Arlinghaus Radio Tour

Charlie Arlinghaus joins the boys from Granite Grok tomorrow morning at 9:30 to discuss the JUA Lawsuit, and its aftermath on the New Hampshire budget.

Listen Live to "Meet the New Press" from 9-11am on Newstalk 1490 WEMJ or online.

Happy Birthday, Mr. Friedman

Milton Friedman was born 97 years ago today.

Here's our complete archive of TGIFriedman.

Hattip: Dennis Delay

TGIFriedman: Consumer Protection

Milton Friedman takes on Ralph Nader:

Congress rushes to triple failed program

The House is rushing to pour an additional $2 billion into the Cash for Clunkers boondoogle. That means more of your money, or more likely your grandchildrens' money, will help your neighbor buy a car.

The dead weight loss to the American economy is staggering. Thousands of perfectly good cars will be scrapped because Congress wants to curry favor with car dealers and car companies. Reader William Albenzi reminds me of the Broken Window Parable, in which destruction is mistaken for economic activity. Regardless of the cost to the Treasury, the cost of scrapping functional automobiles for a marginal increase in fuel economy is huge. Even weighed on purely environmental grounds, the benefits of increases as small as one mile per gallon must be offset by the sheer tonnage of rusting hulks added to American scrapyards.

Senator Jeanne Shaheen and Congressman Paul Hodes tell WMUR-TV that this massive diversion of economic activity is a success. Perhaps next week, they will go around breaking our windows for us.

Paying their fair share, and ours

The next time President Obama or another politician attacks the rich for not paying thier fair share of taxes, remember that the top 1% pay a greater share of federal income taxes than the bottom 95%.

This takes into account income taxes to the federal government, not state and local taxes, gas taxes, fees, and the other various ways that government takes our money, but it does show that we've greatly shifted the tax burden onto high income earners.

Hattip: Carpe Diem

Live Free or Die. 200 years later, death is still not the worst of evils.

As we mark the 200th anniversary of John Stark's most famous words, here are some links showing that they are still relevant today.

In the Union Leader, Dan Touhy looks at John Stark's legacy. John DiStaso reports on New Hampshire activists rallying around the state motto. And their lead editorial defends the motto under attack by a Task Force set up by the Governor to improve New Hampshire's image with young people.

In April, author Mark Steyn spoke on the meaning of "Live Free or Die" at Hillsdale College.

John Stossel recently weighed in on criticism of "Live Free or Die".

UPDATE: Brian Lawson reminds me that the Live Free or Die Alliance has launched its beta-site.

Congress Junks Clunkers Program

USA Today reports that the feds are suspending the newly launched "Cash for Clunkers" program:

Automakers have ordered millions of dollars in television ads. Dealers had the hot dogs, balloons and full-page Sunday ads in the newspapers ready to pounce on sales opportunities. And it is all in vain: the "Cash for Clunkers" program is on hold.

This would have been the first full weekend for the program. It was only last Monday that Transportation Secretary Ray LaHood officially kicked it off. Lots of momentum will be lost from the suspension, confirmed moments ago by sources.

The problem had troubles right from the start. While customers rushed to dealers with their worst-looking vehicles, dealers were trying to navigate 135 pages of rules and lots of red tape. The program will almost certainly begin again after a break -- but it's yet to be seen if the momentum can be regained. (more)

Local coverage in the Concord Monitor and Fosters Daily Democrat.

Congress handed out free money for people who were trading in their cars. People respond to incentives. This extremely short-term blip in auto sales will be absorbed over the next few months, when customers who would have been trading in their old cars aren't coming in. Is that short-term blip worth $1 billion? Sure, if you're raising campaign funds from the auto industry.

We have also lost the value of hundreds of thousands of functional cars that must be scrapped rather than remain on the road. Such destruction hurts our economy. Under Congress's logic, we should start tearing down houses to boost the housing market, burning wheat fields to pump up agriculture, and lighting fires in your closet to help J.C. Penney. Congress is not best suited to decide which cars should be on the road, and which should be in the junkyard. Yet they are taking a billion dollars from our future in order to enforce their preferences.

Concord Monitor- State employees should take the deal

The Concord Monitor recommends that the State Employees Association take the deal reached with Governor Lynch to avoid layoffs:

Accepting 18 days off without pay over the next two years in exchange for 18 paid days off from 2012 to 2016 is a sacrifice. State workers will lose approximately 5 percent of their income in the short run. But the alternative, putting hundreds of their fellow employees out of work at a time of high unemployment, is worse. In a matter of weeks, when the plan is put to a vote, union members should approve it. The sacrifice by state employees - who also will see a salary freeze next year will not go unnoticed. Neither, unfortunately, will the unavoidable slowdown in services at a time when the recession-driven demand for them is relentless. (more)

The main benefit to the furlough deal is that is does nothing to reduce the baseline of state expenses. By avoiding any real cut in the state workforce, or rolling back the 5.5% pay raise state employees received at the beginning of the year, this deal ensures that state employment expenses will resume their rapid upwards climb once the temporary furloughs are completed.

WMUR covers JUA Fallout

Channel 9 interviews Governor John Lynch, Senator Peter Bragdon, and Josiah Bartlett Center President Charlie Arlinghaus about what's next for the state budget following Wednesday's ruling agianst the state in the JUA Lawsuit.

VIDEO

But Lynch said budget challenges are nothing new.

"All budgets are subject to unanticipated events," he said. "This won't be the only event that occurs over the next couple of years, and we'll talk with legislators on how to manage it."

Governor Lynch says this outcome was unanticipated. Perhaps, he should find better sources of budget coverage.

Forget Swine Flu: Pork may kill us all.

