NH Sen. Jeb Bradley - Continued Frugality Necessary to Protect Taxpayers and Grow Jobs

By Jeb Bradley 11/28/2011

In passing the 2011 budget, the Legislature made tough decisions and difficult cuts to stabilize NH finances while also laying the groundwork for economic recovery.

Judging the 2011 budget must be made in the context of the previous two budgets which increased spending 23% from $9.36 billion to $11.5 billion. In those prior budgets, when tax revenue underperformed, Legislators resorted to unprecedented borrowing for operating expenses and Stimulus funds to close growing deficits. That gap from prior budgets was at least $800 million when current legislators began formulating the 2011 budget. Difficult choices could not be avoided!

Those of us tasked with producing a balanced budget also recognized that New Hampshire taxpayers, working families, and small business owners were still reeling from nearly 100 new or increased taxes and fees passed in the previous four years. Those new levies included the job killing LLC business owner income tax and the camping tax that proved to be so odious they were repealed. Given the negative impact that higher taxes would have on job growth and hardworking Granite Staters, higher taxes were an obvious non-starter.

Two of the more difficult decisions involved funding for hospitals and the University System. Due to the fact they are both large expenditure items, cuts in these line items could not be avoided if the budget was to be balanced. Very few legislators wanted to make these cuts, but unfortunately they were necessary.

Due to their not-for-profit status hospitals pay no business taxes and very little property taxes. Over the years these hospitals have absorbed numerous private physician practices that had previously paid taxes, but now don’t, because they are under the hospital umbrella.  Meanwhile, some of these not-for-profit hospitals act like large businesses by engaging in expensive advertising wars fighting for market share. Nevertheless, a provision in the budget allows some future funding for hospitals should revenue become available.

While virtually all state departments received less funding, the Senate retained funding for the mental-health system and for families that have disabled children.

Other budget cuts that generated much discussion were in the Department of Transportation and were made necessary by the expiration of the $30 (and in many instances higher) surcharge on motor vehicle registrations. The surcharge was enacted in the 2009 budget and promised to be a temporary measure.  New Hampshire residents complained about this surcharge as much as any of the nearly 100 taxes or fee increased in the previous four years -- rightly viewing it as a “fee” to get to work. 

Allowing it to expire as promised does have consequences in the Transportation budget however. Initially the Department proposed snow plowing cuts on secondary roads.  Several legislators led by Sen. Chuck Morse and Rep. Gene Chandler objected and the newly appointed Transportation Commissioner announced an alternative plan that will ensure the same level of plowing as in past winters.  Instead, reductions will be made in maintenance, mowing, road sweeping, tree trimming, and pavement markings in 2012 and the Department will work with the Legislature to meet budget constraints.

In my view, we must prioritize necessary maintenance over most new construction with the exception of projects such as Route 93 expansion, the Little Bay Bridge or Conway bypass that have  state-wide traffic significance.  There also must be recognition that maintaining our roads and highways costs money.

Because of realistic and conservative projections, revenue is somewhat ahead of expectations -- welcome news indeed.  Business taxes, the most important revenue source, are 12% above predicted. The rooms and meals tax, the communications tax, and the real estate transfer tax are all slightly ahead. It is a hopeful sign of possible light at the end of the recession tunnel, when business, real estate, and tourism revenue are improving.

A key priority, especially for the Senate, has been enacting legislation that improves the business climate for job creation. We passed bipartisan legislation (SB 125) that dramatically curtails the ability of the Department of Revenue to foist a de-facto income tax on the salary a business owner pays him or herself.  We passed legislation (SB-86) that restricts the Department of Labor from imposing large fines on business owners for rather minor paperwork violations without first warning the business.  We expanded net operating loss provisions to encourage start-up businesses and job creation by wrapping SB-126 into the next budget.   Also included in the budget, SB-154 made changes to development rules near rivers and lakes that will encourage a depressed home building industry by easing requirements while still protecting the environment.

Furthermore, the Senate sought to relieve future pressure for tax increases through a number of government reform efforts.  A new education funding formula sponsored by Senators Jim Rausch and Nancy Stiles ended donor downs and prevented unsustainable future cost increases while ensuring the cities and towns received the same level of funding in these difficult times.  SB-147 reforms Medicaid, the largest cost center in our budget, saving significant present and future costs while maintaining quality services for those in need.  And finally pension reform will save property taxpayers from skyrocketing costs.

This Senate legislation – much of which I was the primary sponsor of -- will pave the way for more cost effective, efficient government and a demonstrably improved business climate. New Hampshire’s unemployment rate -- while still too high -- has dropped from 5.7% in November 2010 to 5.3% today. However, the fact that nearly 40,000 of our friends and neighbors remain out of work gives added urgency to these measures.

