Given the debate over Gov. Chris Sununu’s vetoes of two bills to further subsidize the state’s forest products industry, it’s an important question. No one seems to know the answer.
Supporters of the two bills, Senate Bills 365 and 446, say the subsidies would save 900 jobs. Sometimes they say 1,000 jobs. These figures are supposed to include people who depend on the forest products industry for their own livelihoods.
Maybe. But state data show only about 400 people employed in forestry and logging in New Hampshire. That’s down from the high 400s a decade ago.
Some of those good folks showed up in Concord on Thursday to demand that legislators override Gov. Chris Sununu’s vetoes and add even more subsidies to the already subsidized biomass and solar power industries. This is corporate welfare dressed in flannel.
Legislators know that a direct state subsidy of the state’s dwindling number of biomass plants, financed by tax increases, would be a non-starter. So they found another way to pay for this corporate giveaway: Hide the costs in everyone’s utility bills.
Both bills force utilities to pay above-market rates for electricity, thus raising prices for consumers. Because the rate increases would be mandated by law, they’d have the same effect as a tax hike. But because they’d be hidden in your electricity bill, they wouldn’t show up on any list of new taxes.
The state Public Utilities Commission estimated that SB 365 would cost the average commercial utility customer in New Hampshire an extra $5.15 a month, which comes to $75.60 a year. In total, the bill would cost ratepayers about $20 million annually.
Utility customers would get nothing in return for that extra $20 million. It’s just a mandatory price increase. Instead of buying electricity from the lowest-cost producer, utilities would have to buy some of it from the state’s biomass plants, which can’t produce electricity as cheaply as their competitors can.
SB 446 would further increase electricity rates (by an undetermined amount) by letting these biomass plants and other producers build large-scale solar systems — and then forcing utilities to buy that solar power at inflated prices.
These aren’t just subsidies. They’re laws that forbid utilities from buying power at the best rates.
It’s critical to understand that because these bills never became law, upholding the governor’s vetoes takes nothing away from the forest products industry in New Hampshire. It simply means that ratepayers aren’t forced to pay them tens of millions of dollars more each year for the exact same product — electricity — that can be purchased from other providers at a lower cost.
Supporters say the bills are needed to save jobs. But jobs are plentiful in New Hampshire right now. What they really mean is that they’d like everyone to pay more for electricity so about 400 people can keep very specific jobs.
The unemployment rate is 3.2 percent in Coos County, 2.3 percent in Carroll County and 2.1 percent in Grafton County. The economy is galloping like wildlife fleeing the booming steps of Paul Bunyon. The issue is not whether jobs are available in the most thickly forested parts of New Hampshire. They are.
The issue is whether the state should forcibly confiscate tens of millions of dollars a year from 1.3 million people in an attempt to preserve specific jobs for about 400 people.
At about $20 million a year, SB 365 alone would generate enough money to pay each person in the forestry and logging industry roughly $50,000. Tuition at Harvard University this fall is $46,340.
If legislators override the governor’s vetoes, they will force Granite Staters to pay enough money in utility overcharges to purchase a Harvard degree for every forest and logging industry worker in the state every four years.
But instead of buying Harvard degrees or any other form of education or training to enable folks in a struggling industry to better survive a changing labor market, Granite Staters will be freezing a few hundred jobs in time — as the world continues to move on. That’s not a good use of $80 million.
These bills also would hurt Granite Staters who are even worse off than the people in the forest products industry. Higher electricity rates will eat into the budgets of low-income residents as well as manufacturers and other businesses. At 7.3 percent, New Hampshire has the lowest poverty rate in the country. But that still comes to about 95,000 Granite Staters living below the poverty level. To provide a handout to 400 employed people, these bills would take money from scores of thousands of low-income people, many of whom have worse employment prospects.
Subsidies can sound nice and compassionate. Most people want to help their fellow man. But subsidies aren’t just help. Unlike free trade, in which both parties win by getting something they want at an agreed-to price, subsidies help some by harming others. They do this because they force people against their will to pay for something they neither want nor need (in this case, high-priced electricity). That’s not compassion; that’s compulsion.
https://jbartlett.org/wp-content/uploads/shutterstock_1056913124.jpg40596088Andrew Clinehttp://jbartlett.org/wp-content/uploads/logo_white_v1_360x70.pngAndrew Cline2018-09-07 16:00:572018-09-19 20:58:15The lumberjacks are not OK