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Thursday, April 30, 2009

Good news for Chrysler and taxpayers

UPDATE- Never mind.
President Barack Obama announced Thursday that Chrysler would head into bankruptcy with the aid of up to another $8 billion in taxpayer money, a last-resort attempt to quickly restructure the struggling giant. He blasted hedge-fund creditors whom he said held out for a richer deal.

Chrysler will file for bankruptcy, rather than bureaucracy, after negotiations for a taxpayer-financed bailout broke down. This means the flailing U.S. automaker will get to restructure and perhaps come back under competent management. The Washington Post has more:
Under the administration's detailed plan for a "surgical bankruptcy," ownership of Chrysler would be dramatically reorganized, the leadership of Italian automaker Fiat would take over company management and the U.S. and Canadian governments would contribute more than $10 billion in additional funding.

Company and government officials had feared that a bankruptcy would stain the brand, shake customer confidence and erode sales, but the administration said it would seek to use the process to create a new Chrysler company. Its ownership would be divided, with the company's union retiree health fund receiving a 55 percent stake, Fiat would claim as much as a 35 percent share and the United States would take 8 percent. The Canadian government would receive two percent.

Years of building cars that were too expensive and not reliable enough stained the brand. Bankruptcy merely acknowledges reality. This gives Chrysler a chance to make up for decades of bad decisions and come back to compete in the highly competitive automotice marketplace.

Of course, what's best overall isn't best for everyone involved. Employees will be probably be better off working for a car company with competitive wages than not working for a defunct car company with higher wages. Retired workers will get hit. There is no way that Crysler could ever have afforded the pension promises it's made over the years, and bankruptcy opens the door to renegotiating those commitments.

A polically-mediated bankruptcy, with politicians picking how and when the company restructures, isn't optimal. But it's probably going to lead to a more competitive company than the disasterous GM bailouts.

That Wasn't Me!


Presidents get far to much blame and far too much credit for the performance of the national economy. But is is strange that President Obama wouldn't take credit last year's record deficit, a deficit he helped created with his votes in the Senate, and which he would quadruple this year under his proposed budget. The AP fact checks the President's deficit dodge:
"That wasn't me," President Barack Obama said on his 100th day in office, disclaiming responsibility for the huge budget deficit waiting for him on Day One. It actually was him — and the other Democrats controlling Congress the previous two years — who shaped a budget so out of balance.

And as a presidential candidate and president-elect, he backed the twilight Bush-era stimulus plan that made the deficit deeper, all before he took over and promoted spending plans that have made it much deeper still.
We present the Obama "First 100 Days" Theme Song:

Wednesday, April 29, 2009

WGIR Podcasts

NH Watchdog's Grant Bosse joins Charlie Sherman, Katrina Swett, and Steve Marchand on WGIR's weekly political roundtable.

Topics include Arlen Specter's party switch, President Obama's First 100 Days, Swine Flu, and a busy day of controversial issues in the State Senate.

Download
Part I

Part II

Listen online

Watchdog on the Radio

Grant Bosse joins Charlie Sherman on WGIR's Political Roundtable at 8am, along with Katrina Swett and Steve Marchand.

Listen at AM 610, or wgiram.com.

No backroom deals in state budget

By CHARLES M. ARLINGHAUS

Governments and budgets are about elected officials making choices on behalf of the people who elect them. The current budget is as difficult and as controversial as any in recent history. This year, with so many decisions yet to be made and even the House regarding its own product as half-finished, an open debate must not be sacrificed to backroom deals and sudden, undebated policy changes.

Both the governor and, particularly, the House have made significant steps in the direction of open government and transparency. In the Senate, the process often becomes murkier.

The governor's budget submission is usually the most transparent and easiest to understand. By law, he is required to include summary charts and other material, which take the form of a 40-page executive summary. Although written as a public relations document, the summary helps make most major changes readily apparent and is the foundation of early budget debate.

This year, the actual budget document was made easier to read and more transparent, resulting in a roughly 2,000-page document, nearly double its previous length. The most compelling change was the addition of job totals for each program and category of the budget. Unfortunately, the House budget removed this information and reduced the budget by about 1,000 pages. It takes up less space, but at the expense of important information.

Nonetheless, the House made great strides in its transparency efforts. It is easier to be critical (or supportive, I suppose) of the things the House did because the budget is easier to access and understand. In the past, the House budget came without any of the explanatory materials the governor's budget included.

This year, Rep. Marjorie Smith and the Finance Committee she chairs put together a document similar to the governor's executive summary. While it helps make the case for the committee's changes, it also enables people who disagree with those decisions to explain what they see wrong with the budget. In short, it leads to debate, which is the basis of representative government. I hope that in the future the budget law will be changed to make this good idea a requirement.

Now comes the hard part. As the Senate takes over and a deadline to finish looms, all too often open government is sacrificed to backroom deals.

The budget is often finished at the last minute without any time for the bulk of the Senate to examine it in detail. Just two years ago, I debated a thoughtful senator about the budget. She hoped the details I cited were wrong (they weren't), but she hadn't been able to look at the details and had trusted Senator So-and-so to provide her with information. In the end, people of both parties had to trust their own inside sources because of the rush and lack of information.

The final Senate version and also the final committee of conference compromise should include a summary much like the governor and the House included and three full days at a minimum to examine it before a vote. This is not some radical conservative idea. It is what President Obama has pledged to work toward.

Second, the final product should not include new taxes or new programs that have not been part of the debate before. Each new tax, for example, should have been discussed and vetted before inclusion in the final budget. In the House side, after complaints that new taxes didn't have a full hearing in committee, amendments allowed separate debates on each of six separate taxes. There should be no last minute surprises.

Third, one of the oldest tricks in the legislative arsenal is to "solve problems" at the end by merely adjusting revenue estimates. We can't agree on another $10 million to cut, so we merely say that upon reconsideration, we think taxes will rise by an amount that is higher by a very convenient number.

By next week, we will have 10 of 12 months of the current fiscal year in hand, including the most important months for almost every tax. There is no information that will come to light over the next six weeks to significantly change the estimates of how much we might raise. Once a revenue number is set, it should be locked into place to avoid accusations of gamesmanship in the process.

The final budget will cause much debate over choices that are made, but we can ensure that each of those choices is transparent and open to debate so our government is held accountable.

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

Tuesday, April 28, 2009

Raymond Shakir: Don't let them turn NH into a high-tax state

Raymond Shakir of North Conway pens a column in this morning's Union Leader, arguing that there are two competing premises for governing New Hampshire.

The first is effeciency and less spending:
The second argument, espoused by many in the current leadership, is one based on the belief that our current fiscal crisis is, among other things, a result of not collecting enough taxes. They openly advocate countless fee and tax increases. Furthermore, they campaign on the creation of a "fair and just" tax system, not by reducing the need to tax, but by increasing existing taxes and instituting new ones.

Shakir goes on to point out that effort to reduce property taxes in other states by replacing them with new taxes hasn't worked out that way:
The current leadership preaches that these taxes would significantly offset real estate taxes. That is not true. Here is proof: Maine, Massachusetts, Rhode Island, New York, New Jersey, Connecticut, Vermont: take your pick, on average, their real estate tax rates are roughly comparable to or somewhat lower than New Hampshire's. However, their sales and income taxes are nothing short of punishing. They have an overall tax burden much higher than here in New Hampshire.

Furthermore, without question, New Hampshire's lack of such taxes creates a tremendous advantage in terms of attracting business and consumers to this state. Instituting sales or income taxes will no doubt destroy that advantage and decrease state revenues. The result will be even higher sales and income taxes.

Amendment X: Alabama Tea Parties

Gary Palmer of the Alabama Policy Institute writes about the Tea Party movement, and the reaction to it from traditional media sources:

But the tea parties had no angry, profanity-riddled chants against America, no community organizations busing in protesters, and certainly no liberal celebrities demanding change. Ordinary people who have never protested nor carried signs but are concerned about the future of our country and the futures of their children and grandchildren were willing to wait in bumper-to-bumper traffic just for the opportunity to stand with others and demand that our government change its ways. What happened at the tea parties was not a protest against America at all; it was a protest against Republicans and Democrats in power who are enacting laws and policies that will destroy America.

Something else seems to be at the root of the reaction of liberal elites to the tea parties, and I think it is that they loathe people who refuse to submit to the liberal agenda. Even White House spokesman Robert Gibbs acted as though nothing significant was happening around the nation stating that he “… didn’t know if the President was aware of the events.”