The federal government runs a research facility on infectious diseases on a remote island, where any outbreak can be contained. But Kansas's Congressional delegation wants to take credit for bringing a new and expensive federal facility their state. The Washington Post reports that we might move our stockpiles of deadly pathogens- to Tornado Alley:

The criticism of DHS's site selection comes as the proposed research lab, the National Bio and Agro-Defense Facility (NBAF), was expected to win construction funding in the congressional appropriations process.

"Drawing conclusions about relocating research with highly infectious exotic animal pathogens from questionable methodology could result in regrettable consequences," the GAO warned in its draft report. DHS's review was too "limited" and "inadequate" to decide that any mainland labs were safe, the report found. GAO officials declined to comment on the findings.

The new developments started another round of accusations that politics steered DHS's decision in January to build the proposed lab in Manhattan, Kan. Critics of the choice argue that a Kansas contingent of Republican Sens. Sam Brownback and Pat Roberts and then-Gov. Kathleen Sebelius, a Democrat, aggressively lobbied DHS to pick their state. Records show that a DHS undersecretary and his site selection committee met frequently with the senators, one of whom is a member of an appropriations subcommittee that helps set DHS funding.

A Texas consortium that hoped to lure the DHS facility to San Antonio argues that the agency has wasted millions of dollars trying to justify its choice, and said the GAO's findings show that the selection method was "preposterous."

"They call it 'Tornado Alley' for a reason," said Michael Guiffre, an attorney for the consortium. "This really boils down to politics at its very worst and public officials who are more concerned about erecting some gleaming new research building than thinking about what's best for the general public." (more)

'Cash for Clunkers' a federal headache for local dealers

Adam Krauss reports in Foster's Daily Democrat that local car dealers are not enjoying their encounter with federal bureaucracy:

he trade-in rebate program — which promises $3,500 or $4,500 rebates on new vehicles in hopes of getting fuel-efficient cars on the road — requires that motorists show proof of insurance and that they have owned the vehicle for at least one year. The problem, lawmakers say, is that New Hamsphire doesn't have a mandatory insurance law.

But that issue only scratches the surface of the program's "chaotic" rollout, as put by Peter McNamara, president of the state's Automobile Dealers Association.

"I don't know of a single dealership who has successfully submitted a claim," he said. "One dealership has 50 deals stacked up" in the office waiting to be processed. (more)

Concord car owners look to avoid increased fees

Shira Schoenberg writes in the Concord Monitor that local motorists are registering their cars early to avoid higher fees under the new state budget:

In a phenomenon rarely seen by bill collectors, a large number of them were paying to renew their car registrations - up to three months early. Their goal: escaping a state fee increase that goes into effect Saturday.

"When you have three cars to register and prices are going up, if you can save money, it's better to save it, with the economy the way it is," said Linda Fellows, 42. Fellows, who is disabled, is unhappy that the state is raising the fees, which could cost her an additional $100 a year. "When we got wind that if we register early, it's going to save money, my husband said go down and do it." (more)

Take note when July's revenue figures come in early in August. If car registration revenues exceed estimates, it could be because drivers are paying early, which could mean a dip in total registration revenues throughout the year. Or this could be anecdotal evidence that has little impact on the overall state budget.

Laconia Daily Sun wraps up JUA Case

Michael Kitch has owned the JUA story in the Laconia Daily Sun since the lawsuit was filed. His article in today's Sun is the most comprehensive look at Judge Kathleen McGuire's order I've yet read:

Laconia Daily Sun- JUA 07-30-09

When budgets get rough, states get gimmicky

New Hampshire tried to balance its budget by taking $110 Million from a private insurance fund. That bit of creative accounting by Governor Lynch and the legislature was recently ruled unconstitutional by Judge McGuire. Sadly other states have resorted to tricks and gimmicks, instead of hard work and tough decisions, to balance their budgets too.

By Curt Woodward

Associated Press Writer / July 30, 2009

OLYMPIA, Wash.—Here's one creative way that state lawmakers helped balance Washington's troubled budget: They assumed public employees will stay on the job longer -- and die sooner than expected once they finally retire.

That bit of fancy footwork, which saved the state about $45 million, is just one entry on a long list of financial gimmicks that legislators nationwide have cooked up to patch holes in their states' budgets.

It's a roster of shell games that might land the average taxpayer on a collection agency's speed-dial list. But when times are tough, public officials aren't shy about juggling the books to make a short-term budget problem disappear.

"It's often a pretty impressive set of magic tricks," said Richard Briffault, a Columbia University law professor who specializes in state and local governments.

There are other prime examples: (more)

Smith brings Burling into Leishman Lease Deal

Kevin Landrigran reports in the Nashua Telegraph that Finance Chair Marjorie Smith claims that veteran State House insider Peter Burling got her involved in efforts to renew a lease deal for State Representative Peter Leishman:

Smith said it was former state Sen. Peter Burling, of Cornish, who first raised to her concerns that Leishman's pursuit of the lease was jeopardizing the future of bringing back passenger rail service to the state.

Pan Am owns the track from the New Hampshire border to Concord that would provide the rail link for commuters traveling to Boston.

Burling is chairman of the New Hampshire Rail Authority that last month applied to the Obama administration to get competitive stimulus money for the rail effort.

Last month, Fink informed Campbell that due to the state's failure to properly bid the work, he was suspending negotiations with DOT officials about the passenger rail project.

"When Peter Burling mentioned Peter Leishman's name and said that the contract with Peter Leishman was interfering with progress on the passenger rail proposals, I replied I thought that the two could be kept separate,'' Smith wrote. (more)

Smith denies putting any pressure on Campbell to renew the lease, and her letter to Campbell indicates that Campbell didn't know that Leishman had a lease renewal pending before being speaking with Smith. No one involved in the case has yet to explain why so many public officials were taking such an active interest in a lease agreement that nets the State less than $10,000 annually.

