Revealing the Roots: Transparency, Education Funding & Property Tax in New Hampshire
Executive Summary
A recent Facebook post from The Merrimack NH Local Politics Page raises a question tied to new legislation (LSR 2026-2337 / HB sponsored by Rep. Brian Labrie) and the broader debate over Education Freedom Accounts (EFAs). The post suggests that instead of vague claims that EFAs are driving up property taxes, lawmakers should require bills or legislation to clearly show how much or what percent of property taxes are funding EFAs.
LSR 2026-2337 would require municipalities to include pie charts, bar charts, and QR codes on property tax bills, showing how and where tax dollars are being allocated. (FastDemocracy)
This report examines:
- The background of EFAs in NH: how they work, past modeling, and controversies
- What is known so far about the impact of EFAs on property taxes
- What HB 2026-2337 would do, its potentials and limits
- How this compares with similar transparency or fiscal disclosure efforts elsewhere
- What is unknown — what data need to be gathered
- Policy recommendations
Background: EFAs, SWEPT, and NH’s Education Funding Structure
To understand the debate, one must first understand how public education is funded in New Hampshire, and what “Education Freedom Accounts” are.
The Statewide Education Property Tax (SWEPT)
- SWEPT is a state-imposed property tax, collected locally, designed to help fund the adequacy requirement for public education. (NHPR)
- Towns assess it at a uniform rate. The revenue goes into the Education Fund. Initially, municipalities that raised more than necessary (due to high property valuation) had to remit the excess. However, legislation changed, and now many municipalities keep excess SWEPT revenues. (NHPR)
- There has been litigation and constitutional scrutiny around SWEPT, particularly about whether the state’s system allowing wealthy municipalities to keep excess SWEPT flows violates uniformity or fairness. (NH Business Review)
Education Freedom Accounts (EFAs)
- EFAs are a voucher-/education savings account-style program giving eligible students in NH state funds to be used for private school, homeschooling, or other educational services. Originally income-based; recently expanded so that any child, regardless of income, is eligible. (InDepthNH.org)
- The program has an enrollment cap, oversight concerns (e.g. compliance, verification) have arisen. (InDepthNH.org)
Fiscal Modeling of EFAs
- The state has produced modeling (e.g. 2021) estimating potential savings or costs of the EFA program under different scenarios. (New Hampshire Department of Education)
- Key findings included that local taxpayers might see savings if fewer students attend public schools (less variable cost), while state taxpayers may bear increased costs depending on how the program is structured. (jbartlett.org)
- But estimates vary based on uptake rate, average cost per student, whether the EFA replaces public school attendance or not, and whether state funding shifts accordingly. (EdChoice)
What is LSR 2026-2337 / HB “requiring municipalities to produce pie charts, bar charts, and QR codes on property tax bills …”?
From FastDemocracy, this is the summary of LSR 2026-2337:
“requiring municipalities to produce pie charts, bar charts, and QR codes on property tax bills depicting where and how tax dollars are being allocated.” (FastDemocracy)
- Sponsor: Brian H. Labrie (R-Hillsborough 2) (FastDemocracy)
- Status (as of the snapshot): introduced, but no full text or votes yet publicly available. (FastDemocracy)
What the Bill Aims To Do
- Transparency: Add visual elements (pie charts, bar charts) and digital access (via QR codes) to show property taxpayers exactly how their tax dollars are being spent.
- Municipal-level property tax bills would include breakdowns of allocations (e.g. school, municipal, county, state, etc.), presumably including the portion that funds EFAs, if coded in the budget.
- Make it easy for taxpayers to see “where and how tax dollars are being allocated.” (FastDemocracy)
What It Does Not (Yet) Seem To Do
- The summary doesn’t specify which categories must be broken out. Would it require identifying EFA-funded expenditures separately from general school district or public education funding? Possibly, but not explicitly.
- It doesn’t specify the level of granularity or thresholds — e.g., must show actual dollar amounts or percentages, or just broad categories.
- It does not appear (from the summary) to set consequences or penalties for mis-reporting, or standardization across municipalities.
- No clear articulation of who bears cost or burden of implementing charting / QR codes. (Municipalities will have to produce new visuals, possibly redesign bills, etc.)
Connecting the Facebook Post: “How much / what percent” EFAs are raising property taxes
The Facebook post raises a concern: people hear that EFAs are increasing property taxes, but lack specific figures. The post suggests either attaching something to this HB (or a separate bill) that would clearly denote what part of property taxes are funding EFAs.