Friday, April 24, 2009

Hearing landowners: Legislators are finally listening

The Union Leader editorializes about changes to New Hampshire's Shoreland Protection Act, and is glad landowners are standing up against a massive increase in the state's power over private property, and that lawmakers are listening:
In the last legislative session, lawmakers updated the act by piling on a whole bunch of new regulations. Property owners objected, saying the new rules were onerous, but they were ignored. Thankfully, it didn't take long for legislators to get the message that they had messed up.

Sen. Martha Fuller Clark, D-Portsmouth, has introduced a bill, which has already passed the Senate, to undo some of the regulations passed last year. It clearly needs to pass, though with amendments.

Current law does not allow people with homes on protected waterways to build walkways or driveways. It allows municipalities to seek exemptions for commercial or industrial construction, but not for residential construction. SB 134 changes these and other overly strict regulations.

Thursday, April 23, 2009

Amendment X: Alabama Tea Parties

Gary Palmer of the Alabama Policy Institute writes about the Tea Party movement, and the reaction to it from traditional media sources:
But the tea parties had no angry, profanity-riddled chants against America, no community organizations busing in protesters, and certainly no liberal celebrities demanding change. Ordinary people who have never protested nor carried signs but are concerned about the future of our country and the futures of their children and grandchildren were willing to wait in bumper-to-bumper traffic just for the opportunity to stand with others and demand that our government change its ways. What happened at the tea parties was not a protest against America at all; it was a protest against Republicans and Democrats in power who are enacting laws and policies that will destroy America.


Something else seems to be at the root of the reaction of liberal elites to the tea parties, and I think it is that they loathe people who refuse to submit to the liberal agenda. Even White House spokesman Robert Gibbs acted as though nothing significant was happening around the nation stating that he “… didn’t know if the President was aware of the events.”

Landowners upset at "Shoreland Protection Act"

John DiStaso reports in the Union Leader about the growing opposition from landowners over the consequences of changes to New Hampshire's Shoreland Protection Act:
Under the current law, the Department of Environmental Services "can come on to our land 'for cause' at any 'reasonable time,' unannounced and without permission, which is certainly an invasion of privacy," Peter Rice of the New Hampshire Shoreline Coalition told the House Resources, Recreation and Development Committee.

"Here we are planting the seeds of a big brother government that is unaccountable and outside any due process."

He said fines for those who violate the Shoreland Protection Act can run as high as $20,000, which, he said, "is completely excessive and not the New Hampshire way."

Obama's 'cuts': He's already spent it all

The Union Leader editorializes on the President's proposed budget cuts, comparing the $100 million in proposed savings to the trillions going out the door from the new Administration:
Now, we like the President's cuts. Yet we couldn't help but notice that they total the exact same amount of money the President had set aside two days earlier for microlending projects in Latin America and the Caribbean.

The fact is, the President has already spent all of the "saved" money and more. (Fully $80 million of the $100 million in microlending will be borrowed because Washington doesn't have it.) The President's budget puts the government $1.2 trillion in debt this year alone.

Wednesday, April 22, 2009

Happy Earth Day

Save the Earth! Support the Free Market!


Deep in southern Siberia not far from Russia’s border with Mongolia is the “Blue Eye of Siberia” … the deepest and largest (by volume) fresh water lake in the world. Formed in an ancient rift valley, Lake Baikal is home to more than 1,700 species of plant and animals, two thirds of which can be found nowhere else in the world.

Despite its 25 million year age, Baikal’s life sustaining beauty almost did not survive communist rule. Russian scientists believed that Baikal’s pure water would help produce better rayon cord for airplane tires. The scientists turned out to be wrong and the aviation industry switched from rayon cord to metallic cord in tire production. In a free market system, the plant would have closed and resources would have been allocated elsewhere. But under communism, jobs were the number one priority, and the factory supported 3,500 of them. So it continued polluting the lake for decades unabated.

Big government’s failure to balance environmental quality with other economic goods is not limited to communist Russia. Throughout history big government has a well established track record of tolerating and even perpetuating environmental degradation. The left knows this, which is why they have tried so hard to drape their latest big government plans in free market rhetoric.
From the Heritage Foundation's blog, The Foundry.
Lots of great stuff up there today. Just keep scrolling.

17 minutes of savings

Imagine if the federal government shut down for 17 minutes. Maybe the President ordered all federal employees to watch his 2004 Convention Speech or everyone on the federl payroll took personal time to try to buy tickets to see Simon and Garfunkle in New Zealand.

That would save as much money as President Obama's new effort at fiscal discipline. Thanks to Bloody Mary Breakfast for crunching the numbers:
Yesterday, President Obama challenged his cabinet to put a man on the moon this decade trim $100 million from the budget. I hope he didn't spend too much time explaining this sweeping change from George Bush's spending bonanza.

FY2009 Budget: $3.107 trillion
FY2009 Budget per minute: $5.91 million

There you have it, 16 minutes, 55 seconds of change we can believe in. Really. Change. As in the stuff you find under the couch cushions.

Of course, is the President was really looking for a fast way to cut spending, I have an idea that could save him money in just fifteen minutes.

NH's revenue picture still bleak

Norma Love of the Associated Press reports on New Hampshire's revenue reports. To use a technical term, it ain't good:
Revenue Commissioner Kevin Clougherty told Senate legislators Tuesday that business tax receipts so far were 17 percent behind collections for the same time last April. Clougherty said he expects more tax returns will be filed before the end of the month, but doesn't anticipate a big turnaround in the state's tax income or the economy overall.

April is one of the state's best months for business tax collections, which produce nearly one-quarter of New Hampshire's general tax revenue. The Senate Finance and Ways and Means committees will study the month's receipts before producing a revenue forecast and the Senate version of the state's two-year budget, beginning July 1.

Earlier this month, the House passed an $11.5 billion budget based on spending cuts, federal stimulus money, new taxes and increases in existing taxes. During debate in the House, Finance Chairwoman Marjorie Smith, D-Durham, said she hoped the Senate would improve the House version after lawmakers have additional information on tax receipts.

Following our neighbors to the land of low employment

By CHARLES M. ARLINGHAUS

New Hampshire usually leads the rest of New England out of a recession, and as lawmakers put together a new budget, jobs should be first on their minds. However, current efforts in Concord pull up the welcome mat for jobs and threaten to undo New Hampshire's reputation as New England's first choice for new business.

The Northeast part of the United States is generally a land of high taxes and excessive business regulation. For decades, New Hampshire has stood out among its neighbors as a business-friendly state with welcoming regulatory and tax climates. The Wall Street Journal once referred to us as an island in a sea of socialism.

That perception may be a slight exaggeration, but there is a reality behind it. The Tax Foundation's annual study of business competitiveness routinely finds New Hampshire among the top 10 states, and our three neighbors among the bottom 10. Although our corporate taxes are among the highest in the country, lack of an income or capital gains tax is a significant incentive to entrepreneurs and business expansion in general.

One of the state's largest employers, BAE Systems, has its office on a lot that includes the state border. It is not mere coincidence that the company built on the New Hampshire side of the line.

While Boston has the significant cultural and educational advantages of a large metro area, New Hampshire has managed to carve out a low-tax brand in the Northeast. That brand is threatened by recent legislative actions.

In media reports, we hear regularly about the net number of jobs gained or lost. But what actually happens is that each year tens of millions of jobs are added to the economy and tens of millions are eliminated. For example, in the first quarter of 2008, we lost a net of 270,000 jobs. A total of 7.1 million jobs were created, but 7.4 million were eliminated.

So even in a down economy, there will be something close to 30 million new jobs created in the country this year. What we want is for New Hampshire to attract a disproportionate share of those jobs, as we have historically done.

Unfortunately, current legislative action is sending the opposite signal to entrepreneurs creating jobs and to companies considering opening new facilities.

The biggest bad signal is the imposition of a capital gains tax. With the high level of exemption, it may not affect you or me. But it is a tax on entrepreneurs and on investment in new business and the jobs that go along with them. The people who create jobs do so not for fun, but to make money. They want to create a business that has value and makes them cash. In the process, they employ some of us.

In today's economy, most of these businesses can be located in almost any state. In that sense, we are competing for their business. We want Mr. Smith to start his business here, not in Tennessee or in Delaware -- not because we love Mr. Smith, but because his enterprise brings jobs and other related activity to us. Mr. Smith is a businessman. If locating in New Hampshire will cost him more, he'll go elsewhere. The capital gains tax is a giant warning sign to him that locating here will not be as lucrative as locating elsewhere. It is perhaps the surest way to discourage job growth in New Hampshire.

