If we have a new tax to help pay for public education, how do I know my property taxes will go down?
Answer: The property tax rate for your town is not set in your town. It is determined in Concord. The property tax rate for each town actually consists of four tax rates: The municipal tax; the local school tax; the county tax; and the statewide property tax.
In the spring, each town adopts a budget at town meeting. The town also determines the value of taxable real estate in town. Finally, the town determines how much of its budget will come from federal or state funds, and how much must come from the property tax. The State sets the municipal tax rate for each town so that it raises exactly the amount needed to fund the part of the town budget that comes from the property tax.
A similar process is used to determine the school tax rate, based on the school budget; and to determine the county tax rate, based on the county budget.
If we adopt a new state tax to fund the schools, and the state doubles its K-12 funding, the amount needed to be raised by the property tax goes down by the amount of the new State funding. The property tax rate is reduced automatically.
Similarly, if the legislature voted to increase State revenue-sharing funds for the cities and towns, the municipal tax rate would go down automatically, because more of the budget would come from State funds, and less would come from the property tax.