Fewer NH legislators have local public service experience, study finds

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Since the turn of the 21st century, the percentage of freshmen New Hampshire legislators with a record of public service in their community has fallen significantly, a new UNH study shows. Instead of having served on a select board or the board of a local non-profit group, today’s legislators are increasingly public service rookies.

The study, “All Politics, No Longer Local? A Study of the New Hampshire House of Representatives, 2001–2021”, which I co-wrote with UNH Political Science Professor Dante Scala, shows that local ties in the New Hampshire House have declined over the last two decades.

“In brief, we conclude that while the latest generations of New Hampshire state legislators still often have significant local governing and civic experience prior to their service in the General Court, they have been less likely over the past decade to bring that type of experience with them to the legislature,” we wrote. 

We observed this decline among both men and women, as well as Democrats and Republicans.

We examined new House members’ biographies from the 2001–2002 to the 2021–2022 N.H. House (1,179 legislators in total), chronicling their experiences and backgrounds prior to joining the chamber. 

Examining each decade separately, we found that the average proportion of new legislators with local government experience in a given year across the first decade of study (2001–2011) was 50%. 

This proportion dropped significantly in the second decade. From 2013–2021, the average proportion of new legislators with this type of experience was 43%—a 14% decline.  

There was an even greater drop in civic experience. On average, 49% of new legislators in a given year had previous experience in civic groups during the first decade. This fell to 35% in the next decade—a 29% decrease.

Overall, the percentage of legislators with some form of local engagement, either in government or civic groups, shrunk between the two decades. 

“In the 2000s, the participation rate was typically above 70 percent; in the last decade, however, the rate fell into the 60s and in some cases even lower,” we wrote.

After the 2020 elections, Americans for Prosperity State Director Greg Moore observed a sharp drop in legislators with local community service experience. 

“You’ll find a lot fewer people who were school board members or city councilors or aldermen, and a lot more folks for whom this is their first entree into politics,” Moore said. 

He attributes the shift to a change in the way candidates for state office are recruited.

“The real change is that there are now groups on the right and the left that recruit candidates who align with their views for these rep. seats and then help them win primaries,” Moore said. “Earlier, local party committees did the recruiting and recruited on the basis of experience and having won local elections.”

The result is that rather than a body composed of local volunteers, you get a legislature increasingly made up of activists who adhere to their party’s platform.

“What it means is that you end up with more representatives who are inclined to vote based on principles instead of being people pleasers,” Moore explained. “With that said, primary voters seem to respond to principled candidates versus those who reflect various factions in their community. This isn’t a bad thing, it’s just different from when I first started working with the New Hampshire Legislature 20 years ago.”

Elections at all levels have become increasingly nationalized. Although New Hampshire is still known for its local brand of politics, this research suggests that even the Granite State’s quintessential volunteer legislature has succumbed to national polarization.

While the study acknowledges that the typical state representative still often carries with them an element of local ties, the marked drops in previous local government and civic experience among newly elected members of the House suggest that the makeup of the lower chamber is undergoing significant changes. 

And these structural changes have likely affected the House’s work. “If we take it that legislators’ backgrounds, at least in part, inform their political opinions and policy preferences,” we suggest in the study, “then the general decline in local governing and civic experience among new members of the New Hampshire House may have had an effect on the type of legislation coming out of the New Hampshire General Court.”

You can find the full study here. 

 

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Would the Founders consider us free?

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On July 4th, Americans celebrate not just the formation of our nation, but the inspiring ideals of the second paragraph of the Declaration of Independence. It’s currently fashionable to question whether Americans live up to those ideals, or ever have. But the predominant voices of doubt ask the wrong question.

The foundational question is not whether Americans have failed to achieve equal outcomes. The answer to this will always be no because perfect equality of outcomes is impossible.

The foundational question is this: Against what did the Founders rebel?

Historian Bernard Bailyn, in “The Origins of American Politics,” answered this question. 

“The colonists universally agreed that man was by nature lustful, that he was utterly untrustworthy in power, unable to control his passion for domination. The antinomy of power and liberty was accepted as the central fact of politics, and with it the belief that power was aggressive, liberty passive, and that the duty of free men was to protect the latter and constrain the former.”