In addition to this poorly conceived idea, the Legislature has also passed an onerous law that makes it harder to close a plant here than in the vast majority of other states. It, therefore, discourages opening one in New Hampshire. A bipartisan effort to lower the insurance tax and keep insurance jobs here has been suspended, sending the message to firms in that sector that we weren't serious about wanting them here.

With the budget situation still a mess, other businesses will be on the firing line. With our business taxes already among the highest in the country, any effort to increase them or change the effective rate will cost us jobs and job growth. Trying to squeeze more money out of the businesses we have will encourage them to leave and others to stay away, essentially sacrificing the long-term health of the state for a temporary budget fix.

We can emerge from the recession the economic leader of the region we've been for decades or become an economic backwater like some of our neighbors. The Legislature is two steps down the wrong path. It's time to reverse course, not go further into the woods.

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

Tuesday, April 21, 2009

They didn't even know what they were protesting

BUMPED and UPDATED WITH AUDIO:


Did you attend a Tea Party protest last week? If so, Ray Buckley thinks you've lost your mind.

I'm surprised by the public reaction to the Tea Party movement from leading Democrats. Rather than co-opt the issue from Republicans who lost credibility of fiscal hawks, Buckley and his colleagues have chosen to ridicule anyone standing up against out of control spending:

He ridiculed the "Tax Day" protesters who rallied last week across the state, denouncing federal spending surges and a variety of "-isms."

"They looked like they had lost their minds," Buckley said. "They didn't even know what they were protesting."

Amendment X: Government Comic Books in Tennessee

Taxing Tenneessee points out another great use of tax dollars, a comic book in which the floating head of Mike Ditka explains the Federal Reserve System:

I hear Universal has Kevin Smith attached to direct the movie.

How can you save more money than the federal government?

Don Boudreaux of Cafe Hayek crunches the numbers on President Obama's proposal to cut $100 million from the federal budget:
To put this budget "cut" in perspective, suppose that the typical American family, earning $50,000 annually, plans this year to run a budget deficit proportionate to the deficit that Uncle Sam will run. Such a family would plan to spend $75,000. Now suppose that this family, seeking to signal its faux-commitment to financial prudence, promises spending cuts equal, in proportion to its budget, to the cuts announced today by Mr. Obama.

This family would declare - surely with much fanfare - that it will reduce its planned expenditures for the year by $2.08! Perhaps it might promise to survive the year with one less gallon of gasoline or with one less cup of coffee.

So, with the money I've saved on ice coffee because of Dunkin Donuts $.50 promotion, I've saved a higher proportion of my annual budget than President Obama proposes over the next 90 days. Slow down, Mr. President. I'm not sure we can absorb these massive cuts that quickly.

PS- I love $.50 Ice Coffee Day.

The Death and Life of American Manufacturing

How much has American manufactuing declined in the last decade? Afterall, NAFTA and the giant sucking sound took all the jobs, China is making everything we buy, and American factories are ghost towns right?

Actually, American manufacturing hasn't declined over the past decade. It's doubled:
As Stephen Manning of the Associated Press acknowledged in a rare "just the facts" story in mid-February, the U.S. "by far remains the world's leading manufacturer," producing goods valued at a record $1.6 trillion in 2007 — nearly double the $811 billion produced a decade earlier. Indeed, the AP writer noted, "For every $1 of value produced in China's factories [in 2007], America generated $2.50." Not bad for a country that doesn't produce anything anymore.

Not only is the U.S. still the world's leading manufacturer, but there are many good reasons that companies will continue to manufacture here and invest in new plants and equipment. According to the Census Bureau's 2007 Annual Capital Expenditures Survey, released on Jan. 22 of this year, U.S. nonfarm businesses invested $1.36 trillion in new and used structures and equipment in 2007, a 3.9 percent increase over 2006. More than $484 billion was spent on new structures alone.

Harold Sirkin's piece in Business Week outlines what the U.S. still makes and why the death of manufacturing has been exaggerated. He also offers advice on how public policy can address the issue:
For many years now, Washington has been attempting legislatively to discourage U.S. plant closings. But the closing of certain production facilities is often a sign of renewal: a naturally occurring phenomenon in which the old and outdated is replaced by something new. As Manufacturers Alliance/MAPI Chief Economist Daniel Meckstroth has noted, the "death rate in manufacturing" really isn't significantly higher than in the past. What has changed, Meckstroth says, "is that the creation of new factories has dropped so dramatically."

If Meckstroth is right and the problem is that too few new factories are opening, Washington should encourage companies to invest in new plants and equipment. It also needs to identify and change existing policies that discourage the building of new factories.

A recurring theme in my conversations with U.S. CEOs is that the effort it takes to build a new plant is barely worth it anymore. There's just too much red tape, too many hoops to jump through, too much bureaucracy, too many special interests fighting you tooth and nail, too many unnecessary, if not nonsensical rules to contend with, too many permits and legal roadblocks.

None of this eases the pain of someone who lost their job at a closed plant, whether it's in Groveton or Detroit. But the blame can't be placed on trade. Increased productivity means that we're procuding more goods with fewer people. A shift to high-value manufacturing means that products we built decades ago are no longer rolling off the assembly lines. And the use of computers and robotics raises the bottom rung for factory jobs, requiring greater education and training. That certainly has consequences that could be addressed through public policy, but if we never identify what's actually happening, we'll never solve the problem.

When is $100 million bigger than $8 billion?

When the White House wants to trumpet $100 million in potential budget cuts, while downplaying $8 billion in earmarks.

Jennifer Loven and Jake Tapper, neither of whom has ever been accused of being part of the Vast Right Wing Conspiracy, bust White House Spokesman Robert Gibbs on the President's rather meager commitment to fiscal discipline.

Watch the video from the White House Press Briefing.

And on the same day that the Administration says it will try to find $100 million to save, it proposes another $100 billion in spending.

The Heritage Foundation puts Barack Obama's newfound zeal for budget cutting into perspective:



Build a time capsule. Write a letter to your great-grandchildren. Thank them for all of their money.

Monday, April 20, 2009

Using Rooms and Meals for Building Aid

In the Nashua Telegraph, Kevin Landrigan reports on a plan by Nashua Rep. David Campbell to set aside a portion of the Rooms and Meal Tax to pay for the state's Building Aid Program:
Democratic state Rep. David Campbell said the plan would be a way to keep the state's promise for building aid while allowing for enough state-backed debt to finance its own public work projects.

"This is a way to get us through the next biennium," Campbell said Thursday after he and Rep. Candace Bouchard, D-Concord, chairwoman of the House Public Works and Highways Committee, offered the proposal to the Senate Capital Budget Committee.

"This allows the discussion to take place in the state Senate, where it belongs," Campbell said.

As proposed, it would dedicate one-half of 1 percent from the room and meals tax to pay for bonds covering the state's share of school construction projects.

"It would be up to the Senate to decide if it should raise the tax or use one-half of 1 percent of the existing tax," Campbell said.

First of all, the state already dedicates a portion of the Rooms and Meals Tax to revenue sharing. Gov. Lynch's budget proposed ending it, but the House budget restored it.

Secondly, Rooms and Meals revenue are already being spent. Dedicating them to a specific program does nothing to actually solve the problem. It just takes money from other spending.

Finally, if the Building Aid Program is such a high priority for Campbell and the Public Works Committee, they could have included more than $0 for it in the budget. They decide to punt, and let the State Senate figure out how to pay for a program that will almost certainly be added back into the House budget.

Unemployment Insurance Tax Going Up

Under the State House Dome, Tom Fahey reports in the Union Leader that New Hampshire businesses will be paying more:
The Department of Employment Security is looking at options under its emergency powers to insure the solvency of the state's unemployment trust fund.

The trust fund stood at $96.7 million on Wednesday, down from $200.7 million in September. Deputy Commissioner Darrell Gates said the fund is paying out benefits of $6 million a week. Quarterly employer payments due by May 2 should be in the $50 million range.

When the fund is flush, at $225 million or more, many employers get discounts on their tax payments. The DES eliminated discounts in March. Now it's getting ready to bump up the rate for all employers by a half-percent. The only question is when, Gates said.