This ties in with LSR 2026-2337: the transparency bill could provide part of that answer, depending on how it’s implemented. But there are complications.
What is Known About EFAs’ Impact on Property Taxes
Reviewing existing data and modeling:
- State vs. Local Cost Shift
- EFAs draw from state funds (or appropriated education funds). If a student moves from public school to an EFA, the public school district may see a decline in enrollment, decreasing its costs (but likely only the marginal cost, not fixed costs). If state funding does not fully offset those costs, local property taxpayers might have to fill gaps. (jbartlett.org)
- On the other hand, the state’s obligations increase, meaning budgetary pressure could lead to cuts elsewhere or increased state tax revenue requirements. But the main worry in public debate tends to be about rising local property taxes.
- Modeling Outcomes Are Mixed
- A report “The Fiscal Effects of Expanding New Hampshire’s Education Freedom Account Program” projects both state taxpayer costs and local savings under expansion scenarios. Local savings result when fewer students use expensive public services or when districts reduce variable costs. (EdChoice)
- But such models depend heavily on assumptions: how many students choose EFAs, how public school fixed costs are treated, whether the district can adjust operations to lower enrollment, etc.
- SWEPT’s Role & Excess Retention
- SWEPT contributes to education funding through property taxes. Its uniform rate is supposed to help ensure adequacy. But its excess retention by wealthier municipalities means those municipalities sometimes raise more via SWEPT than they strictly need, adding complexity to measuring “who pays what” and “who benefits.” (NHPR)
- Empirical Data Lacking So Far on Actual Property Tax Increases Tied Directly to EFAs
- As of now, there’s no clear publicly available data showing exactly how much of a given property tax bill—or what portion of the rate—can be attributed to EFAs in any municipality. Many reports model hypothetical or projected effects, but actual post-implementation data is scarcer.
The Potentials & Limitations of HB 2026-2337 in Addressing Transparency
Given the above, how well could LSR 2026-2337 help answer the question the Facebook post raises? What are its strengths, what might limit it, and what unintended consequences may arise?
Strengths
- Increased Public Awareness & Understanding
- Visual breakdowns (pie, bar charts) are powerful in helping taxpayers see at a glance how their tax dollars are allocated. This could improve trust and reduce confusion.
- QR codes could link to more detailed information (e.g. municipal budget document, EFA expense line items, comparative data).
- Pressure for Accountability
- Once transparency is required, citizens, media, and advocacy groups can more easily spot how much is being spent on EFAs, how that lines up with budgets, etc.
- It may lead municipalities to more clearly distinguish line items in their budgets, or improve reporting to satisfy public expectation.
- Potential to Inform Policy Debates
- Data made public could be used to refine future legislation — for example to adjust EFA funding levels, to adjust the share paid by state vs local entities, or to reform SWEPT’s structure (especially regarding excess retention).
- Standardization Across Municipalities
- If implemented well, this could standardize how property tax bills look statewide, making comparisons easier.
Limitations / Risks
- Granularity & Definition Issues
- If the bill only requires broad categories (municipal, school, county, state), EFAs might be lumped under “school” without being separately identifiable. So you may not see the specific EFA cost or portion.
- EFAs are administered at the state level, but their effect on local budgets varies. The bill may not require local‐line items connected specifically to EFAs, unless legislators decide so.
- Causation vs. Correlation Issues
- Even if residents see that “X%” of their tax bill goes to schools, that doesn’t automatically tell them how much of that is due to EFAs, because many factors influence school costs (inflation, staffing, capital projects, etc.).
- Implementation Costs & Burden
- Municipalities will need to adapt their tax bill formatting, software, staff time, possibly pay for design and printing changes. Small towns with limited budgets may find this burdensome.
- There may be resistance if the disclosures create political tensions or are perceived as criticizing local spending.
- Timeliness of Data
- Budget figures or allocations might lag in terms of what is included on the tax bill. If the data is based on older budget cycles, it might not reflect current or actual spending, which could mislead.
- Legal / Legislative Gaps
- Without a requirement that specific line items (like EFAs) be separately reported, just visual breakdowns may not suffice. Also, if no penalties, compliance may vary.
Comparisons & Precedents
To see what this kind of transparency requirement could look like, it’s helpful to examine what similar provisions have done elsewhere (either in NH or in other states).