The Founders cited “corruption” constantly, and by this they meant the abuse of government power to distribute favors, offices, riches and influence among a small group of connected aristocratic elites. 

New Hampshire’s colonial government worked exactly this way. Colonial Gov. Benning Wentworth “packed the Council with his supporters, intervened successfully in local elections, bought the favor of the representatives he did not select, and filled the local offices—‘judges and justices…the secretary, treasurer, sheriff, register of probate, and the military officers’—with his own men,” Bailyn wrote. 

The Pine Tree Riot in Weare on April 14, 1772, was a reaction against this extraordinary level of elite domination of New Hampshire’s economy. 

Marxist and Progressive historians asserted that the primary antagonists in the American Revolution were the rich vs. poor or the propertied vs. unpropertied. Later historians demonstrated conclusively that this was nonsense. As historian Gordon S. Wood put it, the actual antagonists were courtiers vs. patriots. 

John Adams described courtiers as those who worked to please and flatter great men “to obtain their smiles, esteem, and patronage, and consequently their favors and preferences.” Patriots were the outsiders who owed their station in life to their own striving rather than to crown patronage. 

“Only by understanding the hierarchical structure of monarchical society and taking the patriots’ assault on courtiers seriously can we begin to appreciate the significance of the displacement of the loyalists,” Wood wrote in his Pulitzer-winning “The Radicalism of the American Revolution.”

Progressives get right that there have always been outsiders and insiders in American society, and insiders always seek to use the power of the state to maintain their insider status. What they get wrong is that the solution is to hand more power to the insiders. 

The Founders believed the opposite. They strove to create political, economic and legal systems that limited and constrained the power of insiders, then distributed much of that power to outsiders.

We at the Josiah Bartlett Center for Public Policy obviously take the patriots’ side in this debate. (We named our organization after one of them, after all.) 

When we look at state and local government in New Hampshire today, we try to keep the Spirit of ‘76 alive by asking whether current policies divide Granite Staters into insiders vs. outsiders. Or as the Founders might have understood it, whether they create courtiers. 

When we write about licensing, housing, education, energy, regulation, the budget, taxation, health care, transportation and any other issue, we’re looking for this dichotomy. 

Unfortunately, we find it often. From guild-inspired occupational licensing laws to green energy subsidies to local land use regulations that price homes out of the reach of middle-and lower-income families, New Hampshire has too many laws, ordinances and regulations designed to turn patriots into courtiers. 

The purpose of the American project was to replace a system of courts and courtiers with a system of decentralized powers wielded disinterestedly by free and independent citizens. 

The independence is the point. That doesn’t mean every American is an island. Families, friends, communities, organizations—Burke’s little platoons—connect us and support us in critical ways. Independence means independence from government control or coercion. 

Free markets empower individuals (and the social networks they create voluntarily) to live as they desire—to pursue happiness, in other words. They strengthen our independence and weaken the state’s power to coerce (to convert patriots into courtiers).

The Founders likely would be amazed at the social and political equality Americans have created, and at the levels of freedom we have achieved. But they’d also recognize too many remnants of their aristocratic age (as well as our tax rates). If we want to live up to the Revolution’s ideals, it’s our task to tear down those remaining fragments. When we replace mandates with markets, we convert courtiers into patriots. That should be every American’s goal.  

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The many benefits of a court docket for land use cases

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In 2019, the state created a Housing Appeals Board to offer a speedier resolution to land use disputes between property owners and local boards. Though the cases that have gone to the board have been resolved quickly, a large backlog of cases remains in Superior Court.

Richard Head, government relations coordinator for the state judicial branch, told the House Judiciary Committee last month that the volume of land use cases in state courts has not noticeably changed since the Housing Appeals Board began operations in 2020. It turns out that there are so many legal challenges to local land use decisions that the state Superior Court has a constant load of between 60-100 cases at any given time, according to the judicial branch.

It can take more than a year for a landowner or developer just to get a court hearing if a local board improperly denies a building permit. It can take up to three years before the courts reach a decision, developers say. That long wait gives local regulatory bodies an upper hand in these disputes. 

