Press Releases

 

Wednesday
Jun242009

NH Sen Bradley - Is This A Balanced Budget or A House of Cards? 

After two marathon weeks of discussions between House and Senate members charged with negotiating a budget, early Friday morning a package emerged. Its fate is uncertain as the full House and Senate must pass it before it reaches Governor Lynch for signature. Counting votes before the June 24th Session will be almost as daunting as reaching this compromise -- anything can and may well happen.

 

Let's first focus on what is in this package and what is not, then on the impact it will have on people and businesses, and lastly how this budget will affect New Hampshire’s future.

 

Like any compromise, this budget is a mixed bag of good news and bad news. Several very controversial new taxes and tax hikes that had previously been approved by either the House or Senate, were dropped. These include the capital gains tax, death tax, gas tax, insurance premium tax, and a specific increase in business taxes by loss of a tax credit. All of these taxes would have directly undermined New Hampshire’s ability to attract businesses, investors, or visitors to our state. Also dropped from the final package were expanded gambling and a controversial plan to use toll revenue for highway improvements all over the state. Several taxes rumored for late consideration never made the final package including an entertainment tax and a tax on mortgage re-financing.

 

There are new taxes galore however. The tobacco tax will go up by 45 cents -- the fourth hike in five years. Non-smokers may generally be callous to the impact this tax has, but smokers, especially low income people, justifiably believe they are carrying far more than their fair share of the tax burden. This increase will also undermine the cross border advantage New Hampshire has long enjoyed – attracting visitors to purchase tobacco products here and fill our revenue coffers. Convenience stores near the borders will be impacted, and meeting our re venue goals with this tax hike is questionable.

 

Any gambling winnings will be taxed at 10% including those garnered outside of New Hampshire. Will we be sending auditors to Foxwoods and Las Vegas -- or charitable events in New Hampshire -- to guarantee tax collection? Under those circumstances, is the $14 million of anticipated revenue farfetched?

 

The Rooms and Meals tax got increased 12.5%. I have written before that this huge increase will make our states less competitive for tours, vacations, conventions, and weddings. But budget writers slapped this tax for the first time on campgrounds – without a public hearing. Campground owners are outraged at this abuse of process. One owner felt so betrayed by the Legislature not having a public hearing, he told me the only people qualified to serve in the Statehouse are the janitors. Campers arriving this summer may be just as angry when they discover this new "marshmallow tax". Again, revenue projections may suffer if campers take their marshmallows elsewhere.

 

Business owners were certainly dinged too. Business owners already are subject to an 8.5% tax on profits as well as a .75% tax on all payroll expenses. Now however, business owners organized as limited liability companies or as partnerships will be subject to an additional 5% tax on any income distributed to an owner. This significant change in the 1923 Interest and Dividends tax was also snuck in at the last minute – again with no public hearing. The estimate is that this change will raise $30 million of new taxes from business over the next two years. This dramatic increase in taxes on small business may prove to the biggest $30 million mistake that New Hampshire could make -- as it threatens to undermine New Hampshire’s ability to build new jobs at exactly the wrong time.

 

The ‘rest of the story’ behind this last minute business tax increase is that it is just the latest step by the New Hampshire Department of Revenue Administration to strangle small business in New Hampshire. Desperate to raise revenue, DRA has recently taken it upon itself to essentially determine how much compensation a business owner may pay him or herself. Should the business owner pay him or herself additional compensation beyond what DRA has pre-determined is allowed, the DRA with bureaucratic hubris will simply assesses the 8.5% Business Profits Tax on this so called excess compensation.

 

If people are concerned about the Administration in Washington determining pay levels for executives – well it has been happening here in New Hampshire – right under our noses – with questionable legal authority for DRA to determine what is profit and what is income for a business owner.

