New Hampshire law providing local property tax relief faces court challenge

New Hampshire voters last November overwhelmingly approved a state constitutional amendment aimed at providing tax relief for the state's homeowners. But state legislative leaders plan to try to negate that vote in court. The amendment prohibits the state legislature from requiring new or expanded programs or responsibilities for cities and towns unless full funding is provided by the state. New Hampshire residents pay local property taxes that are among the highest, per capita, in the United States. The new measure is similar to those on the books in several other states.

In the past, spending by the New Hampshire state government has been held down considerably by requiring local governments to fund new programs. That funding has come mainly through heavy property taxes.

Counsel for Speaker John Tucker of the New Hampshire House of Representatives and state Senate president Vesta Roy, who oppose the restrictions imposed by the amendment, say a formal suit will be initiated in the next few weeks. The legislative leaders argue that voters who supported the amendment were not aware of the impact it might have on the authority of state government.

But backers of the measure insist, says John Andrews, executive director of the New Hampshire Municipal Association (NHMA), that ``the people were fully aware of what they were doing.'' The impact of the amendment ``was fully discussed, with both pros and cons,'' in the news media in the weeks before the election, he says.

Speaker Tucker and Senate president Roy, both Republicans, suggest that the wording of the ballot question was confusing. They say no mention was made of the fact that its passage could force increased state taxes or prevent consideration of necessary programs to serve local residents.

They and others who want to invalidate the 237,045-to-99,172 referendum vote cite a 1967 ruling by the New Hampshire Supreme Court that negated a 1964 voter-approved constitution change providing for annual legislative sessions on grounds it was vague.

Defenders of the current measure say the wording on the November ballot ``was perfectly clear.''

Lawyer Richard Upton -- who was president of last summer's state constitutional convention, which endorsed the amendment -- says that, from a legal standpoint, ``prospects for overturning the vote are remote,'' since the wording of the ballot question was pretty much along the same lines as the amendment itself, only in question form.

Mr. Upton says he doubts there was voter confusion, since he has observed over the years that ``when people don't understand a question they tend to vote `N' [no] on it.''

He says it will be up to the courts to decide how to apply the amendment to specific situations.

The amendment's boosters concede that its passage could help spark eventual legislator interest in enacting some type of a broad-based state tax, such as a personal income tax. On the other hand, they suggest, that it might make senators and representatives less inclined to go for local mandates, if in the process they had to appropriate the funds to carry them out, rather than leaving that to municipalities.

A 1983 study by the NHMA disclosed there were more than 100 state laws mandating actions by local governments.

If the legislative leaders fail to persuade the court to wipe out the new constitutional amendment, a legislative move to repeal or substantially modify the measure is likely. That would take the support of three-fourths of all state lawmakers and the approval of two-thirds of electorate in the November 1988 state election.