Ruling leaves state with big budget hole

Kevin Landrigan covers the JUA case in the pages of the Nashua Telegraph, leading with the force of McGuire's ruling against the state:

In a strongly worded opinion, Associate Justice Kathleen McGuire ruled the state had no right to claim as its own surplus money in an account that helps subsidize the cost of medical malpractice and liability insurance coverage for health care providers.McGuire said the state's claim to the money to balance its books did not justify the maneuver.

"Fiscal necessity, though superficially compelling, has never been sufficient of itself to permit states to abrogate contracts," McGuire wrote. (more)

Ruling sets state back $110 million

Lauren Dorgan reports in the Concord Monitor on the decision in the JUA case, and Governor Lynch's reaction to it:

Belknap County Superior Court Judge Kathleen McGuire found for a group of doctors and hospitals insured by the fund that claimed the money rightfully belongs to them. She found that the state budget plan to seize the money violates state and federal constitutional prohibitions against taking private property and against impairing a contract. McGuire's 27-page ruling dissected the state's claims to an ownership stake in the Joint Underwriting Association and concluded the planned seizure is "unconstitutional and shall not be enforced."

Lynch promptly vowed to appeal the decision to the state Supreme Court. In a statement, Lynch, a Democrat, restated his belief that the money rightfully belongs to the state.

"The Joint Underwriting Authority was established - and given tax-free status as a state entity - in order to provide a service, not a windfall, to doctors. The state established the Joint Underwriting Association to ensure doctors could get access to malpractice insurance and that service has been provided," Lynch said in a statement. "These surplus funds belong to the citizens of New Hampshire, who created the Joint Underwriting Association and gave it tax-exempt status." (more)

The Governor's logic is that the JUA's tax-exempt status makes its a state agency. If true, this would have wide-ranging implications for other tax-exempt organizations that are currently considered private entities. And any windfall going to doctors comes from money they paid. The State of New Hampshire has not provided a single dollar to the JUA in the 35 years its been in operation.

Since both parties to the case already stipulated the facts prior to trial, there is little room for appeal beyond showing some legal error on McGuire's part. That would seem to require the State coming up with some new cases specific to New Hampshire that dramatically alter the way the Court examined both the Takings and Commerce Clauses of the state constitution.

Both I and Charlie Arlinghaus have been warning budget writers for months that their attempt to transfer money from the JUA to the General Fund was illegal, unconstitutional, and unlikely to succeed. We doubt very much that the State would prevail on appeal.

Amendment X: Transparency in PA

Our colleagues at the Commonwealth Foundation have won a victory for open government in Pennsylvania:

Commonwealth Foundation president and CEO Matt Brouillette issued the following statement today in response to the General Assembly’s decision to make Conference Committee meetings on the state budget open to the public:

“The Commonwealth Foundation applauds the General Assembly for opening Conference Committee meetings on the state budget to the public and the press.

Until now, budget negotiations have been secretive, with the Conference Committee meeting only after legislative leaders and the Governor had privately struck a deal. By opening the Conference Committee to the public and press, lawmakers are giving taxpayers insight into negotiations and helping to prevent back-room deals. (more)

JUA Ruling

McGuire Decision 07-29-09

JUA ruling puts $110 million hole in budget

The Union Leader reports that Judge Kathleen McQuire has found for the plaintiffs suing the block the state's efforts to take $110 million in excess medical malpractice payments to the Joint Underwriting Association:

A court ruling today blocked the state from balancing its budget with $110 million from a medical malpractice fund.

Belknap County Superior Court Justice Kathleen McGuire said the state had no right to the funds because they belong to the Joint Underwriting Association. (more)

The state is expected to appeal, but for now, $110 million that budget writers has assumed would help balance both the last budget and the current one is off limits. There is no legal requirement that the state operate with a balanced budget, but State House watchers believe this shortfall could spur a special session to make up the difference.

Charlie Arlinghaus predicted this outcome back in February. He is far to classy to say "I told you so." I'm not.

Much more on this story after we've digested McGuire's complete 28-page decision.

Cash for Clunkers is a Clunker

The Nashua Telegraph doesn't like what the federal government's Cash for Clunkers program has become:

But one thing seems pretty clear even now: that the overly generous guidelines developed by the U.S. Department of Transportation for this program will do little to reduce the national consumption of gasoline or to encourage Americans to purchase smaller, more fuel-efficient vehicles.

What else can you conclude from a program that rewards the owner of a light truck or SUV with a $3,500 rebate for purchasing the exact same model with a miniscule improvement of 2 mpg? (more)

The program was sold as a way to both boost the auto industry by boosting demand, and a way to improve fuel economy by getting people to buy more fuel efficient cars. Congress turned into a mechanism to take money from taxpayers, and our grandchildren, and take credit for their largesse to car dealers and consumers.

Such artificial interference always has benefits, to those receiving government favor, but it rarely outweighs the overall costs.

Where's tax money going? Check and see

The Concord Monitor argues that new websites designed to track stimulus spending at the state and federal level are a break from the past, and a welcome shot of transparency into the opaque actions of government:

The American public has come to expect that its tax money will be wasted or stolen. Its cynicism is justified. Consider the recent arrest of 44 people, among them three mayors, in a crackdown on government corruption in New Jersey. The state and federal stimulus fund tracking sites are an attempt to avoid that sort of thing. The sites may also help to prevent political favoritism, discriAmination, waste and fraud. If they do, they could be the best proof yet that sunshine is indeed the best disinfectant. (more)

JUA Decision Coming Soon

I don't often post rumors and speculation, though they last time I did, I nailed it.

Observers of the JUA case expect a decision from Judge Kathleen McGuire could come down today. McGuire has said she would rule by the end of the month, which is Friday.

SPIN METER: 'Help Wanted' counting stimulus jobs

In Oregon the unemployment rate is 12.4 percent, 3 percent higher than the national average. Their legislature spent an additional $176 Million on top of the federal stimulus in an effort to create jobs. An AP analysis of the results are less than flattering.