The legal playing field should not be tilted in favor of government. Private citizens, whether homeowners challenging the rejection of a garage or developers challenging the denial of a commercial project, should have quick and ready access to the court system when they suspect a local board of illegally denying them the use of their property. (Local governments deserve the same if they suspect a developer of violating local ordinances.)

Within the court system, there are two obstacles. One, there aren’t enough Superior Court judges. The judicial branch is 3.5 judges short of being able to keep up with its existing caseload, according to its own presentations to legislators. Two, land use cases tend to be large and highly complex, which slows them down. 

New Hampshire has more than 200 unique zoning codes, many of them exceeding 100 pages, according to testimony by state Rep. Ben Ming, D-Hollis, an attorney who practices real estate law. 

The judges who hear these cases say the parties would be better served if a single judge could be assigned to hear all land use cases. 

“When asked, the judges in our Superior Court described these types of cases as complex,” Head told the House Judiciary Committee in January. The judges “require a great deal of time to get up to speed” when they receive one of these cases. 

“And one of the things the judges commented on was if we only see these as part of our regular docket and mixed in and occasionally, it is just a greater lift to get up to speed again and to get refamiliarize yourself not only with the case itself but with the technical aspects of it and the law, which is also, as you’ve heard, very complicated, long, and detailed,” Head said. “So to be able to consolidate these types of cases, the complexity of these cases, into a single docket would just have inherent benefits associated with doing so.”

Head’s explanation came in his testimony in January for House Bill 347, which would create a land use docket in the state Superior Court and fund the hiring of an additional justice to hear those cases. Importantly, the bill covers all local land use regulations, not just housing, so commercial and industrial property would be included. The state has a shortage of industrial buildings too, though it’s not as well known or as severe as the housing shortage. 

Creating a land use docket would accomplish five goals:

  1. Create within the judicial branch a level of expertise on these complex cases that would benefit all parties — the local boards, the property owners, and the justice who handles the cases;
  1. Reduce the long backlog of land use appeals that delay projects and discourage wronged parties from going to court;
  1. Create a level of consistency and continuity on complex land use cases that local boards and property owners could use to guide their future decision-making;
  1. Reduce backlogs of other civil cases, as the complex land use cases go to a newly hired judge;
  1. Generate economic benefits by reducing the amount of time and money local boards, property owners and developers spend in court, freeing them to spend more time concentrating on their core activities. 

Adding a land use docket to the Superior Court, and hiring a justice to handle the cases, will not solve the state’s housing and industrial real estate shortages. Better local land use regulations are the answer. But a separate court docket would greatly improve the dispute resolution process, level the playing field, and have the additional benefit of speeding up court cases in general and reducing the costs for property owners, developers and local governments. 

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How the state budget enhances the Legislature’s emergency powers

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The final House-Senate compromise added to this year’s state budget was a deal to give the Legislature more power during a declared state of emergency. This was an issue of heated debate, as many legislators thought the House and Senate needed a more active role in governing during a state of emergency. The compromise doesn’t go as far as some House members wanted, but it does enhance legislative authority in some important ways.

The Legislature’s existing emergency powers

Under existing law (RSA 4:45), both the governor and the Legislature have the power to declare a state of emergency. The Legislature can exercise this power by passing a concurrent resolution of both the House and Senate.

Once a state of emergency is in effect, the Legislature has the power to terminate it by passing a concurrent resolution in each chamber. 

One might have thought that the Legislature was powerless to act once an emergency had been declared. That is not the case. If a majority of legislators believes a state of emergency is no longer justified, or never was, it can convene and vote to end the emergency at any time. 

If the Legislature votes to end a state of emergency, the governor has the authority to declare “a new emergency for different circumstances.” That is, once the Legislature has ended a state of emergency, the governor cannot declare the same emergency for the same reasons again. Any new emergency would have to be based on “different circumstances.”

What the Legislature doesn’t have the authority to do under existing law is repeal a specific emergency order other than the emergency declaration itself. This was a big frustration for some House Republicans during the COVID-19 emergency. It also doesn’t have a process in place for reviewing states of emergency. It can convene itself at any time, but there is no calendar or schedule in place to generate periodic reviews automatically. 