 

This attack against successful small business owners, hidden from the light of day behind the audit curtain, is by itself a terrible threat to New Hampshire’s ability to build new jobs here. But now under this budget it gets worse. The business owner will pay a new 5% tax on income on top of the 8.5% tax on the balance of income that DRA has determined is excessive. The Legislature may say it wants to attract business to New Hampshire, but in fact, the Legislature is sending business a strong signal: move to Massachusetts. When tax policy in Massachusetts is more attractive than ours—that is dangerous! The pink slips will follow for NH workers.

 

It is not just taxes – fees are going up dramatically. Drivers will pay at least $30 to $75 more for registering a car. Boat registration fees double. Condominium registrations will nearly double. There is even a new salt water fishing license fee and a permit to carry a concealed weapon for out of staters skyrockets from $20 to $100 which means people will no longer register firearms in NH and we will likely lose money.

 

What about property taxes? This budget spreads the pain to them as well as property taxes will climb across New Hampshire by nearly $90 million as this budget downshifts traditional state responsibilities onto the backs of already struggling property owners.

 

With all these new taxes, higher fees, and soaring property taxes – what happened to spending levels? I have maintained throughout this budget process that spending needs to be reduced to avoid raising taxes on families, small business, and property owners struggling to stay afloat. While this budget did make some last minute cuts to programs and personnel – it was still not enough in my view. Overall spending will still increase 10.5%.

 

Governor Lynch warned that projected revenue is going to fall to 2004 levels and will be 10% lower than 2008 levels. Business tax revenues alone are currently some 27% below the projections for expected revenue.

 

But budget writers were still short and desperate for revenue. So despite the Governor’s warning, budget writers magically inflated revenue expectations by $75 million in order to sustain spending. Lastly, $90 million of traditional state expenditures to reimburse school districts for construction projects was moved from the operating budget to the capital budget – meaning this $90 million will be borrowed! Experts have warned that borrowing of this magnitude is unsustainable.

 

So what does all this mean? Economically strapped New Hampshire residents will have to dig deeper into wallets filled with fumes rather than cash. The business climate will suffer significantly at a time that nearly 50,000 New Hampshire people are out of work and that New Hampshire’s unemployment picture has also darkened relative to other states.

But what has gone under the radar is this budget’s impact on future budgets. Not enough people realize that about $500 million of spending in this budget depends directly upon one time sources of revenue: federal stimulus funding, increased federal Medicaid funding, and a $110 million raid of New Hampshire doctor’s medical liability funds. (Litigation filed against this raid as well as the $75 million magical revenue projections are likely to leave this budget with a gaping deficit.) Can New Hampshire realistically expect future federal largess as Congress stares straight into the white eyes of indefinite trillion dollar federal deficits.

 

This $500 million one-time spending crater is a ticking time bomb for the next budget. Will the re-financing tax, the entertainment tax, the gas tax, the capital gains tax, the death tax rise from the dead? Will existing taxes on business, hospitality, tobacco, interest and dividends, real estate sales, and communications continue on their relentless climb? Will the state dump more costs onto property taxpayers? Or will it be a sales tax or an income tax---how about both?

 

That is the bleak future for New Hampshire families, businesses, and property owners unless state spending, which will have grown by nearly 24% in three budget cycles, is not brought under control.

 

Wednesday
Jun242009

NH Legislature to Cast Final Vote on Medical Marijuana Bill Wednesday 

Patients, Supporters to Speak Before Vote Urging Governor to Pass Bill Now That Lawmakers Amended It to Address His Concerns

 

CONCORD, NEW HAMPSHIRE — Patients and supporters will speak in front of the Statehouse Wednesday to urge Gov. John Lynch to allow the Legislature's recently amended medical marijuana bill to become law.

 

Lawmakers are expected to pass the final version of the bill later Wednesday now that a special legislative committee amended the bill to address eight specific concerns expressed by the governor about the original bill, which passed both chambers last month.