By RYAN KOST, Associated Press Writer – Tue Jul 28, 12:52 pm ET

PORTLAND, Ore. – How much are politicians straining to convince people that the government is stimulating the economy? In Oregon, where lawmakers are spending $176 million to supplement the federal stimulus, Democrats are taking credit for a remarkable feat: creating 3,236 new jobs in the program's first three months.

But those jobs lasted on average only 35 hours, or about one work week. After that, those workers were effectively back unemployed, according to an Associated Press analysis of state spending and hiring data. By the state's accounting, a job is a job, whether it lasts three hours, three days, three months, or a lifetime.

"Sometimes some work for an individual is better than no work," said Oregon's Senate president, Peter Courtney.

With the economy in tatters and unemployment rising, Oregon's inventive math underscores the urgency for politicians across the country to show that spending programs designed to stimulate the economy are working — even if that means stretching the facts. (more)

What has happened to a 'shovel ready' recovery?

The Foster's Daily Democrat took a closer look at a recently announced stimulus grant only to discover that 1) it's being used for a federal program that's been in existence for more than 10 years, and 2) the new jobs won't necessarily begin any time soon.

Wednesday, July 29, 2009

An example of the misuse of federal stimulus money right here in the Seacoast was announced this week by the White House Office of the Vice President.

In a press release, Vice President Joe Biden and Attorney General Eric Holder “announced $1 billion in grants to fund the hiring and rehiring of law enforcement officers all across the country under the American Recovery and Reinvestment Act of 2009.”

In the Seacoast that means $664,869 and three positions for the Rochester Police Department, $195,729 and one for Epping and $188,003 and one for Wakefield.
According to the press release, “These funds will provide 100 percent of the approved salary and benefits for these officers for three years.”

While the funding for these positions comes under the guise of American Recovery and Reinvestment Act of 2009, it is really just more funding for the ongoing COPS program — not a new recovery oriented one.

The Community Oriented Policing Services program was created under the Clinton Administration as part of President Clinton's campaign promise to put more police on the streets.

But didn't President Obama promise to put money into “shovel ready” programs?
True, this round of grant funding was effective July 1, 2009, and would enable local departments to quickly rehire officers once they have accepted the funds. But it is also true the money does not have to be used immediately. (more)

Many find higher meals tax unappetizing

The Union Leader reports that the increase in the Rooms and Meals Tax is being felt one penny at a time:

For the regulars at Granny Judy's Kitchen, a small diner on Franklin's North Main Street where the dress code includes Carhartts and a hard hat, even a 1 percent hike in the rooms and meals tax has meant cutting back.

Owner Yvon Cloutier said the higher tax, passed last month and put into effect on July 1, has meant some customers are choosing not to order a large orange juice or an extra egg.

In turn, Cloutier, who has a profit margin of about 10 percent, and his servers have seen their take-home earnings drop over the last few weeks.

"The state is beginning to make just as much as me, but I'm the one who is getting up at 4:30 in the morning and out the door by five," Cloutier said. "I'm the one who is putting in the 11-hour days. I'm the cook, I'm the server, I'm the dishwasher, and in five minutes I'm going to be mopping the floor."

I often buy coffee at White Mountain Coffee down the alley from our office. Last month, a large coffee cost $2.00. Now it costs $2.02. I will try to temper my personal annoyance at the Rooms and Meals Tax hike as we continue to report on its effects.

Charlie Arlinghaus- Keeping an eye on the new budget

By CHARLES M. ARLINGHAUS

Less than a month after the state's two-year budget was signed and theoretically balanced, there is a growing concern in Concord that the budget seems to be unraveling.

About 43 percent of the state's two-year, $11.5 billion budget is the operating budget supported by the general tax and fee revenues of the state, as opposed to federal grants and dedicated funds. This spending is paid for with the state's regular revenue sources -- business taxes, tobacco taxes, liquor revenue, etc.

For the two years that began July 1, we're planning on spending $4.95 billion in the operating budget. However, regular state revenue falls about $400 million short of that, so we're replacing it with a series of one-time revenue sources. Most of the one-time sources are special programs the feds included in their so-called stimulus bill.

One source generating concern in Concord is $110 million the state wants to take from a medical malpractice fund called the Joint Underwriting Association. This is the subject of a lawsuit, and I've written about it frequently. We'll know this week, but a growing number of people inside government believe the state will lose this case. That will create a $110 million hole in the budget.

Regardless of the outcome, the case will be appealed and we won't have a definitive answer for a few months. The difficulty is that much of this money is actually used to fix the ending deficit from the last budget. If the state loses this week, that money won't be available and the state will have to find some other money or end the previous fiscal year with a hole in the budget.

The $110 million in question is a lot of money, but to put it in context it's about 2.5 percent of the money the budget estimates our current taxes and fees will raise in unrestricted revenue. Therein lies the second possible concern in the current operating budget.

Our loose balanced-budget law requires that budgeted spending be balanced by an estimate of the revenues expected. In areas such as caseloads for Medicaid, the spending is an estimate. But for the most part, it is a fairly accurate limit that administrators are not permitted to exceed. The revenue side is more nebulous.

We have a history of exceeding our revenue estimates. For a long time, we were particularly cautious in our estimates and always raised a bit more than budgeted. Having a cushion is good budget practice. It gives us a greater certainty that the money really will be there and allows a potential cushion against pressing needs that arise.

Two years ago, optimistic revenue estimates caused budget problems mid-year when revenues came in at lower levels. A deep recession compounded the error, and we ended up with almost $400 million less than we had planned for over two years.

Uncertainty about the economy had everyone thinking about making cautious estimates. However, during the last days of conference committee negotiations, legislators needed more money or less spending to balance the new budget. Coincidentally, but fortuitously, the governor's new revenue commissioner came forward with new estimates that were $75 million higher than the ones from a few weeks before. Problem solved.