Emergency powers enhanced in the budget

The Committee of Conference amendment rewrites RSA 4:45 to enhance legislative emergency powers in three specific ways.

  1. It requires the governor to notify the House and Senate of “impending” emergency orders “as soon as practicable” and to “provide a description of such orders.” This notification requirement ensures that legislative leadership will be informed prior to a declaration of emergency.  
  2. It gives the Legislature the power to terminate “any emergency order” in addition to the emergency declaration. This creates essentially a line-item veto for the Legislature. The General Court can keep a state of emergency in place but rescind any particular emergency order it doesn’t like. Currently, its only option is to repeal the state of emergency itself. Under the proposed change, legislators could partially co-manage an emergency by negotiating with the governor over the orders it would like to see. With the power to repeal any order, lawmakers would have a significantly increased say in what orders are made. 
  3. It requires the governor to call a legislative session 90 days into a state of emergency, and then every 90 days for the duration of the emergency if it lasts longer than the first 90 days. At each of these sessions, the Legislature is required to vote by concurrent resolution on whether to terminate the state of emergency. This forces a legislative vote every 90 days on whether to maintain or repeal a state of emergency.

These changes are not as comprehensive as some House members would have liked. But they elevate the General Court’s role during a state of emergency from spectator to co-manager. 

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How a bipartisan bill would fix New Hampshire’s qualified immunity problem

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A bill to be considered by the House of Representatives this week would end the legal doctrine of qualified immunity in New Hampshire. This policy brief offers a quick explainer of the bill and the broader issue of qualified immunity it addresses.

What is qualified immunity?

Qualified immunity is a legal doctrine created by the U.S. Supreme Court in interpreting a federal statute, 42 U.S.C. § 1983 (“Section 1983”). Congress originally enacted Section 1983 in 1871 as the Ku Klux Klan Act, and it was designed to provide citizens a remedy in federal court when state officials violated their constitutional rights. But qualified immunity, which appears nowhere in the text of Section 1983, frustrates that purpose. 

In simple terms, it holds that all government employees are presumed to be immune from civil prosecution for violating a citizen’s civil rights unless those rights have previously been “clearly established.” Courts have taken that to mean that a government employee is immune unless a previous U.S. Supreme Court case, or a federal circuit court in the same jurisdiction, showed that precisely the same behavior in the same circumstances was found to have been a civil rights violation.

Importantly, government employees are presumed to be immune from prosecution for civil rights violations regardless of whether their behavior was reckless. Courts have held that even if a police officer acted recklessly, the officer is protected under the qualified immunity doctrine because there was no previous case establishing that the specific behavior was a civil rights violation.

The absurdity of this doctrine is self-evident, as numerous court cases have shown. For example, a U.S. District Court in Texas ruled last year that a prison guard violated an inmate’s constitutional rights by pepper spraying him in the face for no reason. Yet the court held that the guard was protected by qualified immunity because no previous case had established that assaulting a prisoner with pepper spray, as opposed to a baton or Taser, was unconstitutional.

“Despite recognizing that an unprovoked assault violates the Constitution, the majority grants the guard immunity because we have not decided a similar case involving pepper spray,” the dissenting judge lamented.

What does House Bill 111 do?

HB 111, introduced by Democrat Paul Berch and Republican Tony Lekas, does two things.

  1. It establishes a cause of action in state court to sue the state, and its political subdivisions, for a violation of rights. (Note: suits are to be against the government, not the individual employee.) It makes clear that the state or political subdivision cannot claim immunity by asserting that the rights violated by the state agent were “not clearly established.” That language ends qualified immunity for government employees.
  2. It holds government employees named in such civil lawsuits shall not be held financially liable. This ensures that employers, not government employees, bear the financial burden of paying damages to citizens whose rights were violated.

How would this make government in New Hampshire more accountable?

The broad and unjustified protections offered by the qualified immunity doctrine reduce the incentive for government to offer adequate employee training. If employees are largely protected from civil lawsuits, then why bother training them on issues related to citizens’ rights?

