Sharing the Common Burden: New Hampshire and Public Services

Full Report (PDF)

Executive Summary

This paper combines information on appropriations and revenues at the four levels of government in New Hampshire – state, county, town and local education – and is designed to give a comprehensive picture of public services in the state, a profile of where the burden of funding these services lies, and how it is changing over time.

Over the last 5 years, this analysis suggests that the local property tax bears an increasing share of the costs of public services in New Hampshire at the municipal and county levels. At the State level an increasing share of appropriations are funded through the federal government. In a subsequent paper, the Center will look at developing an overall estimate of the degree to which financial responsibility for all public services is shifting between local, state and federally raised resources. 

New Hampshire’s public sector – including state, county, school and municipal governments – provides a wide array of public services. While the funding of services provided at each level of government is often analyzed separately, both the financing of services and the services themselves are intertwined. Each level of government, for example, plays a significant role in providing health and social services to community members, ensuring public safety through a combination of various enforcement, justice and corrections activities, and providing education. 

Financing these services is also intricately intertwined among the levels of government. State government and cities and towns, for example, share financial responsibility for funding K-12 public education, and the retirement system for public workers including teachers, firemen and policemen.   The state and counties share financial responsibility for operating the state’s Medicaid long term care system. Schools in New Hampshire play a large role in providing mental health services to New Hampshire children through the state’s Medicaid program.  County expenditures are in part funded through the local property tax managed by towns.

Given this interdependence, it is no surprise that policy-makers are concerned about ‘downshifting,’ where the state shifts financial responsibility for public services to the local level. Recent legislative changes, for example, have focused attention on how the financing burden of these public services is changing. Public policy debate about changes in the retirement system, the state’s Medicaid county-based long term care services program, suspension of state revenue sharing, and state education funding inevitably have involved conversations about the ‘shifting financial burden of public services’ from general state taxation to the local property tax.