This bill seeks to overhaul the funding mechanism for education by replacing the statewide education property tax (SWEPT) with a local revenue contribution from political subdivisions. The new legal language introduced in RSA 198:38 defines "local contribution" as the lesser of the state education property tax warrant for the tax year beginning April 1, 2025, or the cost of providing an adequate education. The bill mandates that local revenue used for education must meet or exceed this local contribution amount, while also modifying the calculation of education grants for municipalities to reflect this change. Additionally, it allows for local education taxes in the 2026 tax year to be based on the combined state and local education property taxes from 2025.

Furthermore, the bill repeals several existing laws related to the education tax and the Low and Moderate Homeowners' Property Tax Relief program, with these changes taking effect between July 2025 and January 2027. The fiscal impact is notable, with an estimated annual decrease in state revenue of approximately $363 million and a reduction in local revenue of about $29 million. The legislation aims to shift the financial responsibility for education from the state to local municipalities, while also eliminating the L&M Relief program, which previously provided around $1.1 million in relief during FY 2024. Importantly, the proposed changes are not expected to incur additional administrative costs for the relevant state departments.

Statutes affected:
Introduced: 198:38, 198:41, 32:b-5, 76:15-a, 76:15-, 76:3