If HB 111 becomes law, citizens would still have the burden of proving that their rights were violated. But government employees would no longer enjoy default protection by claiming that, without a previous court case involving virtually identical behavior and circumstances, they couldn’t possibly have known it was illegal to violate a citizen’s rights.

Ending qualified immunity protections would therefore create a strong incentive for government to better train employees on constitutional rights, while also giving citizens a way to hold government accountable in state courts when such violations occur.

Right now, even though the New Hampshire Constitution contains a lengthy Bill of Rights intended to protect citizens against specific government actions, state law provides no cause of action when those protections have been violated. HB 111 would make it easier for citizens to hold government accountable when it violates rights guaranteed by the state constitution.

The ‘flood of lawsuits’ prediction

Defenders of qualified immunity claim that ending it would result in a flood of frivolous lawsuits. The New Hampshire Police Association and the New Hampshire Municipal Association suggested in testimony before the House Judiciary Committee in February that without qualified immunity, any government employee could be sued for anything. As examples, they cited “anybody fixing a road,” or building inspectors issuing an occupancy permit.

But the bill does not create a cause of action for bad workmanship or general poor performance. It creates a cause of action only for a violation of constitutional rights. There is no constitutional right to a properly filled pothole.

There is strong evidence, however, government employees in New Hampshire regularly violate citizens’ rights. New Hampshire Public Radio reported last year that state and local police agencies settled 87 civil rights claims totaling $4.3 million from 2010-2020.

Even in New Hampshire, government does violate people’s civil rights, on a distressingly regular basis. House Bill 111 would provide a way for citizens to hold government accountable in state courts when this happens.

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Eight police reform proposals

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In our republican form of government, all public employees, including police officers, exercise only the powers granted them by the people. All public employees serve the citizens and are accountable to them. The powers granted to public employees are altered from time to time as the people demand.

High-profile abuses of police power in recent years have led to widespread demands for increased accountability. In this paper, attorney Chuck Douglas offers eight proposals for reforming New Hampshire police practices and making officers more accountable to the people.

The eight proposals are:

  1. Make police discipline files public.
  2. Outlaw chokeholds or neck compression, regardless of the circumstances.
  3. Mandate body cameras and verbal warnings.
  4. Require officers to intervene, stop, and report misconduct.
  5. Improve screening and treatment for PTSD.
  6. Pursue more and better de-escalation training.
  7. Adopt better use-of-force policies that require force to be reasonable, necessary, and proportionate to the crime and circumstances.
  8. End officer immunity from civil lawsuits.

You can download and read the full report (in pdf format) here: Josiah Bartlett Center Eight Police Reform Proposals

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An online reverse auction can save N.H. up to $22.2 million a year on prescription drugs

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A new Josiah Bartlett Center for Public Policy study finds that switching to an online reverse auction for the state’s pharmacy benefits management contract can save New Hampshire taxpayers save up to $22.2 million a year.

The study by Dr. Wayne Winegarden, director of the Center for Medical Economics and Innovation at the Pacific Research Institute, finds that New Hampshire can expect to save an estimated $17.8 million — $22.2 million a year by using an online reverse auction to generate more competitive bids for pharmacy benefits management. Over the three-year life of the state’s existing pharmacy benefits management contract, the savings would total an estimated $42.5 million — $53.1 million. (Under the contract, the annual costs are different from year to year.)

“At a time when budget savings are needed, New Hampshire could save millions of dollars annually by adopting an online reverse auction to purchase PBM services,” Dr. Winegarden said. 

Josiah Bartlett Center President Andrew Cline emphasized the value of always looking for cost savings through improved systems, not simply cutting budget line items.

“This study shows the importance of always looking for opportunities to increase taxpayer value by improving system operations,” Cline said. “Adopting a modern, internet-based bidding system for the state’s pharmacy benefits management is a great example of how taxpayers and public employees can save money without reducing services.” 

Pharmacy benefit managers (PBMs) administer prescription drug benefits for commercial and government health plans. PBMs negotiate prices with drug manufacturers, maintain the plan’s drug formulary (the list of approved drugs), and process claims. 

