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Wednesday, October 21, 2009

Live Blogging the Tax Summit- Russ Thibeault

Russ Thibeault- economist with Applied Economic Research in Laconia.

Thibeault presentation is entitled “What is New Hampshire’s New Normal?”

He says he’s heard surprisingly few complaints about New Hampshire’s tax system from the business community, though he does hear discontent about property taxes. He says the current system is pretty good. “It does contribute to the New Hampshire Advantage.”

“I do know the perfect tax system,” Thibeault added. “The system that taxes all of your very hard, and me not at all.”

He says New Hampshire’s job growth, which he calls the bedrock of New Hampshire’s economy, had dropped dramatically. He totals the number of jobs added by decade:
1970’s- 118,300
1980’s- 137,200
1990’s- 93,000
2000’s- 14,600 (as of 2008)

He doesn’t think the declining rate of job growth is related to the current recession, but a long-term trend. He also says that while the worst of the national downturn is over, New Hampshire continues to lose jobs just as quickly.

Thibeault argues that it's not clear which sectors will energize New Hampshire's economic future, with growth coming mostly in government and health care.

Thibeault concludes that even before the recession, New Hampshire shifted into a slow-growth mode. He says despite a strong economy, "it's difficult to imagine a return to old growth rates." He says the lack of a sales and income tax, along with a business-friendly government and lifestyle factors, all lead to the New Hampshire Advantage. He says that even with an income tax, New Hampshire would still have a lot going for it, but that it would shatter the perception of New Hampshire as a competitive state.

He doesn't expect revenues to rise, and says increasing business taxes would inflict damage on the business community in the face of a soft economy.

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