- NH’s Local Option Tax & Budget Caps: New Hampshire recently passed laws strengthening local taxpayer protection, including laws that allow towns to adopt local budget and tax caps, with higher thresholds for overrides. (NFIB – NFIB Small Business Association)
- SWEPT transparency: There is some existing reporting on how much education funding comes from state aid vs local property tax, pie-chart style graphics in some state documents. For instance, NH’s “State Aid to School Districts vs. Municipalities” publication uses pie charts to show relative funding sources. (New Hampshire Municipal Association)
- Other States: Some states require property tax bills to show the percentage of the bill attributable to various services (schools, fire, municipal, etc.). These often help citizens see, e.g., how much of their tax goes to schools vs roads.
- EFAs / Voucher Programs Transparency: In states that have voucher or ESA (education savings account) programs, one common critique is lack of detailed reporting on who is using vouchers, how much is being spent, and whether public school districts see reduced resources. That has led to some states tightening oversight, data reporting, and fiscal impact analyses.
What the Evidence So Far Suggests About EFAs & Property Tax Increases
Putting together modeling, public statements, and current fiscal data:
- The expansion of EFAs to all students, regardless of income (via SB 295, for one), is expected to increase state expenditure significantly. (InDepthNH.org)
- Local savings are possible, but only to the extent public school districts can reduce variable costs (teachers, supplies, etc) with declining enrollment. Fixed costs (buildings, maintenance, debt, etc.) are less flexible.
- There is concern, expressed in testimony (e.g. from educators’ unions), that EFAs may result in local property tax bills increasing if public schools lose enrollment but must maintain infrastructure or staff levels. In that case, fewer taxpayers are sharing the fixed cost. (nh.aft.org)
- Some modeling shows net savings for NH taxpayers overall, but these depend on assumptions which may or may not hold. Therefore, real impacts may diverge. (EdChoice)
What We Don’t Yet Know – Critical Data Gaps
The Facebook post’s core complaint — “how much / what percent” of property tax is funding EFAs — is legitimate. To supply a credible answer, we need:
- Line-item Reporting: Municipal budgets that explicitly show amounts paid into the EFA program, or what portion of state appropriations tied to EFAs reduce public school expenditures.
- Actual uptake data by town: How many students in each municipality are using EFAs, how those students were funded previously (public, private, homeschool), the per student EFA allocation.
- Public school district cost structures: What parts of the cost are variable vs fixed; how public school budgets shift when enrollment declines due to EFAs.
- Effect on SWEPT revenues: Because SWEPT is collected via property taxes, but state formulas for adequacy and how excess is handled influence how much property taxpayers pay net. If SWEPT revenues go up because of general tax rate increases, or because EFAs cause shifts in state aid / public school costs, that needs to be understood.
- Comparative data across municipalities: Because property wealth, enrollment, public vs private school participation, local cost of services etc. vary, the impact of EFAs will differ by town.
- Temporal data: Pre- vs post-EFAs expansion comparisons, to observe actual tax rate changes, school budgets, etc.
How HB 2026-2337 Might Help Close These Gaps — But Alone It May Not Be Enough
HB 2026-2337 (LSR 2026-2337) has potential to significantly increase transparency. But whether it fully addresses the question depends on:
- Whether EFA expenditures (or state payments equivalent) are included as a separate category in the charts.
- Whether the pie/bar charts show the breakdown by “public school funding vs EFA / voucher payments,” not simply “school” broadly.
- Whether QR codes link to detailed municipal / state budget documents with adequate detail.
- Whether there is standardization (so that municipalities use consistent categories, time-frames, definitions) so one town’s “school spending” is comparable to another.
- Whether the law stipulates timeline, auditing, enforcement, so that disclosure is accurate and timely.
If properly written, the bill could require what the Facebook post asks: a clear percentage or dollar figure of EFAs’ share of property tax cost.
Potential Downsides or Trade-Offs
Besides the limitations noted, some additional trade-offs include:
- Overload of information: If property tax bills become too crowded with charts, small print, and links, some taxpayers may find them confusing rather than clarifying.
- Misinterpretation: Without proper explanation, someone might see a large percentage for “school” and assume all of that is for EFAs, or the inverse, misassign blame.
- Cost of implementation: For smaller towns with limited staff / budget, creating charts and QR code infrastructure (design, printing, data collection, verification) could require money, which might be passed to taxpayers.
