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Ballot Question: Amend the Constitution to Ban Income Tax?

One of House Speaker Bill O'Brien's priorities goes to voters. But can it win 2/3 support?

The income tax, the third rail of politics in New Hampshire, is melted into the Election Day narrative.

The first question on the ballot Tuesday asks voters if they favor amending the Constitution to ban a state income tax.

Voter approval must be by a two-thirds margin, a high threshold in any election, let alone a cliffhanger of a presidential election year like this one.

Supporters and critics have slowly sounded off on the subject. Kevin Smith, after losing the Republican gubernatorial primary, continued to campaign in favor of the proposed income tax ban, what he calls "enshrining" the state's tax advantage into the Constitution. Others, like the New Hampshire Fiscal Policy Institute, have argued against it.

Then there are folks like Grant Bosse, lead investigator of the Josiah Bartlett Center for Public Policy, who wonder about the true arc of this particular political football.

"If this passes," Bosse said in an interview, "Republicans lose their best issue."

One need not look further than the fall campaign to see his point: Republican candidates routinely claimed their Democratic opponents, even in federal races, were lusting for a state income tax.

Even as Maggie Hassan took The Pledge to veto an income tax if elected governor, Ovide Lamontagne never let up on the issue.

The party line flashed in neon during the final roll call votes on the ballot question back in June. Only three Democrats in the Legislature–Sen. Lou D'Allesandro, Rep. John Gimas and Rep. Peter Ramsey, all three from Manchester–voted to send the issue to the voters.

House and Senate leaders easily shepherded the question through the Legislature, not just because of their big GOP majorities. House Speaker William O'Brien (R-Mont Vernon) and former Majority Leader D.J. Bettencourt (R-Salem) were among the eight sponsors of the question, known as Constitutional Amendment Concurrent Resolution 13, or CACR13.

The other sponsors were: Reps. Paul Mirski (R-Enfield), Ken Weyler (R-Kingston) and Daniel Tamburello (R-Londonderry), and Sens. Jeb Bradley (R-Wolfeboro), Chuck Morse (R-Salem) and David Boutin (R-Hooksett).

The legislative debate on CACR13 mirrored past sessions, and recounted the pros and cons of taxation in the state since Republican Mel Thomson defeated Gov. Walter Peterson in the early 1970s, and created what has become known as The Pledge to oppose a new broad-based tax in the state.

Rep. Keith Murphy (R-Bedford), in the legislative record on the amendment 10 months ago, noted that sponsors carefully chose the language to forbid only new taxes on individual income (ie, the interest and dividends tax would not be affected) and ensure New Hampshire remains one of nine states without a general personal income tax. In the House calendar on behalf of CACR 13, Murphy wrote: "Opponents claim that we must not tie the hands of future legislatures, but in reality that is exactly why constitutions and their incorporated amendments exist: to restrict governments from infringing upon the rights of the people."

In that same calendar, Rep. Mary R. Cooney (D-Plymouth) in a Minority Report, warned that the language would freeze the state's tax system in time, with "devastating consequences to the state's economy and government."

She wrote, "Because this amendment is worded so vaguely, it would generate numerous expensive legal challenges. This amendment guarantees ever-increasing property taxes, vanishing businesses, and fleeing citizens. It will return us to the time 50 years ago when New Hampshire had the worst economy in New England."

Weyler, one of the amendment's co-sponsors, spoke of incorporating stability into state government and its revenue forecasting. An income tax, he argued, is subject to volatility. More than anything, he said, it is an issue that should be decided by the people.

Candidates for state office have, in recent years, acknowledged public opinion polls that indicate New Hampshire residents have no desire for a state income tax. The House and Senate did pass an income tax bill, which existed briefly until dying in the House back in 1999, leading the dean of the Statehouse press corps to write a little something about pigs flying and hell freezing over.

One of the authors of that bill, former state senator and gubernatorial candidate Mark Fernald, noted in an interview that the goal was to raise revenue to help pay the state's obligation for public education. After the income tax bill failed, the Legislature and governor went with a statewide property taxes, contributing, Fernald believes, to soaring property tax burdens in New Hampshire.

Fernald does not expect voters will approve CACR13 on Tuesday. And, he added, "I'm not sure Republicans think it will pass."

Even before the constitutional question goes to voters, some lawmakers were preparing to debate it in this upcoming session. There are at least two legislative requests for an income tax bill.       

Here is Question 1 as it will appear on the Ballot on Nov. 6:

 “Are you in favor of amending the second part of the constitution by inserting after article 5-b a new article to read as follows: [Art.] 5-c. [Income Tax Prohibited.] Notwithstanding any general or special provision of this constitution, the general court shall not have the power or authority to impose and levy any assessment, rate, or tax upon income earned by any natural person; however, nothing in this Article shall be construed to prohibit any tax in effect January 1, 2012, or adjustment to the rate of such a tax.”

(Passed by the N.H. House 256 Yes 110 No; Passed by State Senate 19 Yes 4 No) CACR 13 Yes/No

Jeff Smith November 06, 2012 at 12:36 PM
I like question 1. Tying the hands of goverment is not a bad thing. Rarely does goverment think it needs less money and power. Checks and balances are great when they exisit, but that is not allways the case in goverment. There have been more than a few times that all three branches were held by parties with the same intent, locally and somewhat recently nationally.
J Hurley November 06, 2012 at 03:41 PM
Question 1: Please vote YES for the ban on income tax. I pay a hefty property tax and it is the price I am willing to pay to choose to live in this beautiful state. I think to penalize someone for working with an income tax is absurd. If you don't like the property tax go back to where you came from. Question 2: Please vote NO to keep the wise constitutional separation of branches (judicial and legislative) Question 3: Vote NO. I see no glaring issues to take the time and money for this venture at this time. We can revisit it in the automatic 10 year review. Or, guess what, if something does come up, we are a free state and, lets continue to be a free country, and we will fix it when it needs fixing.
Debra W November 06, 2012 at 03:56 PM
Want to be stuck with HIGH PROPERTY TAXES--Vote NO ON QUESTION #1 Question 1 specifically allows any tax already in place to stay in place, and provides that they will not be impacted by this amendment language. Also, though not currently in place, this amendment would NOT prohibit a sales tax in New Hampshire. Spending and revenue to match will always be a controversial subjects. As well they ought to be in a republic like ours. But let’s agree that at times in the future the legislature will need to increase revenues to suit the needs of the day. To what sources might they turn, if an Income Tax is 100% off the table? Hate seeing your property taxes always go up – wish there were a more equitable way to spread the cost of government, education, services? VOTE NOT ON QUESTION 1.
Seamus Carty November 06, 2012 at 04:16 PM
People have seen what happens when a new tax is introduced with the intention of reducing some other tax. CT tried this and the total taxes paid went up. NH is fine the way it is and voting yes will help it stay that way..
Super Fun Size November 06, 2012 at 04:42 PM
Ct must have hated all those hedge funds moving to their state because of their 4% investment income Maximum tax.....

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