It would be fair to describe the new estimates as reasonable, but on the optimistic side. A more cautious approach would have used the lower estimates of three weeks before. In addition to the new optimism, the budget created new tax revenues that have to be estimated without any history or good data. For example, we don't know how many people camp, so the new campground tax revenue is a guess. The new tax on limited liability corporations is still being written, so it's even harder to predict.

By the end of the week, we'll have one vague snapshot of revenues. July's revenues are only about half the level of an average month during the budget year. If they are a few percentage points higher or lower than estimates, it won't be definitive, but we'll know if the estimates are in the ballpark. At the end of September, we'll have a full quarter of data and a much better idea of where we stand.

Our law requires only that the budget as passed come to an estimated balance two years from now. Once passed, the requirement ends, no matter what happens. The problem is that the longer we wait to act, the more painful the fix would be. Cutting $110 million to $150 million of spending over 22 months is easier than doing it over 14 months. Administrators shouldn't count on the final budget number being final. There's no need to panic, but we should proceed with caution.

Charles M. Arlinghaus is president of the Josiah Bartlett Center for Public Policy, a free-market think tank in Concord.

Should you be allowed to sell your kidneys?

Ilya Somin tackles a key moral objection to the idea at the Volokh Conspiracy, the argument that organ donations markets exploit the poor.

There is a fundamental objection to placing monetary value on human body parts. And yet prohibiting compensation for organ donation unquestionably means far more people dead for lack of organs than if such voluntary exchanges were allowed.

Under a strict utilitarian argument, allowing people to sell themselves a piece at a time would make make us better off.

Under a libertarian argument, people should be allowed to weigh the risks and rewards of organ donation on their own, even if it could be harmful to the donors' health. Somin shows that for kidney donations, those risks are minimal. For post-mortem donation, they are non-existent.

Markets solve problems. They distribute scarce resources more efficiently. But they can't make moral decisions for us. We need other means to determine what is permissible and what is prohibited. Only then can markets help us distribute our limited resources within the boundaries we create.

That’s one sales tax we all can support

The Nashua Telegraph recognizes Massachusetts Governor Deval Patrick for his efforts to revive the New Hampshire economy:

The next time Gov. John Lynch sits down to write out some thank-you notes, he might want to make sure that Massachusetts Gov. Deval Patrick is at the top of the list.

After all, that’s the least he can do for the person who might have done more to stimulate the New Hampshire economy this year than the 424 members of the state Legislature combined. (more)

Patrick is a charter member of the New Hampshire Economic Recovery Coalition.

Lynch Signs Capital Budget on the Beach

The Union Leader reports that Governor John Lynch used Hampton Beach, and $14.5 million in improvements to state facilities, as the backdrop to sign the state's two-year Capital Budget:

Calling Hampton one of New England's "crown jewel beaches," Lynch paved the way for the project that will revitalize the beach by adding and improving amenities that serve the hundreds of thousands of visitors each year.

"I do think the quality of the facilities and the quality of the services offered should be equal to the quality of the beach and the quality of the people who live here," Lynch told a crowd of state and local public officials and business leaders.

The project, expected to begin by late fall or next spring, will feature several new facilities, including two new bathroom complexes at the Marine Memorial and near Haverhill Street, a new Seashell stage, an expanded visitor center, canopies for shade, and stations for lifeguards and first-aid services.

According to the Legislature's Bill Tracking site, Governor Lynch actually signed the Capital Budget into law on June 30, making yesterday's ceremony, well, ceremonial.

Mass. Candidate fights NH Economic Recovery Coalition

Gubernatorial candidate Christy Mihos is bucking efforts by the Massachusetts Legislature to boost the New Hampshire economy:

Mihos’ campaign has mounted a hidden camera just over the border on Route 28 in Salem, N.H., that will feed live video to his Web site starting today to show how many Massachusetts shoppers are taking their business north.

“Deval Patrick is a good governor - for New Hampshire,” Mihos cracked. “We’re just trying to show how bad tax policy hurts the region and the state. We’re inhibiting economic growth on the border by giving a direct competitor a 6.25 percent advantage. Who in business would do that?” (more)

Interesting. Most of the cries south of our border have been complainging about New Hampshire's lower taxes, or attempts to collect taxes on New Hampshire purchases. Mihos actually thinks his state should try to complete with the Granite State? If he keeps this up, he'll never get any support in Salem or Nashua.

Here's where to cut the spending

Foster's Daily Democrat editorializes today on where to cut government spending. Although a better title might be how to cut the spending. Their proposition is that the way to reduce government spending is to reduce state regulations and mandates.

Here's where to cut the spending

Tuesday, July 28, 2009

As noted many times on the editorial pages of Foster's Daily Democrat, New Hampshire does not need or want an income tax.

There are many reasons for this, but that is not the point of the words which follow. Spending is.

"Where would you have us cut?" is a common refrain from legislators and those who disagree with calls for greater frugality in Concord.

"Child care, welfare, Medicaid, prisons, school aid ... where?" they ask.

Fortunately, the answer is quite simply stated, though not easy digested.

Take a look at any of the many cities and towns that bit the bullet and refused to raise local property taxes — and in some cases cut them.

In each case, local committees and boards made tough decisions. "What do we need to do versus what we would like to do?" And more importantly, "What can we afford?"

The problem for some in government is that they believe government needs to do everything — or darn close to it. (more)

Questions for the AG's Office

NH Watchdog has contacted the New Hampshire Attorney General's Office to find out more about their investigation into the disputed railroad lease with Milford-Bennington Railroad, owned by State Representative Peter Leishman.

The AG's Office informs us that Assistant Attorney General David. M Hiltz is heading up this case, but that he is on vacation until next week. When Mr. Hiltz returns we will seek answers to the following questions:

What is the scope of the Attorney General's inquiry? Is it limited to Commissioner George Campbell's action, or will it examine political influence from the Governor and Members of the New Hampshire General Court?