Friday, April 17, 2009

Spending the Stimulus- Transportation

Grant Bosse reports on how New Hampshire is spending the transportation portion of the federal stimulus package, and efforts to increase highway spending in the future:

Manchester Tea Party- complete audio

The guys at Granite Grok have posted audio from every speaker at the Manchester Tea Party.

I really liked Doug and Skip's speech. They were really fired up.

The Concord Monitor has posted a picture gallery from the Concord Tea Party.

And Pajamas Media has an event site where you can submit your pictures and comments about the Manchester Tea Party.

Thursday, April 16, 2009

Manchester Tea Party- web video

Grant Bosse reports on the Tax Day Tea Party at Veterans Park in Manchester:

Capital gains tax would harm state's workforce

It's been a busy few days here at NHWatchdog, and I missed Bill Ardinger's piece in the Concord Monitor outlining why taxing capital gains will harm far more than the "rich":
New Hampshire's capacity over the next decade to provide a good economy with good jobs for its citizens will depend on its ability to attract capital from people who are willing to take risks to create new businesses and jobs. And make no mistake about it, decisions by entrepreneurs to invest capital are always made on an "after-tax" basis, and are therefore highly sensitive to tax differences among jurisdictions.

Without question (at least before Wednesday, when the House voted in favor of a capital gains tax), New Hampshire's top competitive advantage compared with other states is in the market for entrepreneurs. We offer these job-creating agents a range of important benefits: access to an educated labor force; a good public school system for their children and their employees' children; no sales or use tax on items purchased by the business; no income tax on wages paid to workers; and no capital gains tax if the business is successful. In effect, just miles north of Boston, we offer a highly competitive "product" to attract entrepreneurial capital and jobs from larger economic centers.

Don't wreck New Hampshire's advantage

Tim Sink, President of the Concord Chamber of Commerce, pens an op-ed in the Concord Monitor urging lawmakers to protect New Hampshire's business-friendly climate:
New Hampshire, its citizens and its businesses are facing tough economic times. While we still enjoy a lower than average unemployment rate, those numbers are climbing. We are seeing more layoffs and foreclosures. Businesses and nonprofits generating less income are trying to maintain their workforce and assets with less access to lines of credit and other financing sources. This should be a time when our elected leaders are seeking ways for New Hampshire businesses to survive and thrive in a lean environment. Instead, we are witnessing a series of legislative proposals that will further diminish New Hampshire's favorable tax and business climate and erode the New Hampshire advantage.

Tea Party Coverage

UPDATE- Fosters reports on Tea Parties in Dover, Rochester, and Portsmouth
A taxing day: Residents across Seacoast express anger at 'Tea Party'' events

Dan Touhy in the Union Leader
Granite Staters say: 'Enough is enough' in 'tea party' protests around the state

Daniel Barrack in the Concord Monitor
Motley bunch at tea 'revolt'

Joseph Cote in the Nashua Telegraph
About 1,000 crowd park for anti-tax rally

Live Blog from Granite Grok

Wednesday, April 15, 2009

Manchester Tea Party- Charlie Arlinghaus

Josiah Bartlett Center President Charlie Arlinghaus addresses the Tax Day Tea Party at Veterans Park in Manchester:

Concord Tea Party- web video

Grant Bosse reports from the Tax Day Tea Party at the State House in Concord:

We knew so little about our good friend

Concord radio legend Gardner Hill passed away on Sunday. Ray Duckler has a great piece in this morning's Concord Monitor. I'm not going to post a quote, because you should read the whole thing.

Gardner Hill was one of the voices of New Hampshire radio that dominated the airwaves when I was getting started. He was an icon of local broadcasting; an industry that doesn't really exist anymore. He will be missed.

Tax protest rallies today in Concord, Manchester

Dan Touhy offers a preview of today's Tea Parties in the Union Leader, and for some reason quotes me:
The rally in Manchester is led by the New Hampshire Advantage Coalition. Organizers expect around 700 people will attend the event, which is located at 119 Concord St.

The protest is one of several around the state that coincide with the deadline for filing federal income taxes with the U.S. Internal Revenue Service.

Grant Bosse, a Republican who ran for U.S. House last year, said he would attend both the Concord and Manchester rallies.

Though speakers will criticize federal stimulus spending and corporate bailouts, it is not exactly a political rally, according to Bosse. He describes the protest as a matter of policy, not personality.

"We've had a kind of failure of the political class in both parties," he said.

NH Watchdog will be filming both the Concord and Manchester Tea Parties and plans to post video tonight if the sound comes out okay.

Watchdog on the Radio

Update: WNTK bumped to 6:40.

WNTK's "Wake up New Hampshire"
6:25
AM 1490 and FM 99.7
Listen Live
Grant Bosse will be discussing Tax Day Tea Parties

WGIR Morning News "Political Roundtable"
8:05am
AM 610
Listen Live
Grant Bosse will be joining Charlie Sherman, Drew Cline, and Jim Normand.

Instead of throwing tea bags, do something productive

By CHARLES M. ARLINGHAUS

A bunch of so-called tea parties being held today across the state and the country have the potential to either mobilize a useful check to influence policymakers or live up to their namesake, one of the most shameful acts in American history.

Activists around the country have organized a series of protests to take place on the same day federal income taxes are due, which is today. Using TEA as an acronym for "taxed enough already," protesters describe their rallies as tea parties, taking the name from the 1773 protest against tea taxes that we know as the Boston Tea Party.

The general idea is to bring together people who think that taxes are already too high (taxed enough already), and that rather than increasing our taxes in these difficult economic times, policymakers should restrain spending and leave more money in individuals' pockets.

The largest of these events in New Hampshire is the Manchester version at Victory Park at 5:30 this afternoon. It also happens to be the one at which I am speaking.

Although they have adopted the name of the shameful Boston Tea Party, this movement can only be successful if its leaders leave behind that horrible legacy and instead do something productive.

In 1773, colonists were upset at a tax on tea, an incredibly widely consumed beverage at the time. They tried to turn away ships carrying tea that was to be taxed before being sold to consumers. After protests failed, a mob gathered; its members disguised themselves as Indians and destroyed the tea by throwing it in the harbor and ruining it. The value of the shipments ruined would be in the neighborhood of $10 million today.

Upset about taxes, they took it out on someone else's private property while disguised as Indians. I don't like the tax the government is making you pay, so I'm going to destroy millions of dollars of your property. Almost everyone outside of Boston thought it was a huge mistake. Even Ben Franklin was horrified.

But today's protests needn't be as ridiculous and unproductive as the event they are named after. The point of a rally isn't just to gather people together so they can vent about how annoying the policy choices of other people are. Instead, the point ought to be to bring people together so they can more effectively advocate for their preferred choices.

The national financial picture receives a lot of attention and generates a lot of protest. State and local budgets receive much less attention even as they ratchet up spending and pass job-destroying taxes in the midst of a recession.

The simple truth is that pressure for spending is more immediate and more visible than pressure against raising taxes, except during a narrow few weeks before an election. After the election, when budget decisions are being made, there is a steady stream of people who have sensible-sounding ideas for spending more money -- a little bit here and a little bit there.

In the face of a problem like a recession, spending money has the psychological effect of appearing to do something. Restraining that impulse and keeping money in people's pockets is kinder to an individual, but it seems passive and a less forceful answer to the question, "what are you going to do about this?"

Surrounded by constant pressure to maintain certain programs and spend just a little bit more on this or that, human nature dictates that you will succumb at least a little bit in the absence of any countervailing pressure. This suggests an obvious role for people who are "taxed enough already."

While we depend on lawmakers to make choices between competing priorities, they need to hear more often from people who want spending restrained. Most lawmakers hear routinely from people who want more money for some program and almost never from people who want their taxes to go down. During election season, potential voters will complain about higher taxes, but then they go away for two years and leave the playing field to those who will cajole a bit more money for this or for that.

If you're going to protest today, make a commitment to stand up for what you believe by actually doing something that really matters. Contact the people who represent you, not to yell at them, but to lobby for your point of view. They need to hear from you. If you don't intend to do anything else, save everyone some time and just go throw a tea bag in the river and pipe down.

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

Tuesday, April 14, 2009

Watchdog on the Radio

NH Watchdog's Grant Bosse will be a guest on Charlie Sherman's weekly political roundtable Wednesday morning from 8 to 9am. He's scheduled to join Drew Cline from the Union Leader and Jim Normand, former Democratic Executive Councilor on AM610, WGIR. You can listen live online.

