Concord is abuzz with speculation about the newly elected Democratic majority’s legislative agenda. It’s no mystery. At a panel sponsored by The DuPont Group and New England College on Friday, incoming Senate President Donna Soucy reminded the audience that Democrats campaigned on an agenda (called the Granite State Opportunity Plan), and they intend to govern by it.
The priorities outlined in the plan are clear: Higher state spending on health and social services, education and infrastructure; increased subsidies for favored energy producers; more regulations on businesses; and higher business taxes.
The plan criticizes recent business tax cuts as tax giveaways to wealthy, out-of-state corporations. Democratic candidates from gubernatorial nominee Molly Kelly on down used similar rhetoric when campaigning. The state Democratic Party’s website is full of attacks on Gov. Chris Sununu for supporting business tax cuts.
Yet when Soucy outlined the party’s agenda on Friday morning, she did not mention tax increases. That’s a good sign because the business tax cuts that were so much maligned during the campaign did not reduce state business tax revenue. Since the cuts, business tax revenue has risen far beyond expectations.
As we pointed out in October, in the three full fiscal years since 2016, when the first round of the tax cuts took effect, business tax revenue exceeded budget expectations by $319.5 million.
That trend has not subsided. In the current fiscal year, which started July 1, business tax revenues are $58.2 million (36.6 percent) above plan and $42.8 million (24.5 percent) above the prior year.
More than 1/3 of $1 billion in unanticipated business tax revenue has funded a lot of additional state pending. And that puts the new legislative majority in an interesting situation.
They campaigned hard against those tax cuts. Yet the record shows that the cuts coincided with a sustained increase in business tax revenue that continues to fill state coffers with enough money to fund a host of new spending priorities.
Will the new majority risk that revenue by raising rates, or will leadership decide to leave well enough alone?
Business tax cuts have helped raise New Hampshire to No. 6 on the Tax Foundation’s Business Tax Climate Index. No other New England state is in the top 25. Vermont is a lowly 41. New Hampshire is a lone outpost of business tax sanity in New England, which is clearly helping our economy.
Next week, Americans will indulge in the fine New England tradition of consuming a large fowl fattened for the purpose of providing us sustenance. It’s a tradition that symbolizes the bounty of our land and our market economy. We should remember, though, that there are birds to eat and birds to leave alone.
Plump American turkeys? Tasty. Geese that lay golden eggs? Best to let them keep laying.