New Hampshire used a traditional Request for Proposal (RFP) process when it signed a three-year, $212.5 million PBM contract with Express Scripts in 2018. Using an online reverse auction rather than a traditional RFP process could have saved the state tens of millions of dollars over the life of the contract, this analysis shows.

In an online reverse auction, pre-qualified suppliers provide competing bids (typically over multiple rounds) to a single buyer. It is the reverse of the more familiar forward auction, in which buyers compete to purchase a product or service from a single seller. For PBM services, New Hampshire would be the single buyer inviting several PBMs (the multiple sellers) to bid on providing PBM services to the state over a defined time period.

Online reverse auctions have saved governments and private businesses billions of dollars and have become a standard procurement method for large organizations. New Hampshire should adopt them for its PBM contracting as well as any other services for which they could produce savings. 

The full study can be read here (pdf): JBC Reverse Auction For PBM services Study Winegarden

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Five guidelines for reopening New Hampshire’s economy

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New Hampshire’s economy spent March and April of 2020 rapidly contracting. Cell phone data and reported restaurant and retail store revenue show that consumers voluntarily began staying home in the early March. Then on March 27 the governor issued a stay-home order and ordered “non-essential” businesses closed to in-person interactions.

That one-two punch put nearly 160,000 Granite Staters out of work in a matter of weeks. The state’s unemployment rate rose from less than 3% in March to approximately 15% in April, according to state figures released this week. 

Those numbers are not just statistics on a financial spreadsheet. Each application for unemployment benefits represents a real person who has been made idle involuntarily. 

Those Granite Staters — our friends, neighbors, and family members — have lost the ability to provide for themselves and their families. Some of their employers have stayed open with skeleton crews, some have closed temporarily, some permanently. 

New Hampshire’s economy is in serious long-term danger because roughly 96% of New Hampshire businesses are small businesses. Small businesses tend to have low cash reserves. A JP Morgan Chase study of nearly 600,000 small businesses in 2015 found that the median small business holds less than one month’s worth of cash reserves. A quarter hold less than two week’s worth. If small businesses remain closed by state order much longer, many won’t survive. 

Again, that’s not just a financial story. It’s a human one. Businesses provide the goods and services people need, and the revenue businesses generate pays the rent, the mortgage, the grocery bills, the gas bills, etc., for all of their employees. 

Free economic exchange is not a luxury to be disregarded in times of crisis. It is how Americans feed, clothe, and shelter themselves. It is how most of us define who we are. It is how people generate the business profits that fund scientific research and the tax payments that fund government services. It is, by itself, essential for the creation and maintenance of any prosperous and healthy society.  

Getting people back to work, then, ought to be an urgent priority for state and local policymakers. 

The government has a vital role to play in minimizing the possibility that a deadly new disease will overwhelm our health care system. But achieving that goal can and should be done in a way that produces the smallest possible negative impact on the economy. Here we suggest five ways to achieve both of those important goals. 

To reopen the economy with minimal risk to the health care system, government policy should follow five guidelines:

  1. Exercise the minimum intervention necessary
  2. Focus on safe practices, not categories of businesses
  3. Enable innovation and adaptation
  4. Reduce costs and burdens on employers & business owners
  5. Prioritize information and flexibility over control

Read the full report here: JBC Reopen Report

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Will legislators add new unfunded liabilities to State Retirement System?

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On public policy, New Hampshire should always beat Vermont, as a matter of principle. That goes double for the handling of money. The state that sends a self-proclaimed “socialist” to the U.S. Senate should never get to say it’s more responsible with a dollar.

New Hampshire has bragging rights here. The Granite State is 12th in the Mercatus Center’s ranking of states by fiscal condition. Maine is 34th, Vermont 39th, Massachusetts 47th. 

And yet there’s one area where New Hampshire and Vermont are uncomfortably close: the Pew Center’s national ranking of the best-funded state retirement systems. Both states are down in the 30s, with less than 70 percent of their pension liabilities funded. 

So Vermont officials might have watched approvingly on Wednesday when the House advanced a bill that would worsen the financial position of the New Hampshire Retirement System. 