And now an early show, 6:25am Wednesday on WNTK's "Wake Up New Hampshire". You can tune in live online here.

Amendment X: Michigan Film Incentive

Our friends at the Mackinac Center for Public Policy have released their fourth video investigating the Film Incentive Program in Michigan. Reporter Kathy Hoekstra finds that the program gave out $48 million in tax credits for movies and TV shows to film in Michigan. The latest report looks at small business that are facing business tax increases, while Hollywood is getting tax breaks.

Hoekstra also looks at one recent film that purportedly brought $3 million into the local economy, and received a $5 million tax refund.

Check out the latest video here.


What is it with bathrooms this year?

The $72,000 bathroom remodel at the State House has been picked up by national media. It's the public women's room on the third floor of the State House, which just happens to be just outside the Speaker and Senate President's offices.

I'm worked on the third floor of the State House. I can't speak for the women's room of course, but the men's room is pretty sweet. Lots of marble, but old fixtures. Not nearly as nice as the pictures of the new women's room. But now that those renovations are done, I'm sure the Legislature will get around to the bduget, education funding, and funding the state's retirement plans.

NH House hearing Thursday on naming state dog

I've always been partial to golden retreivers myself, and german shepherds. Anything but those little pocketbook dogs, and we'll know our Legislature has its priorities in order.
The Chinook – a cross between a husky and a farm dog – soon could be New Hampshire’s official state dog.

The Senate has approved the designation. On Thursday, the House holds a hearing on the proposal.

A group of seventh graders from Bedford are behind the move. The students say the Chinook was bred in New Hampshire and unlike other state symbols, reflects a unique aspect of the state’s history.

Monday, April 13, 2009

Josiah Bartlett Center Releases Building Aid Study

11 School Districts would lose over $1 million each under House Budget

(CONCORD) The Josiah Bartlett Center for Public Policy today released a study of New Hampshire's Building Aid Program, including how much each school district in the state would receive next year under two versions of the state budget. The budget approved by the New Hampshire House last week suspended the Building Aid Program for the next two years. Under this budget, 11 school districts would each lose over $1 million compared to Governor John Lynch's Budget Proposal and the Republican Alternative Budget. Both proposals set aside $83.3 million for Building Aid over the next two years.

"If the Legislature suspends the Building Aid Program this biennium, the costs to local school districts will vary greatly," said Lead Investigator Grant Bosse, who authored the report. "Cities and towns with new schools, or projects approved by voters in March, would see a shift from the state program to their local property taxes."

Under the Building Aid Program, between 30% to 60% of school construction costs, and 40% of SAU construction costs, are reimbursed by the state. The state Department of Education has identified those projects eligible for reimbursement in 2009-2010, totaling $45 million. Each district will receive a pro-rated amount of whatever total is allocated by the Legislature. Based on the $41.65 million recommended by both Governor John Lynch and the Republican Alternative Budget voted down in the House last week, the Josiah Bartlett Center calculated how much each district would have received.

"The amount of Building Aid and how to fund it are questions for the Legislature," Bosse added. "This study will let State Senators know how each school district in the state would be affected by the budget approved by their House colleagues last week."

To download the report, go to http://www.jbartlett.org/.


2009-2010 Building Aid
Alton _____$376,750
Amherst _____$145,252
Barnstead _____$182,164
Barrington _____$214,910
Bartlett _____$11,574
Bedford ______$1,092,909
Berlin _____$336,058
Bow _____$287,645
Brentwood ____$86,978
Brookline _____$118,366
Campton _____$182,445
Chester _____$135,345
Chichester _____$31,460
Claremont _____$136,010
Colebrook _____$191,268
Concord _____$463,442
Con. Valley _____$1,136,255
Conway _____$1,614,414
Cornish _____$1,999
Deerfield _____$25,280
Derry _____$721,687
Dover _____$576,042
Dunbarton _____$41,573
Dresden _____$640,836
East Kingston _____$45,268
Epping _____$196,055
Exeter _____$20,142
Exeter Region _____$2,027,516
Fall Mountain Regional _____$53,246
Farmington _____$345,870
Franklin _____$238,857
Freedom _____$58,436
Fremont _____$81,870
Gilford _____$342,663
Gilmanton _____$44,979
Goffstown _____$562,768
Gorham _____$576,323
Gov. Wentworth _____$238,043
Grantham _____$105,045
Greenland _____$144,227
Hampton _____$86,267
Hanover _____$80,099
Haverill Coop _____$400,180
Henniker _____$59,352
Hill _____$18,017
Hillsboro-Deering _____$381,636
Hinsdale _____$405,592
Holderness _____$69,540
Hollis _____$60,847
Hollis-Brookline _____$367,927
Hooksett _____$287,287
Hopkinton _____$157,406
Hudson _____$301,568
Inter-Lakes _____$158,782
Jackson _____$53,502
Jaffrey-Rindge _____$401,976
John Stark Reg. _____$154,498
Kearsarge Reg. _____$1,459,979
Keene _____$704,233
Kensington _____$56,684
Laconia _____$717,536
Lebanon _____$265,324
Lisbon Regional _____$92,930
Litchfield _____$249,861
Littleton _____$84,943
Londonderry _____$600,828
Lyme _____$21,274
Lyndeborough _____$22,206
Madison _____$55,514
Manchester _____$1,848,998
Marlborough _____$336,898
Mascoma Valley Regional _____$154,001
Merrimack _____$468,333
Merr. Valley _____$1,875,859
Milan _____$64,767
Milford _____$339,132
Milton _____$217,513
Monadnock Reg. _____$300,110
Mont Vernon _____$62,216
Moultonborough _____$212,221
Nashua _____$2,530,698
New Boston _____$52,448
Newfields _____$32,311
Newfound _____$7,089
Newport _____$308,748
North Hampton _____$116,024
Northumberland _____$16,198
Northwood _____$81,249
Nottingham _____$1,665
Orford _____$15,266
Oyster River _____$640,375
Pelham _____$287,287
Pembroke _____$330,790
Piermont _____$11,103
Pittsburg _____$98,913
Pittsfield _____$88,486
Plainfield _____$42,531
Plymouth _____$17,419
Portsmouth _____$940,250
Profile _____$308,827
Raymond _____$466,010
Rivendell _____$70,420
Rochester _____$1,189,791
Rye _____$92,384
Salem _____$135,509
Sanborn Regional _____$846,787
Shaker Regional _____$245,745
Somersworth _____$247,099
Souhegan Coop _____$296,076
South Hampton _____$34,382
Stewartstown _____$13,033
Strafford _____$2,658
Sunapee _____$77,239
Tamworth _____$45,414
Timberland Regional _____$1,021,290
Wakefield _____$47,246
Warren _____$6,190
Washington _____$18,432
Waterville Valley _____$44,317
Weare _____$356,852
Westmoreland _____$12,630
White Mountain _____$472,472
Wilton-Lyndeboro _____$142,487
Winchester _____$57,298
Windham _____$1,141,563
Winnacunnet _____$461,815
Winnisquam _____$689,376

State Total _____$41,650,000

Weekend Roundup

Under the State House Dome, Tom Fahey leads with the state budget debate:
IT WAS ALL about taxes last week. The House's $11.5 billion spending plan for the next two years relies on existing taxes, higher taxes and new taxes.

And, Republicans were quick to charge, the good chance of higher property taxes on top of it all.

The House budget, passed by the Democratic majority, leaves a $133 million hole in local aid. That's a lot of money for local government to make up, and it has only one place to look:- property taxes.

Democrats argue the budget also increases aid to education by $123 million. That education money can't be used to plow roads or fix a town-hall roof. But it does offset some of the pressure schools used to put on property taxes.

An additional $37 million or so in local road funding also eases property tax pressures, Democrats say.
Lauren Dorgan gives State Senators a Easter present of not having to talk about controversial social issues by penning a preview of the budget debate in the Senate in her column in the Concord Monitor:
It being a holiday, I decided to give senators a little break from being cornered on social issues and instead checked in with them on the budget. Senate Finance has quite an interesting lineup: Manchester Sen. Lou D'Allesandro, the happy warrior for expanded gambling, chairs the committee, backed up by spry vice chairman Harold Janeway of Webster, a leading anti-gambling voice.

Asked if there are any absolute non-starters for him in the budget, Janeway said, "I don't think so. Because gambling isn't in the budget."