 

WHAT: Rally for medical marijuana bill, followed by legislative vote to pass it

 

WHO: Those scheduled to speak at the rally include:

Rep. Evalyn Merrick (D-Lancaster), a cancer patient and prime sponsor of New Hampshire's medical marijuana bill

Dennis Acton, a cancer survivor from Fremont

John Tommasi, a retired Salem police officer, now a Bentley College professor

Burt Cohen, a former state senator and a hepatitis-C patient

Richard Vincent, leader of Concord MS Support Group

 

WHEN: Wednesday, June 24 – speakers will begin at 8:45 a.m. The vote is expected later that day.

 

WHERE: The rally takes place in front of the Statehouse.

 

 

 

Wednesday
Jun242009

NHGOP STATEMENT ON THE DEMOCRATS DISASTROUS BUDGET 

CONCORD – Today, former New Hampshire Governor and Republican State Committee Chairman John H. Sununu released the following statement on the Democrats’ disastrous budget:

 

“The Democrats keep trying to shift the blame for their state budget disaster to the GOP. They were able to conceal the Democratic fiscal failure in the past, but this time they can’t hide. The Democratic spend and tax policies are ruining the State of New Hampshire.

 

“This New Hampshire budget problem is a reflection of budget irresponsibility in the past. The 17% increase in Governor Lynch’s last budget created this crisis, and the Democrats avoided any serious work on the budget until the Committee of Conference last week. Now the governor and legislature have agreed to small budget cuts which really do not make any significant impact on their over-spending. To cover this irresponsibility, they have increased taxes, raised fees, and devastated the communities of the state by short-changing them on money the state owes to the cities and towns. And now they are talking about selling State Parks.

 

“In order to save the fiscal integrity of the state, Republicans urged going back and reducing the nearly 10% increase across the budget to a 2% or 3% increase across the board, saving 7%. But the Democrats were locked into tax increases that will destroy jobs and our economy.

 

“Make no mistake about it. This is Governor Lynch’s and the Democrat Legislature’s fiscal failure. They came into power and have created a fiscal nightmare. The only solution is to go back and unwind their irresponsible budget increases.”

 

Wednesday
Jun242009

NRCC - Carol Shea-Porter to Face Voter Backlash from Failed "Stimulus"

With Unemployment Expected to Climb for the Next Year, New Hampshire Voters are Asking Shea-Porter: Where Are the Jobs?

 

Washington- The Washington Post is reporting today that Democrats who supported the President’s so-called “stimulus” package – such as Rep. Carol Shea-Porter (D-NH) – can expect to face voter backlash as unemployment rates continue to climb. The trillion dollar spending bill was shoved through Congress under the false pretense that unemployment could only be contained to eight percent by passing this bill and now Carol Shea-Porter will have to answer to the American taxpayers who have had to foot the bill with nothing to show except even higher unemployment.

 

“Carol Shea-Porter has yet to answer the American taxpayers’ questions about how much money she’s willing to spend – and more importantly, where are the jobs she promised,” said NRCC Communications Director Ken Spain. “After spending trillions of dollars and staring at double-digit unemployment rates, Carol Shea-Porter may be joining other middle-class Americans in the unemployment line after failing to stimulate the economy like she promised.”

 

The White House Claimed So-Called “Economic Stimulus” Would Hold Unemployment to Eight Percent This Year
"In January, the incoming administration predicted in a white paper study that without a huge stimulus package, unemployment would reach just over 8%, and would be contained at under 8% with a stimulus package." (Jake Tapper, "President Obama Predicts Unemployment Will Hit 10% This Year," ABC News' Political Punch Blog, 6/16/09)

 

Washington Post Reports that Democrats – Such as Carol Shea-Porter – Can Expect to Face Voter Backlash from Worsening Economic Outlook – Unemployment Heading into Double Digits

Despite signs that the recession gripping the nation's economy may be easing, the unemployment rate is projected to continue rising for another year before topping out in double digits, a prospect that threatens to slow growth, increase poverty and further complicate the Obama administration's message of optimism about the economic outlook.

