By GARY RAYNO, Distant Dome
The celebration last week over the bipartisan approval of the next biennial budget was certainly noteworthy, but despite the festivities there are some long standing problems the budget begins to address but does not solve.
For many years New Hampshire has been two states, one for the wealthy and well to do, and the other for those further down the economic ladder.
The wealth and economic activity used to be concentrated in a triangle bordered by the Seacoast to Nashua and Concord.
But these days the wealth has gravitated to other areas of the state and the inequity between the haves and have nots has grown, making the areas of poverty more pronounced.
When Eversource proposed the Northern Pass transmission project, they assumed the North Country was what it was 20 years ago, but it has changed.
The retiring wealthy urban immigrants discovered the North Country’s fairly cheap — by their standards — land and they built mini-mansions in places tucked out of sight with panoramic views that take your breath away.
When they found out the planned transition line was going through the middle of that view, they hired well-paid lawyers to make sure their investment was protected, dragging out the approval process.
The rest of the North Country had to trek to Concord three or four days a week during the months-long adjudicative hearings to register their opposition to the project that failed after the Site Evaluation Committee voted unanimously to turn it down and the state Supreme Court upheld that decision.
State government itself has basked in the glow of overflowing coffers.
Three straight fiscal years of significant budget surpluses allowed lawmakers in the upcoming budget to spend more money on a number of programs that have needed additional money for some time.
When Republicans and Democrats touted their bipartisan work on the budget, they cited many of the same things: greater access to healthcare including mental health and substance abuse treatment; increased funding for education, housing, childcare, and aid to cities and towns, and higher reimbursement rates for Medicaid providers.
The Republicans also touted no new taxes, eliminating the interest and dividends tax, fiscal responsibility, public safety and reforming the governor’s emergency powers.
The Democrats touted the 12 percent pay raise for state workers and their disappointment in failing to restore state retirement benefits for Group 2 members that include law enforcement, firefighters and other first responders.
An example of the state being friendly to the wealthy was the repeal of the interest and dividends tax, the only state tax based on wealth. Repealing the tax does little for the majority of the state’s taxpayers, but adds considerably to the savings of the wealthy when they no longer have to pay it.
The break that goes to the top 1 or 2 percent is far greater than any property tax relief to property owners the new budget provides.
The property tax does not tax according to your ability to pay, but rather it is only concerned about the value of the property even if inherited or purchased 40 years ago.
Another example of the two New Hampshires is a recent report in the 2023 Kids Count data book, which ranked New Hampshire overall as the best place in the country for kids.
According to the report, New Hampshire is the best state in the country for child well-being. But as the report notes, in New Hampshire and much of the rest of the country, many mothers have to miss work because they cannot find or afford daycare for their child.
The report notes, childcare challenges cost the American economy billions of dollars a year and stymie women professionally.
“Even if a family can afford child care, the demand on providers currently exceeds their capacity to serve families,”saidRebecca Woitkowski, Kids Count Policy Director for New Futures.
Other findings in the report, despite ranking 4th in economic well-being, the state’s cost of living is 20 percent above the national average meaning families are at an increased risk of poverty;
The state ranks 4th in education, but 7th in the country for three and four year olds not attending early education programs, which is half of the state’s children that age;
New Hampshire ranks 2rd in the nation in health, but 7th in child and teen deaths per 100,000;
And 2nd in family and community, but 29 percent are single parent families.
And it is not just young children who are affected.
New Hampshire and Vermont rank last in the country in state support to higher education and have for a long time.
That results in the Granite State college and university graduates having the highest college debt in the country.
The state is also at the bottom in state aid to elementary and secondary education, instead depending on local property taxes to foot the majority of the bill.
That is fine for communities with expansive property bases like those along lakes and the ocean or in resort areas, towns like Waterville Valley or Wolfeboro or Rye or Portsmouth.
The legislature may have put $170 million more into its education funding bucket, but that additional money is not enough to help the cities and towns in a death spiral due to high property taxes and a shrinking economic base and fewer students.
The communities that do really well under the plan are those with a large number of students who come from poor families, or Manchester and Nashua, or towns with growing school populations like Windham or Bedford or Hanover.
The five school districts that brought the Claremont lawsuit barely receive more than they receive now and it will be decreasing in the future as the hold-harmless money phases out.
The state’s economic structure does not expect the wealthy to pay their fair share, but does expect property owners of all kinds from rich to poor, from trailer parks to gated communities to pay property taxes.
But the property owners in gated communities or of large commercial or office buildings or MacMansions pay a far smaller percentage of their income than the ones in trailer parks and small aging houses.
Both the Democrats and Republicans touted maintaining the New Hampshire Advantage when they praised the bipartisan work on the budget about to go into effect July 1.
Former Gov. Steve Merrill is credited with coining the phrase “the New Hampshire Advantage,” which everyone believes to mean no income or sales tax.
Most people don’t know the sound byte was created to answer then Senate President Ed Dupont’s Economic Development Plan in the Republican gubernatorial race in 1990 because Merrill did have one when the state was trying to rebound from a significant recession that destroyed the five largest banks in the state.
If you live in the poor side of the state, the New Hampshire Advantage has kind of a hollow ring.
Garry Rayno may be reached at garry.rayno@yahoo.com.
Distant Dome by veteran journalist Garry Rayno explores a broader perspective on the State House and state happenings for InDepthNH.org. Over his three-decade career, Rayno covered the NH State House for the New Hampshire Union Leader and Foster’s Daily Democrat. During his career, his coverage spanned the news spectrum, from local planning, school and select boards, to national issues such as electric industry deregulation and Presidential primaries. Rayno lives with his wife Carolyn in New London.
