Final Actions Before Committees of Conference
Room and Meals Tax
The Senate Finance Committee voted to share 30% of the Room and Meals tax revenue with municipalities. In past years they shared a fixed $68.8 million. You will recall that the budget includes a reduction in the Room and Meals tax rate. This change will result in less Room and Meals tax revenue to share. Experts believe that 30% of a smaller base will still yield up to $31 million in additional revenue for municipalities. In an effort to make it easier to comply with state law, the legislature included an amendment to change state law to lower the current 40% requirement to 30%. The 40% requirement has been ignored for decades.
If they get away with this legislative change using the budget bill, we can expect in the future they will try the same thing with other state laws that require revenue sharing, but have been ignored.
Not wanting to put their members at risk for voting for a very unpopular bill, much less risking the bill would be defeated, Senate Republicans added “education freedom accounts” to the budget bill. These accounts, also known as vouchers, can be used to fund private education including religious schools and for home schooling. These schools are not required to meet public education standards. The NH Constitution clearly states that no person (read taxpayer) shall be compelled to pay towards the support of the schools of any sect or denomination. Part I Article 6. The sponsors get around this by saying the money is going into a scholarship fund. It is up to the student to decide which school to attend.
Retirement System Costs
Senate Republicans rejected an amendment to the budget that would restore 5 percent of the state’s share of employer retirement costs for teachers, fire fighters, and police. According to the New Hampshire Municipal Association, this decision will cost municipalities, read taxpayers, an additional $35.8 million in employer retirement costs in fiscal year 2022-23.