Says D'Allesandro, of all of the taxing measures: I'm not enamored with (the tax on gambling winnings), and I'm not enamored with the legacy tax, the estate tax," he said. "I'm enamored with non-tax revenue because I think that makes a lot of sense."
Where do you find that? "I find that through the expansion of gaming and the offering of the licenses to people," D'Allesandro said.

Neither man said he could predict whether the Senate Finance Committee would get behind gambling as a budget fix. "I'm not an oddsmaker," said D'Allesandro. "I'm a realist."

The one tax that won't have "any trouble," D'Allesandro said, is the 35-cent-a-pack cigarette tax, which he said is "pretty popular."

Both senators say that the first problem for the Senate is $83 million large - the school building aid money that Gov. John Lynch wanted to borrow. House lawmakers disagreed, stripping it from the capital budget - without adding it to the operating budget, saying that they hoped senators could find a way to finance the program.
In the Nashua Telegraph, Kevin Landrigan leads with the social issues, but also includes a history lesson on the 1990 budget debate when Republican Leadership pushed for higher taxes:
Here's what was in that 1990 tax package that went through when Stratham Republican Rep. Doug Scamman was House speaker, former lobbyist Bill Bartlett of Kingston was Senate president and the governor was current U.S. Sen. Gregg.

Cigarette tax: raised 4 cents per pack.

Liquor tax: a new fee of 96 cents per case charged to distillers.

Telecommunications tax: a new tax of 5 percent on telephone calls, replacing a state tax on telephone company real estate.

Beer tax: raised to 35 cents per gallon from 30 cents.

Room and meals tax: raised to 8 percent from 7 percent.

Gas tax: raised to 16 cents from 14 cents per gallon.

Real-estate transfer tax: raised to 6 percent from 4.75 percent, charged to both the seller and buyer.

Wine discount: cut the break for restaurants buying wine from state liquor stores from 20 to 15 percent.

Bingo tax: increased to 7 percent from 5 percent.

State park fees: increased 25 percent.

Corporate franchise fees: a new levy raising $2.3 million.

Sunday, April 12, 2009

Backyard Economics is BACKWARD Economics

My favorite website, Cafe Hayek, alerts me to a post on Charlie's favorite website, Carpe Diem, about the absurdity of "localism" as an economic philosophy:
Using Backyard Economics logic, Duval County residents should only support Duval County businesses, and should avoid patronizing out-of-county businesses.

But let's go one step further. By the same logic, cities located in Duval County like Jacksonville Beach should only patronize shops, restaurants, and businesses in Jacksonville Beach, and avoid out-of-city businesses. But then the logic would also apply to even smaller geographical areas like neighborhoods within Jacksonville Beach (don't buy "out-of-neighborhood"), a neighborhood resident's own block (patronize only "in-block businesses"), and then ultimately a resident's own household.

In other words, the logic of Backyard Economics for state economies like Florida ultimately leads to an individual household's OWN BACKYARD (literally), and complete and total economic self-sufficiency at the household level (don't buy any "out-of-household" goods or services).


Russ Roberts, who posts at Cafe Hayek, said it well in a lecture I attended several years ago. "Self-sufficiency is the road to poverty."

Washington Post News Alert

Major metropolitan newspapers are shedding readership and revenue. You can blame the Internet, the economy, or an apathetic American public. Just don't question their priorities or the quality of their journalism, because the big papers obviously know what really matters.

I received the following "News Alert" from the Washington Post last night at 11:00pm.

________________________________
News Alert
11:00 p.m. ET Saturday, April 11, 2009
The First Puppy Makes a Big Splash

The biggest mystery of the Obama White House's first 100 days has been revealed: The first puppy -- the one that the Washington press corps has been yelping about for months -- is a 6-month-old Portuguese water dog given to Malia and Sasha as a gift by Sen. Edward M. Kennedy. The little guy's name? Bo.
For more information, visit washingtonpost.com
________________________________
Wow, that news really couldn't wait until morning. Happy Easter!

Friday, April 10, 2009

A deliberate failure: The House's bad budget

The Union Leader editorial page blasts the budget approved by the House yesteday, noting that even those who wrote it don't want it pass in its current form:
Representatives approved spending $11.5 billion (up from $10.2 billion just two years ago) although everyone knew there was not enough revenue to cover the cost. They passed the spending on Wednesday, then yesterday took up the tax hikes and new taxes that would be needed to fund the spending.

Representatives didn't include $83 million in local school construction aid the state has always funded. Instead, they kept that money so they could continue funding social services. Local governments will have to raise taxes if this budget becomes law.

Budget Roundup

Lots of coverage of yesterday's budget debate in the House, where Democrats pushed through an 11% increase in overall spending and a slew of new and increased taxes largely along party lines.

In the Concord Monitor, Lauren Dorgan outlines who will pay for the spending spree:
Few are untouched under the House budget plan, which largely follows that proposed by Democratic Gov. John Lynch. One key difference: While Lynch expected current state revenue to hold steady for the next two years, House budget crafters foresaw a $140 million decline.

Drivers, gamblers, smokers, diners and hotel patrons would all pay new or increased taxes.

The state's wealthiest residents would pay two new taxes crafted by House budget writers: an 8 percent estate tax on inherited estates above a $2 million threshold and the 5 percent capital gains tax on all gains over $5,000 per person. The estate tax is expected to reel in $10 million over two years, while the capital gains tax is expected to bring in $75 million.

State employees who aren't laid off will pay more into their pension system - and those who are laid off would lose for the next two years their "bumping rights," seniority protections fiercely guarded by unions that allow more senior employees to bump junior employees from their jobs. Retired state employees who are under the age of 65 would no longer have free state-provided health insurance; they'd have to pay 11.5 percent of their pensions.

In the Nashua Telegraph, Kevin Landrigan lists jsut some of the many changes to the state's finances:
Among its 197 state law changes to accommodate the budget, the trailer bill would create a new saltwater fishing license of $15 a year and raise annual boat fees and the cost of a motor vehicle inspection sticker along with other fee increases.

It also withdraws $110 million from a quasi-public authority set up 30 years ago to help physicians afford medical malpractice insurance.

Opponents noted the state did not invest any money in this authority and physicians would likely challenge in court the state's right to claim any of it.

Supporters said this move still leaves a $50 million surplus in the account.

Rep. David Hess, R-Hooksett, said taxing capital gains would stifle investment and cause some of the state's wealthiest residents to leave.

"We are targeting first of all our best, our brightest and our most successful," Hess said.

Rep. Robert Walsh, D-Manchester, said the state cannot afford to do without the $75 million the capital gains levy would bring in and taxes only those who made large investment profits.

"This measure will only affect those citizens with an ability to pay," Walsh said.

Tom Fahey outlines some of the policy changes in the bill in this morning's Union Leasder:
In addition to the tax package, the bill makes changes that allow four district courts to close; give the liquor commission flexibility to close stores and sign agreements with private stores; allow tracks to simulcast races from other locations without running live race events, and allow the commercialization of state welcome centers and rest areas.

The bill also eliminates bumping rights among state workers, 250 of whom are expected to be laid off.

Thursday, April 9, 2009

House backs $200M in higher taxes

On the Union Leader's online page, Tom Fahey summarizes some of the new taxes approved by the New Hampshire House this afternoon:
The tax changes are expected to raise $202.5 million over the next two years to support government operations. The gas tax increase should bring in another $125 million, with $37 million of it headed to cities and towns for upkeep of local roads.

Rep. Marjorie Smith, D-Durham, chair of the House Finance committee, said the tax package does not include a broad-based tax, such as sales or income tax.

“It is the best mix we could come up with of revenues that will not bring harm to our economy or our neighbors,” Smith said.

Rep. Neal Kurk, R-Weare, criticized the tax plan and the budget. “We have adopted a budget that spends more than we can afford within our existing tax structure, and the response has been to raise taxes to pay for higher spending,” he said.

Democrats argued that in a deep recession in 1990, Republicans raised and created a series of taxes.

”What we have all day long … is ‘Do as I say, not as I did’,” majority floor leader Rep. Daniel Eaton, D-Stoddard, said, prompting a few boos.

Republicans tried to kill each of the tax measures, but were beaten back each time by the Democratic majority.

Lawmakers approve spending plan

Update: Tom Fahey has an excellent write-up on the budget in this morning's Union Leader. It doesn't appear to be available online.

Lauren Dorgan summarizes the state of the budget in this morning's Concord Monitor:
House lawmakers last night approved $11.5 billion worth of spending in the next two-year budget. Today, they will vote on how to pay for it.