With no sitting Attorney General, to whom does Hiltz report?

Should Michael Delaney become Attorney General, what would be his role in the case?

What are the procedures for determining a conflict of interest in the Attorney General's Office?

What are the procedures for determine a conflict on interest in the New Hampshire Legislature?

Given that the current lease expires in February, and that a possible outcome of this case would require an open bidding process, when does the Attorney General's Office anticipate completing its investigation?

We have very little information so far on the Attorney General's probe, and no reason to doubt that it will conducted properly and professionally. The close political relationships of everyone involved in this case present unique legal challenges not faced in New Hampshire since the Brock Impeachment Trial.

Telegraph profiles NH Office of Economic Stimulus

Albert McKeon examines New Hampshire's stimulus clearing house in this morning's Nashua Telegraph.

$500k per job: Obama buys NH buses

The Union Leader editorial page finds fault with the latest example of federal stimulus funding in New Hampshire:

The U.S. Department of Transportation announced on Friday that it is sending $2 million in stimulus money to the state DOT to buy four buses. The buses will be owned by the state. Boston Express will use one pair, and C&J Trailways will use the other -- all for free. C&J co-owns Boston Express with Concord Coach.

"These funds are creating jobs now while investing in the future of our transit systems," Administrator Peter Rogoff of the Federal Transit Administration (FTA) said in Friday's news release. "The public's demand for transit service continues to grow, and these dollars will help meet that need."

That sounds nice. But it isn't true. (more)

Railroad Lease on WGIR

Grant Bosse will be a guest on the WGIR Morning News to discuss the controversy surrounding the state's no-bid renewal of a railroad lease for State Represntative Peter Leishman.

Grant is scheduled to be on the air at 8:30am.

Railroad: DOT not getting fair value

John DiStaso reports in the Union Leader that Pan Am chief David Fink now claims his railroad would generate higher revenues for the state than the rail line operated by State Representative Peter Leishman:

Pan Am Railways, a subsidiary of Nashua-based Pan Am Systems, asks in letters to DOT Commissioner George Campbell "whether the state of New Hampshire is maximizing the value of its assets" and charges that "the state is losing thousands of dollars in potential revenue at a time when significant budget cuts and layoffs are occurring." (more)

Leishman claims that while his company is allowed to charge higher rates for use of the track, doing do would force his only customers to use trucks instead of trains.

"Buy American" bad for U.S. economy

Reason TV takes on the ridiculously counter-productive "Buy American" movement.

Warning: this video contains images of women in bikinis which some viewers may find offensive.

Hattip: Cafe Hayek

Why can't doctors be more like dentists?

An interesting question from Curt Whitaker in the pages of the Concord Monitor:

Why does my dentist insist that I come in regularly, while my doctor's office only reacts when I call with a complaint?

And why is my dentist always so chipper, and my doctor seemingly hassled?

We may be about to launch into a brave new world of health care and, frankly, just about anything has to beat the weird system that we have now. But before we federalize, universalize or standardize health care, it seems worth asking: Why can't doctors be more like dentists? (more)

I don't hear all that many calls to "reform the dental system".

Foster's Pans Prez Performance

Foster's Daily Democrat says that President Obama hurt his health care plan more than helped it this week, and not because of the Cambridge Police controversy:

OBAMA: “You haven’t seen me out there blaming the Republicans.”

THE FACTS: Obama did so in his opening statement, saying, “I’ve heard that one Republican strategist told his party that even though they may want to compromise, it’s better politics to ‘go for the kill.’ Another Republican senator said that defeating health reform is about ‘breaking’ me.”

But that is not nearly the worst of it. Throughout the campaign and into his administration, the president pledged that middle and low-income Americans earning less than $250,000 a year would see no tax increase.

But Wednesday, the president vowed only to reject any measure “primarily funded through taxing middle-class families.” (more)

Kevin Landrigan- Bad Luck Comes in Threes

Kevin Landrigan summarizes the legal challenges facing the New Hampshire budget in his Sunday column in the Nashua Telegraph:

There may soon be three lawsuits against Gov. John Lynch and the state Legislature over the state budget.

Superior Court Justice Kathleen McGuire is expected to rule this week on the state's use of $110 million from the Joint Underwriting Association, a quasi-public malpractice insurer of last resort the state set up in the 1970s to help doctors.

A coalition of local and county government groups is raising money for a lawsuit to challenge a reduction in the state's contribution to local and county retirement funds. State officials believe they can win that case because the state has cut its contribution before – from 40 percent to 30 percent in the 1980s.

The current budget further reduces that to 25 percent in 2010 and 20 percent in 2011.

The third suit, still in the talking stages, would challenge a requirement that all retirees younger than 65 contribute $65 a month toward their health insurance.

Sunday Book Review- Economics Does Not Lie

Steven Spruiell tackles Economics Does Not Lie: A Defense of the Free Market in a Time of Crisis the pages of National Review:

Economics Does Not Lie is not as argumentative as its subtitle might lead you to think. It has the feel of a book that was embarked upon before the crisis hit, as if Sorman set out to write a sober-minded survey of economics as a science and got caught in a raging storm. The book doesn’t read like a polemical counterattack on capitalism’s crisis-minded critics, but it does serve as a defense of free markets because that is the direction in which the science of economics as explicated by Sorman points. No other system has proven as effective at reducing poverty and delivering growth as “free-market capitalism, informed by classical liberal economic theory,” and reports of the death of this system are greatly exaggerated. (more)

Electric Cars Catching up to Gas Guzzlers

I had the chance to talk energy issues a lot last summer, and I always said that electric cars would become viable as soon as they could drive several hundred miles, and recharge in the time you would normally take to gas up a rest stop; somewhere around 15 minutes. If you can't take your electric car away from home, and then have to plug it in for 12 hours, you don't get the indepedence that owning a car brings.