There are also budget storm clouds on the horizon. The federal government seeks to recoup $35 million of excess Medicaid payments made to New Hampshire several years ago. This calls for continued careful budgeting and living within our means.  Governor Lynch was able to save $26 million from the previous budget through carefully managing each department’s expenditures. 

A budget provision supported by Governor Lynch as well as Senate and House budget writers would curtail welfare eligibility saving $8million per year. Though almost most legislators agree with this change, a drafting mistake was made and the language was not reflected in the final budget. 

Realizing this, the Senate met in early September to pass fix-it legislation before more money was spent. Unfortunately, the House waited for a month to address the issue which cost nearly a million dollars.  The House then added a non-germane amendment that will foolishly cost another two million dollars.

The State needs to continue to practice frugality to protect hard pressed New Hampshire taxpayers and to help our economy weather the national recession.

Republicans must end the ‘government as usual’ model

By Andrew Hemingway, chairman, Republican Liberty Caucus of New Hampshire

While New Hampshire’s unemployment numbers of 5.2 percent continue to impress by undercutting the national average of 9 percent, it’s important to take a step back from these numbers and consider what the often-quoted comparison doesn’t say.

The state’s unemployment statistics, however low, do not account for people who work part-time and would prefer a more comfortable full-time job. They don’t account for those who have given up looking for a job, because good jobs are too hard to find. They don’t account for the fact that our schools continue to fail us by graduating people unprepared for higher-end jobs, despite the fact that we give these government institutions a greater portion of our shrinking income year after year. They also don’t account for the falling dollar and the resulting increase in prices.

New Hampshire lawmakers certainly cannot address every economic problem, because some are larger than the state, but they can address many of them by developing the political will to rein-in the power brokers in Concord. Unfortunately, many of the Republicans sent to Concord to remove the rules and regulations that stymie jobs and the economy are falling into a government-as-usual mindset.

Rather than listen to the voice of reason and the loud call of the voters who sent Republicans to create a smaller, affordable government that leaves them alone, some lawmakers seem to be listening to the bureaucrats, lobbyists and special interest groups who only have their own interest at heart. “Regulate us” is a cry often heard by those who seek to get rid of the competition. Do Republicans really want to join their Democratic counterparts in support of such job-killing cronyism? It baffles me how politicians are so quick to listen to the people who are on the take and so quick to ignore the people who are having the fruit of their labor taken from them against their will.

Take the bill that repeals the Regional Greenhouse Gas Initiative, for instance. This multi-state program may provide money to some companies for renewable energy projects, but that money is coming from energy producers, manufacturing firms and ratepayers, who are now facing a higher cost of doing business and a higher cost of living as a result. And wouldn’t companies that think renewable energy projects are a good idea pay for such projects on their own? Why should a multi-state bureaucracy pick the winners and losers? That drives up the cost for everyone.

The labor union special interest group has managed to use the law over time to solidify a power position over voters and companies (both employers in this state). A few common-sense efforts to rein-in the unions’ unique power position have had far too much trouble from some. These detractors should note that companies relocate to Right to Work states because they know they can hire workers there who will not force them into contracts they can’t afford. If politicians really cared about those jobs they promised, they would turn down the union money that was taken from workers against their will and support the right to work without interference from a third party. We need those jobs!

Whether Republicans ultimately garner the political will to change the way Concord works for the better really comes down to how they view government. If Republicans do what they said they would and create a limited government that respects free markets, their super majority might mean something come reelection time. If Republicans continue to see government as a mediator in the economy, we will all be losers in November 2012.

It's that time again!!

I see the beginnings of the quarterly ritual messages from candidates stating "I need your help." With millions available to them to run their campaign, they now ask the citizens of New Hampshire to dig into their pockets a little deeper to spend, spend, spend on ads.

How does one reconcile boasting of being a conservative yet spend millions of dollars on a political campaign? Four of the five US Senate candidates are continuously asking for contributions to their campaigns to get their message out, for name recognition and to "be viable." Each has at least one million dollars and others have upwards of multiple millions of dollars in the bank. I thought that a "conservative" was to be frugal and spend the least amount possible to get things done!

How can they say they will go to Washington to cut spending when they are out of control in their campaign spending?

When does the spending madness end?

It ends here!

I don't have the resources to be on tv or mail ads that will be thrown away. I am out every day in some town across the state campaigning the "old fashioned way"...meeting people, shaking their hands and looking them in the eye. This costs nothing more than gas in my tank.