The House approved by a 193-174 margin the spending plan for 2010 and 2011 recommended by the Democrats on the House Finance Committee - the plan that involves scores of layoffs for state employees, preserves some local aid while suspending other programs and sends more funding to many social and human service programs than Gov. John Lynch recommended.

Democratic leaders said that as the national recession continues and state revenue sinks, they made hard choices to keep down spending; their plan represents about a 2.5 percent increase in general-fund spending.

"We struggled mightily to make sure we provided essential services to those people who had no other opportunity than to turn to the state," said Rep. Marjorie Smith, the Durham Democrat who chairs the Finance Committee.

Republicans said those cuts didn't go far enough and, as a consequence, will make taxes climb too high.

"If this spending spree by the majority party continues, there will never be enough tax and fee increases to fund it," said Minority Leader Sherm Packard, a Londonderry Republican.
Check out our extensive budget coverage on NHWatchdog's new YouTube Channel.

Wednesday, April 8, 2009

Charlie Arlinghaus on NH Today

Josiah Bartlett Center President Charlie Arlinghaus joined Jack Heath on "NH Today" on 107.7 WTPL to discuss the $11.5 billion New Hampshire budget.

NH Today with Jack Heath

Watchdog and Bulldog

Grant Bosse joins Bulldog Brian Tilton on "Bulldog Live" on 107.7 WTPL to discuss the state budget and the Josiah Bartlett Center's "Watchdog Project". Watch for yourself:

Segment 1- The State Budget


Segment 2- The Watchdog Project

Going up: The budget's trajectory

The Union Leader notices a trend in state budgets; they go up no matter how the economy is performing:
Just two years ago, the budget for the state of New Hampshire exceeded $10 billion for the first time. Today, House Democrats propose a budget they say would make "painful" cuts to state programs and services while spending $11.5 billion.

How more than 11 percent budget growth in two years could equal painful cuts is one of the great mysteries of government.

The regional consumer price index rose just 3.5 percent from 2007 to 2008, and prices from January 2008 to January of this year are basically flat. How can state government grow more than three times faster than inflation while revenues grow more slowly?

WGIR Podcast

Listen to Grant Bosse as his talks about the state budget, and the Josiah Bartlett Center's new web video project, with Charlie Sherman on WGIR.

Or download the podcast here.

NH budget battle primed to begin

In the Nashua Telegraph, Kevin Landrigan sets the stage for this week's budget debate in the New Hampshire House:
House Finance Committee Chairwoman Marjorie Smith said everyone paying for, getting and delivering state services must sacrifice to help the state preserve essential services while facing the worst recession since the Great Depression.

"The committee made significant and painful cuts in the operating budgets of every agency," Smith wrote in her formal argument to the House.

House Republicans will offer 16 separate amendments to produce their alternative plan that would cut state spending by 2.6 percent and eliminate the need to raise existing taxes or create new ones.

This would be achieved primarily through across-the-board cuts nearly twice as big as the House has adopted in the past two decades.

"Taking millions of dollars out of the private sector inflicts further suffering on individuals who may have already lost their jobs, had their salaries and benefits reduced or face foreclosure from their homes," said state Rep. Neal Kurk, R-Weare.

"Individuals can't stimulate the economy with their spending because the state has more of their income, and they, in turn, have less to spend."

The House can set better budget priorities today

By CHARLES M. ARLINGHAUS

Whether the state budget passes or fails in the House today doesn't much matter. The Senate will be responsible for creating a budget that will look very little like what Gov. John Lynch proposed two months ago but will include some pieces of the compromises the House will be forced to make today.

The governor proposed a budget on Feb. 12 that ended up pleasing no one and leaving most of the hard work for the House Finance Committee. The budget sounded great in his speech, but unraveled as the details emerged.

He proposed spending millions more than we raised in taxes, using about $519 million in one-time revenues and borrowing to mask a deficit that got worse over the course of the budget. If his proposal had been passed, the state budget situation would have deteriorated dramatically over the next two years and left his successor with a bigger problem than Lynch faced this year.

Typical of the governor's budget approach was ducking a decision on school construction aid. Rather than making a decision to cut or pay for state grants to help school districts building new schools, the governor included the plan, but no money in his budget. Instead, he wanted to borrow the money, as was done as an emergency measure last year.

In a typical year, the House builds from the governor's proposal and passes a budget its members think would be good policy if the Senate did nothing but accept it. This year, the House's chief budget writer says it is a terrible budget, but the Senate will make it better.
Because even its authors don't expect it to become law, votes today and tomorrow will take on the role of policy suggestions. Lawmakers can use the votes on the floor to express preferences for increased or decreased spending, higher or lower taxes, and cutting or paying for school construction aid.

The state's capital budget managed to achieve a rare, unanimous vote of the Public Works Committee because of its attention to policy. It might serve as a model for budget writers. Just as with the regular budget, the governor's proposal avoided the hard decisions. It spent too much, and it included millions of dollars of borrowed money to pay operating costs -- the equivalent of using your credit card to pay your mortgage.

The committee started with a limit. The state treasurer used generally accepted guidelines for borrowing capacity to set a limit of $130 million. The committee used that number and crafted a budget that spent $127 million. The governor had spent $10 million more than the limit, and the majority of his spending was borrowing for operating costs.

Not every committee member agreed with each item selected, but the Public Works Committee voted unanimously because it operated within budget constraints.

For the state operating budget, lawmakers haven't decided how much money is available to be spent. I've written before about the folly of raising taxes in a recession, but the committee has proposed raising some taxes and instituting new ones, including the job-killing capital gains tax.
I've been critical before of adopting overly rosy revenue estimates. This year, the House has done a good job of adopting cautious revenue estimates for most existing taxes. They look sensible in light of current economic conditions. However, other tax policy changes have not been voted on.

Normally, the House Ways and Means Committee would consider new taxes and tax changes and bring them to the full House for a debate. In a particularly bad policy change, the Ways and Means Committee ducked its job and just asked the Finance Committee to stick them in the budget to be voted on as a whole, avoiding a vote, avoiding a debate.

Lawmakers should resist voting up or down on the whole budget without expressing policy choices. Washington-style budgeting is to throw everything but the kitchen sink into one giant bill and expect that you have no alternative but to pass it.

Because we know that what passes the House isn't anywhere near final, legislators can make individual choices that express their view of policy priorities. If you believe raising taxes in a recession is a mistake, you can vote against tax hikes. Legislators can support deeper across-the-board cuts to prioritize lower spending. Or they can restore some spending if needed.

Budgets are about policy choices. Lawmakers should use today's debate to express several clear opinions in a debate that will continue for months.

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

Tuesday, April 7, 2009

For fairness's sake, tax estates, capital gains

In all the budget coverage this morning, I missed the Concord Monitor editorial in favor taxing both capital gains and inheritences, just to be fair:
The "death tax" re-branding was a misnomer. The tax really falls on the inheritors of an estate and should be called the "lucky survivors tax," since if you die before the owner of the estate dies, you lose. In that sense, the inheritance tax is no different than a tax on gambling winnings.
There you have it. Trying to keep a farm or small business in the family is just like buying a lottery ticket. The Monitor concludes its argument with the first and last chorus of all taxers, the government needs the money:
This year more than ever, the state needs the money. Gov. John Lynch and the Legislature have been curbing services to people who really need them, postponing projects and planning to lay off hundreds of state employees. An estate tax and capital gains tax aren't the answer to New Hampshire's chronic revenue woes and unfair tax structure, but they are a step in the right direction.

Josiah Bartlett Center Launches Web Video Project

Online video news reports posted through NH Watchdog

(CONCORD) The Josiah Bartlett Center for Public Policy has entered the world of video podcasting, launching a web video project through its investigative branch, New Hampshire Watchdog. Veteran reporter Grant Bosse posted the first two video reports about the dueling state budget plans presented by House Democrats and Republicans. Both plans will be considered by the full House later this week.

Part I: House Finance Committee Budget Presentation

Part II: House Republican Caucus Alternative Budget

“The Josiah Bartlett Center is well known for its reliable analysis of New Hampshire issues,” said Center President Charlie Arlinghaus. “Now we can use new tools like YouTube, Facebook, and our NHWatchdog blog to spread that work across New Hampshire.”

Bosse brings both journalistic and State House experience to his new assignment, having worked for the New Hampshire House and U.S. Senate, as well as being an award-winning reporter at radio stations WGIR and WTSL.