The likelihood of severe unemployment extending into the 2010 midterm elections and beyond poses a significant political hurdle to President Obama and congressional Democrats, who are already under fire for what critics label profligate spending. Continuing high unemployment rates would undercut the fundamental argument behind much of that spending: the promise that it will create new jobs and improve the prospects of working Americans, which Obama has called the ultimate measure of a healthy economy.

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So far, the White House has counseled patience even as the political debate surrounding its economic policies grows more urgent. Officials point out that job growth will not come until robust economic expansion takes hold, which they expect will happen as stimulus funding works its way through the economy. Still, the flagging job market is likely to stir calls for further stimulus efforts as polls show voters growing increasingly wary of federal spending in the wake of a costly series of financial- and auto-industry bailouts and amid current efforts to expand health-care coverage to the uninsured, which is estimated to cost at least $1 trillion over the next decade.

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Before passage of the stimulus bill, the Obama administration had predicted that unemployment would peak at 8 percent before beginning to abate this fall. But unemployment has already reached 9.4 percent, the highest level in a quarter-century, and the situation is not projected to start improving until long after the White House had predicted.

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But with polls showing increasing public opposition to government spending and with no significant constituency mobilized to push for more government investment in jobs, the political prospects for any further stimulus legislation seem slim. Meanwhile, the continued rise in unemployment is creating an opening for Republican critics, who have criticized the level of spending Obama has pursued to try to fix the economy.(Michael A. Fletcher, “Recovery's Missing Ingredient: New Jobs,” Washington Post, June 22, 2009)

 

Wednesday
Jun242009

NH House Republicans Offer Cost-Saving Budget Alternatives

Concord - House Republican Leader Sherm Packard (Londonderry) stood with HB 1 & HB 2 Republican House Conferees today to discuss the impending budget vote and to propose several alternatives.

 

“Representatives Kurk and Scamman offered several spending reductions in the conference committee budget, some were accepted and most were ignored,” stated Packard. “The fact of the matter is that budgets across the country have seen an average 2% decrease in their state spending and the Democrat majority in Concord has increased state spending by an unconscionable 7.7%.”

 

“Republicans were not fully involved in this budget process and while a suggestion or two may have been accepted, there are no significant and meaningful cuts in state spending which would defer the need for the additional taxes and fees that Democrats added in the last hours of conference,” added Republican Conferee Representative Neal Kurk (Weare).

 

No less than a dozen fees were increased, in some cases doubled, with the implementation of several tax plans including tightening belts for LLCs, increasing the Rooms & Meals tax, increasing the tobacco tax for the fourth time in five years and adding a new tax on gambling winnings.

 

“I am disappointed by these tax and fee increases,” said Republican Conferee Alternate, Rep. Doug Scamman (Stratham). “We hurt businesses and we hurt the cities and towns of our state. This is not the New Hampshire way.”

 

Republicans will be offering a continuing resolution to keep state government going at a fiscally responsible level, should the massive spending and taxing increases contained in House Bills 1 & 2 fail to pass the House in session on June 24 and call on all their colleagues to support this plan.

 

 

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Specific General Fund Appropriation Reductions

 

 

Biennial Savings

 

 

Accept House position on retirement (Group I 5-7%, Group II 9-11%) $21 M

 

OADAP reduced to Governor’s level $2 M

 

USNH required to pay their own debt service $39 M

 

Reduce House out-of state travel expenses to 05-06 levels $170 K

 

Reduce Legislative Organizational Dues to $100K per year $230 K

 

Eliminate LCHIP funding $4.5 M

 

Roll-back the 5.5% state employee raise from 1/1/09 $15 M

(This suggestion was adopted in part in the budget in the amount of $25 M)

 

General fund 7% across-the-board-cuts (excluding debt service, direct care & safety services (corrections officers, etc.)) $100 M

 

Specific Cuts offered by House Republicans $181.9 M