It appears MIT students have built a car that they can recharge in 11 minutes.

The car's range is 320 kilometers, or about 200 miles. I can get about 350 miles on a tank in my car, so we're getting into the right neighborhood. The major obstacles remain building recharging stations powerful enough to get that much juice into the car that quickly, establishing broad standards for the recharging infrastructure, and the many growing pains of getting from prototype to production. Let's hope the federal government doesn't decide to take over electric car development, or we'll never get them on the road.

And of course there's the question of how to generate the electricity that would be fueling the fleet of battery-operated automobiles. Nuclear power anyone?

Thomas Sowell: Must health care reform be state-run?

Just asking that question is important. Read the whole thing in the Union Leader.

New Contract reached with state employees

The Union Leader's Garry Rayno has the details of the deal negotiated between Governor John Lynch and the SEA:

The agreement, which includes a salary freeze in the second year of the biennium and the limited return of bumping rights, was reached late Thursday night and still needs approval of the 11,900 state workers and a joint legislative committee. (more)

We all failed the people of New Hampshire

Some people criticized the NH Legislature this year for spending too much time on social issues while not paying enough attention to the budget. At least one State Representative agrees. Kris Roberts, D - Keene, put it this way in a letter to the Keene Sentinel:

Published: Friday, July 24, 2009

The N.H. General Court spent a great deal of time this session on many social issues, such as the death penalty, transsexual discrimination, medical marijuana, marriage equality and numerous important personal social issues. While such issues deserve public attention, one must ask: Was this the time?

It seemed like very little time was spent on the budget, as New Hampshire was being repeatedly hit with rough economic waves that not only threaten our financial future but our standard of living and quality of life. I believe that the people elected us to address the needs of the state. If it meant that passing a realistic budget was the only issue on the agenda, so be it. (more)

Rye considers suing state over downshifted costs

The Portsmouth Herald reports that another town is thinking about joining a lawsuit against the state.

By Beth LaMontagne Hall

news@seacoastonline.com

July 24, 2009 4:20 PM

RYE — The Board of Selectmen will discuss at its meeting Monday night whether to join a possible lawsuit against the state over what it says are unfunded mandates that violate the state Constitution.

The New Hampshire Municipal Association, along with the New Hampshire School Boards Association and the New Hampshire Association of Counties, is currently considering legal action against the state for shifting some of the state’s financial responsibilities to local governments. The groups said this move is in violation of Part 1, Article 28-a of the State Constitution.

Portsmouth, North Hampton and Seabrook have already expressed an intent to join the suit.

The Legislature has shifted more than $117 million in state costs to local governments in the 2010-11 state budget, according to NHMA. Part of this includes reducing the state’s share of the employers’ retirement contribution for teachers, police, sheriffs and firefighters.

The request came in a letter sent by the NHMA July 9 and asks the town of Rye to contribute $1,048.13 to the proposed lawsuit. The selectmen would need to vote on the allocation and designate a primary town contact for relaying information with the NHMA.

The New Hampshire Retirement System has informed local governments that the first payment for the increased employer retirement payment amount is due next month. The three associations representing municipalities, counties and schools are recommending to their members that they pay the amounts owed, but do so under protest to preserve their right to sue the state for violating Article 28-a.

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Leishman Lease Deal and Extension

The Josiah Bartlett Center for Public Policy has obtained a copy of the 1999 lease agreement between the State of New Hampshire and Milford-Bennington Railroad Inc., owned by State Representative Peter Leishman, along with the six-month extension agreed to by the Executive Council on July 15, 2009.

Railroad Lease

TGIFriedman: Higher Education

Details of SEA deal emerging

The Union Leader runs an Associated Press report on what's in the new SEA deal:

The source close to the negotiations said Friday the deal calls for 18 unpaid days, including 12 holidays. It also restores limited rights for laid off workers to bump junior workers from jobs.

The source, who didn't want to be named pending a contract announcement Friday, said it contains protections against layoffs for workers who aren't otherwise already at risk as part of the budget enacted in June. (more)

The deal must be ratified by the Legislature's Joint Employees Relations Committee, commonly known as the JERC Committee.

Congressional Expenses

Fergus Cullen has done some research into how New Hampshire's House members spend our money in their federal offices:

Shea-Porter paid Democratic political consultant Julia Piscitelli $17,000 in seven payments spanning 2007 and 2008. Piscitelli previously worked in Nancy Pelosi's office and has described herself as a "political therapist." In an interview, Piscitelli said then-Rep. Rahm Emanuel dispatched her to teach Shea-Porter how to use franked mail -- mail that members of Congress can send to their constituents using their signatures in lieu of postage -- and to set up better systems for handling constituent mail. Now White House chief of staff, Emanuel's job then was to help vulnerable freshmen like Shea-Porter retain their seats, in part by exploiting the advantages of incumbency. (more)

Congressional abuse of the Franking Privilege, which lets them send thinly disguised campaign flyers at taxpayer expense, is a bipartisan disgrace. New Hampshire's House members are hardly alone in using tax dollars to get re-elected, but that doesn't make it right. Compounding the problem, House Speaker Nancy Pelosi has no decided that the Franking Privilege is now simply a partisan perk, not available to the minority party.

Congressional Expenses Spreadsheet

Concord Monitor- SEA, State have deal

Lauren Dorgan reports that the SEA has reached an agreement on a new contract with state negotiators:

State and union negotiators have tentatively agreed to a new contract for state employees that would require workers to take 18 unpaid furlough days over two years and accept a wage freeze next year while restoring to them modified "bumping rights" and providing extra paid "annual days" in years to come, a union source said.

The source spoke on the condition of anonymity because union leaders were waiting to make an official announcement. (more)

Lynch and the SEA: That's intimidation?

