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Thursday, October 22, 2009

Live Blogging the Tax Summit- Recap

Joe Magruder- former New England news editor for the Associated Press.

Magruber is recapping the large amount of information heard by the Committee over the past two days.

He says that that the sheer volume of information conveyed shows that the event was a success. He says that the Committee asked all the speakers to keep the focus on revenues, and Magruber says that it happened, though the Committee also heard from many speakers on the related issue of spending.

He hopes that there will be equal enthusiasm for a comprehensive look at how the state spends money over the next biennium. He says as tough as it has been to debate income taxes, he can't wait until someone tries to get rid of local fire departments and school boards.

Multiple speakers reminded the Committee of the 1992 KPMG study concluding that New Hampshire has a structural deficit, where given spending trends outpace the growth of revenues. He mentions that Charlie Arlinghaus argues taxes have grown over the years faster than Gross State Product, while an earlier speaker took the opposite view.

Magruber says some applaud the structural deficit because it forces the Legislature to take a close look at the budget every two years. He says General Fund revenues have fallen significantly as a segment of the total state budget.

Magruber predicts that while the recent budget debate was tough, the next budget is shaping up as even tighter. He asks if the current economic downturn is a temporary crisis, or if New Hampshire is facing a long-term need to restructure its finances.

Magruber was struck by the depth of concern over the state's ability to generate jobs when it comes out of recession, which may not be for 6-12 months. He says some potential vulnerabilities in the New Hampshire economy predate the recession, and may be masked by the current climate. He recalled Russ thibeault's concern that lower job growth may be "the new normal" for New Hampshire.

Magruber says that troubling demographic trends on migration and aging show New Hampshire's economy is changing, which will make future revenues scarce, and fiercer competition among states for high-tech jobs.

He says that the ultimate goal of economic development, through tax policy and other means, should be attracting highly educated and talented employees and the companies that hire them. New Hampshire has traditionally this through low taxes, a high quality of life, and being business friendly. He pointed out that New Hampshire doesn't have low property or business taxes, but still has a low tax burden overall.

He says panelists largely agreed that New Hampshire's tax system should be simple, competitive, transparent, adequate to cover spending needs, and fair. Getting to those goals will always be a source of disagreement, for the Legislature to decide.

Magruber promises to draft amore extensive written report over the next two weeks.

The House Ways and Means Committee is posting audio of the entire session, as well as any documents handed out by the speakers on its website.

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