I have lived my whole life here in New Hampshire and have solid NH values.... I find it difficult to ask for money from anyone when I know that times are tough and money is tight for most people. I never ask for a monetary contribution, I tell people that if they want to contribute to my campaign then just "spread the word for me" and that is a contribution. I will spend what little I have in reserve to get out and meet people and ask that we work together to make an effective change in Washington.

This election is one where we need someone who walks the walk, not just talks the talk. I will be careful with my money now in the campaign and also when I get to Washington as your next Senator. I want to be your next Senator and am willing to "earn it" not buy it!

When I ask for your contribution..... just "spread the word" and that will be enough for me!!

Dennis Lamare

Candidate US Senate

www.lamareforussenate.com



My Questions for the 2010 Candidates

Dear NH Insider,  

As a NH voter, I compiled this list of questions to send to the 2010 NH House and Senate candidates.     I would like to share it with all NH voters, and I challenge ALL NH candidates to answer my questions in detail - posting their responses on NHInsider.com for voters to read.   

Let's show candidates that they will need more than sound bites to get out the vote in their favor this November!  

Sincerely, Kylie of Nashua    

NH 2010 Candidates Questionaire

 

1. Many candidates running in the New Hampshire 2010 elections state they are "for spending cuts".  If you are such a candidate, how, specifically, would you propose to cut spending at the federal level?  Please state the names of budgets that would be cut, and give a brief justification for each choice.

 2. How does your policy of cutting spending square with your desire to improve education in the public schools? 

 3. Are you aware that the United States imports 80% of its seafood from Southeast Asia, yet the FDA only inspects 2% of this seafood before it enters the United States?  This has led to port-shopping by importers to get around what inspection stations do exist, and - by extension - serious safety issues with our seafood. The FDA states it does not have enough money to properly staff its inspection stations.  If elected how would you address this issue?

 4. Recent studies show that there may be a link between health problems and food-related additives and chemicals.  Still, many officials and lobbyists push for no regulation of these additives and chemicals until further proof of their harmful nature is available.  How much proof of harm would you require before you would be willing to regulate food additives, chemicals or genetic manipulation? 

 5. When George W. Bush was President he began the practice of using ethics waivers in order to declare persons with conflicts of interest fit to serve in government policy-influencing capacities.  President Obama has continued this policy, and used it to his advantage as well.  If elected, would you oppose the use of ethics waivers and fight to cleanse both our high government positions (such as Secretary of the Treasury) and our regulatory agencies of conflicts of interest?

 6. What is your stance on US involvement in foreign wars, like those in Iraq and Afghanistan?  Would you support US involvement in an additional war with Iran?  Why or why not?

 7. Politicians of every political affiliation state their opposition to the banker bailout.  Yet, many politicians have received money in election cycles past and present, from huge corporations - including large Wall Street firms like Goldman Sachs, Credit Suisse and JP Morgan.  If you (Bill Binnie, Paul Hodes, Kelly Ayotte, Jim Bender, Katrina Swett, Richard Ashooh, and Robert Bestani) received large sums of money in this election cycle from corporations that benefitted strongly from receipt of the bailout funds, how will you resist their lobbyists calls for continued bailouts, or deregulation of the financial industry once elected?  Do you support an audit of the Federal Reserve?  If not, why not?

8. Relatedly, what is your stance on the Gramm-Leach-Bliley Act of 1999 (which was a repeal of the Glass-Steagall Act of 1933)?  If elected, would you vote to reinstate Glass-Steagall, in order to allow the United States to reduce its massive deficit? (Glass-Steagall would separate speculative from commercial banking, making it possible to write off the bad speculative debt create by the TBTF banks, and passed on to American taxpayers by the TARP bailout.) 

9. What is your opinion on the methods currently being used to deal with the environmental disaster in the Gulf of Mexico? 

10. What, if anything, would you have added or removed from the recently-passed Financial and Health Care reform bills?

11.  Name two pieces of legislation that have come before the 111th Congress which you would have co-sponsored, and tell us why.

12.  Finally, New Hampshire has a large number of voters who are strong supporters of the 10th Amendment.  What statement would you like to make to these voters?

Budget Blues

By NH Senator Jeb Bradley

Governor Lynch has finally weighed in on the budget crisis with his proposal for balancing a $220 million deficit. Let's re-visit how we got here, and place it in the context of the overall economy. 

While there have been glimmers of economic hope, New Hampshire citizens continue to struggle. The national unemployment rate crested at 10.1% in October. Since then the national rate has inched downward to 9.7% while unemployment in NH has continued to climb. Our October rate was 6.8% and 50,483 people were unemployed. February, the last month for available numbers in NH, the unemployment rate had climbed to 7.1% and 52,875 people are unemployed. Ominously, a recent study indicated that NH lost more jobs per capita to China, especially in technology than any other state.