The Union Leader doesn't think much of the State Employees Association's claim on unfair labor practices:

This isn't anything the governor hasn't already said publicly. It's hard to see how restating a public position amounts to trying "to intimidate his workers by ratcheting up the layoff threat," as Dennis Kinnan, chief negotiator for the SEA, said.

It certainly appears that for the past several years Gov. Lynch has tried diligently to save state jobs. He has repeatedly raised taxes and fees rather than let employees go. Last year he asked the union to defer 5.5 percent pay raises so he wouldn't have to cut positions. The union said no. (more)

"Free" on the Colbert Report

Fresh from his big break as NH Watchdog's Sunday Book Review, Chris Anderson, author of "Free", goes on the Colbert Report:

The Colbert Report	Mon - Thurs 11:30pm / 10:30c
Chris Anderson
http://www.colbertnation.com/
Colbert Report Full Episodes Political Humor Mark Sanford

And Colbert stole my line about the book costing $26.99, which I'll admit is not the most complex and original joke ever made.

41 and counting

Just a couple of weeks after our report A Rising Tide of Taxes and Fees outlined 38 new or increased taxes and fees in the state budget, the Governor and Legislature have found three more. New Hampshire Business Reviews outlines the latest changes to state law, including the three tax and fee increases:

• Fees for off-highway recreational vehicles, snowmobiles and the agents that sell and rent have increased. OHRV dealer registrations have gone up from $35 to $45.50, and rental agency registrations went up from $58 to $75.40 for each set of decals.

• Snowmobile registrations have increased from $75 to $90 for in-state residents and $90 to $110 for out-of-staters. (Members of the New Hampshire Snowmobile Association will still receive a $30 discount.) Snowmobile dealers’ registration fees have increased as well as rental agency registrations. Agents now must collect $3, rather than $2, for each OHRV and snowmobile registration issued.

• The tax on home heating oil will rise a quarter-penny to 1.25 cents to help clean up the mess left by leaking tanks. The increase sunsets next summer, or if there is enough money ($2.5 million) in the fuel oil discharge cleanup fund. (more)

Differing views on Education Funding

In the Concord Monitor today State Representative Judith Reever claims that fighting over the Claremont lawsuit is over. She states, I am proud that this work was completed on our watch and that education is at last, fully funded in this budget."

It took decades, but education is funded
By Rep. JUDITH REEVER For the Monitor
July 23, 2009 - 12:00 am

When Gov. John Lynch signed Senate Bill 180 into law on July 14, it marked the extraordinary completion of an almost 20-year struggle to meet the state Supreme Court's ruling that New Hampshire provide an adequate education for all students.

SB 180 was the last piece required to meet the state's obligation to the funding of education. The court ruled that the Legislature must define an adequate education, cost it, fund it and put in place measures to ensure we provide the opportunity for an adequate education. (more)

Meanwhile the Keene Sentinel is reporting that "There's a lull in the fighting".

School-funding formula off hot seat — for now
CONCORD — For the first time in almost 20 years, the state of New Hampshire isn’t facing a court battle over school funding.

That may not last.

Gov. John Lynch last week signed a final piece of legislation to meet court-mandated changes to the school-funding formula. The N.H. Supreme Court handed down rulings over two decades that the state must offer children a constitutionally “adequate” education.

But key players involved in the multiyear funding fight expect this will be only a lull in litigation, and they predict a possible return to the courts in 2011, when the new financial aid system is fully implemented.

“I wouldn’t say we’re done, but I wouldn’t say we’re about to run off to court, either,” said Andru Volinsky, lead lawyer for the five communities that filed the initial lawsuit against the state back in 1991. “One of our major problems is there is still not a reliable funding source.” (more)

Leading with layoffs

The latest dustup between Governor Lynch and the State Employees Association is a big story in the state's most widely read papers. Here's how Dan Touhy, Lauren Dorgan, and Kevin Landrigan.

City fights state's 'unconstitutional' cost-shifting

By Adam Leech

aleech@seacoastonline.com

July 22, 2009 7:23 PM

PORTSMOUTH — The city is joining other communities in the state and the New Hampshire Municipal Association in a potential lawsuit against the state for what they say are unfunded mandates that violate the State Constitution.

The New Hampshire Municipal Association — supported by the New Hampshire School Boards Association and the New Hampshire Association of Counties, 140 municipalities and 53 school districts — is currently considering legal action against the State of New Hampshire for cost shifting state financial responsibilities to local governments, which they say is in violation of Part 1, Article 28-a of the State Constitution.

The Legislature downshifted more than $117 million in state costs to local governments in the 2010-11 state budget, according to NHMA.

“We believe that we must start legal proceedings against the State in order to challenge this unconstitutional action and stop the downshifting of state obligations to local governments,” said John Andrews, executive director of New Hampshire Local Government Center, home of NHMA. (more)

UL pleased with AG wiretapping probe

The Union Leader is also pleased that the Attorney General's office will look into the Portsmouth police wiretapping case, which it had called for earlier:

County attorneys make a lot of tough calls about whether to press criminal charges when laws appear to have been violated. Perhaps Reams was right to opt against prosecution in this case. But the reasons he stated for not doing so are questionable enough to warrant the AG's investigation. (more)

Broder exposes PAYGO loophole

In the Washington Post, columnist David Broder shows why the recent move to reinstate Pay-As-You-Go budget controls has been built to fail:

It could do just the opposite. The bill says that at the end of the year, if Congress has spent more on new entitlements or tax cuts than it has saved, the president can roll back or sequester the excess. But the Congressional Budget Office, the official scorekeeper, warned in a July 14 memo that, as introduced, the bill might allow spending to increase -- and by a staggering amount.

"In effect," it said, "that rule would allow the Congress to enact legislation that would increase deficits by an amount in the vicinity of $3 trillion over the 2010-2019 period without triggering a sequestration." (more)