“TV, radio, and newspapers have time and space constraints that make it almost impossible to provide in-depth coverage of complex issues like the state budget,” Bosse added. “But with just a digital video camera and a laptop, the Josiah Bartlett Center can provide in-depth coverage to both policy makers and the public.”

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House Budget Briefing Online

The New Hampshire has posted the entire Finance Committee budget presentation online.

You can watch the two-hour forum here:

http://www.gencourt.state.nh.us/housevideo/sessions/2009/HB1Briefing.asx

And you can watch our report on the forum here:


And the Republican Alternative Budget here:

New Hampshire isn't feeling stimulated

A new study shows New Hampshire near the bottom in per person aid from the federal stimulus bill. Kevin Landrigan writes in the Nashua Telegraph that the Granite State lags far behind its neighbors in receiving federal money:
New Hampshire finishes in the bottom 10 in the country and lowest in the Northeast for federal money per person coming from the $87 billion stimulus package, according to a report.

All other New England states rank in the top 20 while New Hampshire is 40th, according to Brian Gottlob with PolEcon Research of Dover.

From the six largest grant programs under the stimulus, New Hampshire will receive $818 million or about $620 per person, the study concluded.

In the Union Leader, John DiStaso and Tom Fahey also examine the conclusions of the new report:
"Two industries, health care and public education, least affected by the current recession will receive the largest source of stimulus funding in New Hampshire," concludes the report by economist Brian Gottlob of PolEcon Research of Dover.

The study was paid for by an independent watchdog group called STEWARD, an acronym for Stimulate the Economy Without Accumulating Record Debt. The organization was formed in February by Nashua businessman Fred Tausch, a former Barack Obama supporter who quickly became frustrated with the President's spending programs.

Budget Coverage

The State House press corps covers yesterday's dueling budget presentations.

In the Concord Monitor, Lauren Dorgan reports that the House Democratic budget has something for everyone...to hate:
Liberal critics said that budget writers cut too much from the needy and from state employees and should have turned to income taxes or taxes on the rich to fund state operations fairly. Conservatives contended that the taxes contained in the budget were excessive and that one of the taxes - a 5 percent levy on capital gains - is an income tax. Others balked at cuts to local aid, which they said would drive up property tax bills.

For their part, House Republicans unveiled a budget plan of their own that they heralded as "truly balanced," which they said would increase no taxes and maintain $123 million worth of aid to cities and towns not included in the Democratic budget, $83 million of which is school building aid. There was just one catch: Republicans called for more than $300 million worth of cuts to the budget without specifying what should go, instead calling on the leaders of most state agencies to figure out how to institute 13.5 percent across-the-board spending reductions.

In the Nashua Telegraph, Kevin Landrigan writes that the Finance Committee's plan was attacked from the right and the left:
"We are living in a recession, and in a time of recession, it is bad public policy to raise taxes," said Rep. Neal Kurk, R-Weare.

The House budget would impose a new 5 percent tax on capital gains of more than $5,000 a year, an 8 percent tax on estates worth more than $2 million and a 10 percent tax on gambling winnings greater than $600 at one time.

The House budget also would raise existing taxes on gasoline, cigarettes, hotel room rentals and restaurant meals and suspend for two years a planned cut in the insurance tax.

In state spending, the proposal of House budget writers would raise spending 3 percent over the next two years. The House GOP alternative would cut state spending 2 percent.

In the Union Leader, Tom Fahey says Democrats attempt to share the pain, while the GOP has picked a budget battle:
Democrats admit there's a lot to dislike in the $11.5 billion budget they want the House to pass this week, but they say it's better than the Republican alternative.

The GOP, however, says Democrats have balanced their two-year budget plan with a critical misstep of raising taxes during a recession, and by holding money back from communities.

The two sides exchanged criticisms yesterday, as Democrats outlined their version to more than 100 lawmakers at a budget information session. Republicans declined the chance to make their case at the session, and held a news conference afterward.

Monday, April 6, 2009

Dueling Budgets at the State House

The House Finance Committee and the House Republican Caucus presented competing budgets at the State House today. NH Watchdog reports.

Part I, House Finance Committee


Part II, House Republican Caucus

Liquor Stores may get makeover

The Nashua Telegraph and Union Leader run Travis Anderson's piece for the Associated Press examining the history of liquor sales in New Hampshire, and Commissioner Mark Bodi's push to revamp the system by consolidating power over alcohol sales in his hands:
In New Hampshire, a run for Johnny Walker Red in 1934 felt like a trip to Red China as customers passed written orders to clerks in drab warehouses. Tim Sink, president of the Greater Concord Chamber of Commerce, says that system lasted into the '60s and '70s.

"The stores were tucked away in these seedy areas of downtowns," he said. "It was almost like we were ashamed that they were there."

Large stores now sit just off Interstate 93 in Hooksett and at key entry points from neighboring states. Out-of-state buyers account for half of sales, and Lynch wants to lease restaurant space near the border stores – at welcome centers – to give travelers another reason to stop.

"If we are honest, these welcome centers are not very welcoming," he told lawmakers.

Bodi wants to spruce up 25 stores over the next five years but says it will take longer if he can't streamline contracting. In one extreme illustration of that problem, he said delays getting a contract approved meant it took months to fix a broken store window recently.

Weekend Roundup

Lots of budget talk in this weekend's political columns.

First, Kevin Landrigan writes in the Nashua Telegraph that Fred Tausch and his group, Stimulating The Economy Without Assumulating Record Debt (STEWARD) is examining how the federal stimulus bill with impact New Hampshire:
On Monday, the group will release results of an economic analysis study done by Brian Gottlob, who has his own Seacoast consulting business and produces an ongoing report on economic trends.

In the report, Gottlob identified more than $920 million in stimulus money already headed to New Hampshire. That total is incomplete, he wrote, because it doesn't include what competitive grants New Hampshire projects may win in the coming months. Here's how Gottlob gets to this massive number:

• Education: $258 million.

• Medicaid: $250 million.

• Transportation: $129 million.

• Individual income support: $79 million.

• Environment: $63 million.

• Energy-weatherization: $61.7 million.

• State fiscal stabilization aid: $36 million.

• Housing: $33.5 million.

• Health care: $9.3 million.

Gottlob noted the two largest pools of money would be used to help pay for the next two-year state budget.

Landrigan also reports that budget writers are working to restore the $83 million in building aid that the House Finance Committee killed:
The House Finance Committee decided that since Lynch wouldn't put it in his state budget, the House panel wouldn't either, and the Senate can decide where it fits in its priorities.

Lynch press secretary Colin Manning said the governor is committed to making sure it finds a home.

"It's got to be somewhere,'' Manning said.

House Finance Committee Chairman Marjorie Smith, D-Durham, noted state law makes clear that school building aid is "subject to appropriation,'' which is legal speak for anywhere up to 100 percent, depending on how much the Legislature has on hand.

Landrigan also goes department by department to identify the winners and losers in the House Finance Budget.

In the Union Leader, Tom Fahey pens his weekly Under the State House Dome column and looks ahead to this week's budget debate in the House:
On a party-line vote last week, the House Finance Committee passed a budget much like Gov. John Lynch's plan. Both versions maintain a roughly $50 million reserve, or Rainy Day Fund, after they tap it for about $40 million in June. They both have a tobacco-tax increase, a gambling tax and a hike in the Rooms and Meals tax.

But there are some key changes. For one thing, new taxes on estates and capital gains were nowhere in Lynch's plan. The House added $16 million to cut down the wait list for services to the developmentally disabled; $2 million for cancer prevention, $1 million for HIV-/AIDS programs and money for catastrophic illness victims and suicide prevention.

Lynch's plan to give the state Liquor Commission more business clout fell by the wayside. Liquor has more work to do before it can start closing marginal stores and setting up liquor sales in private stores, the committee said.

In the Concord Monitor, Lauren Dorgan's column points out that even those who wrote this budget don't like it very much. Dorgan says the budget news is much grimmer than when Lynch gave a somber budget address in February:
Now we know that we didn't know from grim. House budget-writers backed two taxes on the wealthy, an estate tax and a capital-gains tax, on top of keeping most of Lynch's cuts in place (while adding back a few social programs, like cancer prevention).

The worst part: Even then, the budget still didn't balance, leading budget-writers to call for an additional 1.25 percent across-the-board cut, leaving agencies to decide where to find the money. (The Republican alternative budget did more than that, including a 13 percent across-the-board cut at many state agencies.)