In the past, NH led national economic recoveries, so why now are job losses in New Hampshire growing? Can it be the 38 new or increased taxes and fees implemented by the Legislature in June 2009? It's likely that tax levies on business owners have undermined the incentive for small businesses to locate or expand in New Hampshire. Aggressive and constant Department of Revenue audits on small business owners have resulted in imposition of the business profits tax on a significant portion of a business owner’s salary. This 8.5% tax combined with the 5% LLC Tax on the same stream of business owner salary has created a deadly job-killing 13.5% tax on business owners and the jobs they create.

The non-partisan Tax Foundation recently ranked NH’s corporate tax system the worst in the nation. While hard to believe, the business climate in Massachusetts is better than New Hampshire’s – a dangerous condition which illustrates why our unemployment rate has continued to climb while the national rate has declined.

 The good news in Governor Lynch’s budget proposal is the assumed repeal of the LLC tax. Finally -- reluctantly, Democrats in Concord who voted for the LLC Tax, despite not being vetted in a public hearing, and defending it as merely closing a loophole, have seen the light. It’s a small miracle that Democrats finally realized that increasing so many job killing taxes in the face of rising unemployment is not a prescription for helping working families and creating jobs. Perhaps they realized that the November elections are right around the corner and voters are angry!

The LLC tax is not the only tax harming our economy. The so-called camping tax --- also enacted without a public hearing --- may take the foolishness cake. Supporters claimed this tax would raise $7 million over the two year budget. But so far it has raised only $500,000 in the first year which includes most of the camping season. 

On a bill I sponsored to repeal this tax, campground owners testified at a public hearing that they are losing business as campers avoid New Hampshire. Unfortunately, the Democratic leadership laid the repeal bill on the table in the Senate – never to be seen again. Thankfully, Representative Herb Richardson’s bill which also repeals the campground tax, survived the water torture of the House Democratic leadership’s effort to kill it. Rep. Richardson's effort succeeded and the legislation is on its way to the Governor’s desk. Governor Lynch probably realized that the paltry $500,000 raised is more than offset by campers avoiding NH and thus not contributing to state revenue raised from sale of gasoline, meals, tobacco, wine, beer, and liquor. So his budget proposal eliminates the camping tax thus enhancing the tourist economy – one of our biggest sources of jobs and state revenues.      

Governor Lynch also proposed a number of across the board cuts – precisely what Republicans had recommended when the budget’s 10.5% spending increase was adopted. Had those cuts not been summarily rejected 10 months ago, today’s problems would not be as dire. Nevertheless the Governor has begun the process of reeling in the excessive spending with cuts to the courts, attorney general’s office, health and human services, education, corrections, environmental services, and information technology. An additional 30 to 35 people will lose jobs on top of nearly 300 jobs that have already been cut. 

Some troubling aspects of the Governor's proposal are the $25 million of operating expenses at UNH that will be bonded – on top of the recent bonding of school building aid. Continued bonding in this manner isn’t sustainable. The cigarette tax will increase for the 5^th time in 6 years. Much of the competitive advantage NH enjoys over neighboring states will evaporate, so revenue growth may not match expectations. Lastly, the budget proposal’s assault on property taxpayers continues as retirement costs, revenue sharing and some education programs will be downshifted to cities and towns.

Here is an idea the Governor should consider rather than socking property taxpayers with more costs. The Regional Greenhouse Gas Initiative (RGGI) fund may have approximately $15 million in it by the end of the budget. Currently these funds are disbursed to different entities such as UNH, Dartmouth, and Stonyfield Farms to reduce carbon emissions. Consider this however: UNH has been paying golden parachute bonuses for years to top administrators, Dartmouth College has an endowment, while Stonyfield is one of NH’s most successful corporations. Surely property tax relief, at a time when 52,875 people are unemployed and countless more NH citizens are struggling, is a higher priority for scarce resources.

Governor Lynch’s proposal may resolve this current budget crisis through a patchwork of spending cuts, one time fixes and accounting maneuvers, but the state will continue to lurch from crisis to crisis because we are avoiding long overdue restructuring of state spending for Medicaid, education funding, retirement and healthcare costs. These big ticket items unless reformed –quickly – will produce a more profound future crisis -- a likely income or sales tax and erosion of well-paid jobs. We have an opportunity – indeed an obligation to confront and resolve these growing fiscal problems before it is too late. If not, perhaps this blog should be re-titled from Budget Blues to Budget in the Red.