- Delayed or inaccurate data: Because some budget/expense data may lag, or be based on estimates, the figures presented might not reflect final or audited costs, leading to confusion or disputes.
- Political misuse: Transparency often opens the door to political narratives; minor discrepancies or nuance could be spun as malfeasance.
Recommendations & What Could Be Added / Adjusted
To ensure HB 2026-2337 fulfills its promise and answers the public’s concerns, here are policy recommendations:
- Include EFAs as a distinct line item
- The legislation should explicitly require that “Education Freedom Account expenditures” or “voucher / alternative education payments” be pulled out as a separate category on property tax bills or associated reports.
- Require both dollar amounts and percentages
- Tax bills should show how many dollars and what percent of the total tax bill go to each category (school district operations, capital, EFAs, municipal services, county, debt, etc.).
- Standardized definitions & categories
- Establish uniform chart categories (e.g. “Public School Operations,” “Public School Capital / Debt,” “EFAs / Vouchers / Alternatives,” “Municipal Services,” “County Services,” “State Education Tax (SWEPT),” etc.)
- Link to detailed budget documents
- The QR code should ideally link to a municipal website or state site that publishes recent audited budgets, enrollment data, EFA usage data, and explanatory narrative.
- Require audited / certified data
- To ensure accuracy, municipalities should use audited or certified budget numbers rather than rough estimates.
- Phased implementation or support for small towns
- Given the potential cost / burden, perhaps provide technical assistance or shared resources for municipalities with limited capacity.
- Monitor & evaluate outcomes
- After implementation, track whether taxpayers feel more informed; track whether school district budgets, local tax rates, or municipal behavior change; see actual EFAs’ share of tax bills over time.
Drafting an Answer to the Facebook Post’s Suggestion
The Facebook post suggests: “Instead of indicating that EFAs are raising your property taxes without any concrete information … why not create another piece of legislation that will clearly denote the part of your property tax that is funding EFAs?”
HB 2026-2337 could be that “another piece” if amended or interpreted to include EFA-specific allocations. If not, additional legislation could be needed.
In other words:
- HB 2026-2337 is a step in the right direction toward transparency.
- But to satisfy the post’s recommendation fully, it must ensure that EFAs are separately shown, with actual numbers/percentages, not just wide categories.
Case Study: What Transparency Might Look Like
To give a sense of how this could look in practice, imagine a $4,000 property tax bill. Under a well-designed version of HB 2026-2337, the breakdown might read:
| Category | Amount | Percent of Total |
|---|---|---|
| Municipal services (roads, police, etc.) | $1,200 | 30% |
| Public School Operations | $1,100 | 27.5% |
| Public School Capital / Debt | $400 | 10% |
| SWEPT (state education tax) | $300 | 7.5% |
| EFAs / Alternative Education Payments | $200 | 5% |
| County Services | $300 | 7.5% |
| Miscellaneous (library, etc.) | $500 | 12.5% |
And a pie chart or bar chart would visually depict these, maybe with “EFAs” highlighted. The QR code could take you to a web page with backing documentation: number of EFA users, cost per student, etc.
Conclusions
- The push for transparency is warranted. Taxpayers deserve concrete information about how their property tax dollars are being allocated, especially as EFAs become a larger part of educational funding.
- HB 2026-2337 has real potential, but whether it delivers depends heavily on the details: whether EFAs are separately identified, whether the data are current and accurate, and whether there’s standardization across towns.
- Current modeling suggests mixed effects of EFAs on property taxes — some local savings are possible, but many variables could make taxes increase, especially in places with high fixed school costs or low property valuation.
- To satisfy what the Facebook post desires, the transparency bill must be crafted (or amended) to clearly show how much / what percent of property taxes go toward EFAs.
References
- Education Freedom Accounts modeling & fiscal effects — NH DOE, Analysis of SB-130 EFA Program (jbartlett.org)
- State Aid & Revenue Sharing — New Hampshire Municipal Association “State Aid to School Districts vs. Municipalities” (New Hampshire Municipal Association)
- Supreme Court decision about SWEPT excess retention in municipalities (NH Business Review)
- Expansion of EFAs to all students regardless of income (SB 295) (InDepthNH.org)
- Legislative tracking of LSR 2026-2337 — FastDemocracy (FastDemocracy)
- Public testimony & criticism around voucher / EFA programs and property tax implications (AFT-NH etc.) (nh.aft.org)
