang, a Sanbornton Republican, seemed sympathetic to that view.
'(It takes) three-fifths of people to establish a tax cap, and then only 50% plus one to override the tax cap. Do you think those ratios are appropriate?' Lang said.
But to McCarty, the supermajority requirement for bonding is natural because it binds the town and its voters for years into the future. The annual town budgets should be passed by majority votes, he said.
'You know what, our budgets are made locally, by a 50% plus one majority,' McCarty said. 'We've been doing that for 250 years now. What is driving anybody's idea that we should change that and make it more difficult for people to decide how to spend their own tax dollars?'