Instead of edging the State Employee Retirement System closer to the point at which it might some day have enough money to pay what the state owes its retirees, House Bill 1205 would edge us slightly in the opposite direction.

The state’s retirement system ended the 2019 fiscal year 64.8% funded. The system hasn’t been above 70% funded since 2004. Vermont has two state retirement systems, one for state employees, which is just over 70% funded, and a separate system for teachers, which is funded at about 54%. Pew’s latest ranking (using 2017 data), puts Vermont at 64.3% funded.

By contrast, Maine is a Northern New England lighthouse beacon of frugality, with 82% of its obligations funded. 

HB 1205 would nudge New Hampshire downward by eliminating an existing 10% reduction in retiree benefits that kicks in for Group 1 employees (general government employees and teachers) at age 65. The bill would cost the retirement system $37 million, according to its fiscal note. It would cause a slight (less than half a percentage point) increase in government contributions to the system (that is, taxpayer contributions).

When the mandatory cut was passed into law in 1988, 65 was the Social Security retirement age. The age has since inched up to between 66 and 67 years for retirees born in 1938 or later, but state law has kept the pension reduction pegged to age 65.

As a technical update, one can see the logic behind HB 1205. But that logic doesn’t generate its own money. The bill includes no funding to pay for its increased cost.

It’s a $37 million “giveaway,” Rep. Carol McGuire said when speaking against the bill. 

McGuire wasn’t able to convince her colleagues to vote against the bill. But she did succeed in tabling a bigger one, HB 1341. That bill contains a lot of changes, the largest being that it would raise the contribution rate for a large chunk of Group II employees by changing the formula for calculating their pensions. Municipalities would be hit with a large, mandatory increase in their retirement contributions. 

The bill as originally drafted would have added $142 million in unfunded liabilities to the State Retirement System. An amended version on the House floor on Wednesday had no fiscal note, but legislators say it would cost less than the original. 

Supporters tried and failed to remove the bill from the table on Wednesday, so it remains in limbo for now.

Though New Hampshire’s general frugality has kept the state from issuing the sorts of lavish unfunded promises to state employees that have made jokes of the retirement systems in Connecticut, Illinois and New Jersey, most state pension funds are more fully funded than ours. 

Recent returns indicate that loading the system with more unfunded promises would be particularly risky this year. The retirement system’s rate of return on investment was only 5.7% last year, below the assumed 7.25% and well below the previous year’s 8.9%. That translates into a $229 million (32%) drop in investment income from 2018 to 2019.

The retirement system has a plan to move toward full funding over the next two decades, but it relies on hitting investment revenue targets. Consistently lower market returns, like last year’s, and adding large unfunded liabilities would throw off the plan.

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Janus ruling reversed years-long growth in state employee union membership

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Last year’s U.S. Supreme Court ruling in Janus v. AFCSME triggered a 5.9% reduction in New Hampshire state employee union membership, state payroll data obtained by the Josiah Bartlett Center for Public Policy show. The sudden drop reversed a years-long trend of rising union enrollment in state government.

Prior to the Janus decision, New Hampshire was one of 22 states plus the District of Columbia that forced non-union employees to pay union fees. Janus forbade states from collecting those fees.

New Hampshire halted this “agency fee” collection immediately after the ruling last June. In the following 12 months, state employee unions collectively lost 420 members, or 5.9% of their enrollment.

The vast majority of those losses (92.4%, or 388 members) came from the State Employees Association, according to state payroll figures.

Because the state withholds union dues from paychecks, union membership is trackable through payroll records. Those records show that in the previous five years, state employee unions had grown steadily, adding an average of 184 members a year.

Twelve months later, payroll records show that the Janus decision wiped out nearly half of those gains in just one year. The Josiah Bartlett Center obtained the data through right-to-know requests.

The inescapable conclusion is that hundreds of New Hampshire state employees had been joining labor unions only because they were being forced to hand over their money whether they joined or not.

Finally free to decide for themselves whether to support a union, they’ve chosen, along with more than 2,000 other state employees, to keep their money.

“Agency fees” and free speech

“Agency fees” were withheld from state employee paychecks and given directly to the unions on the theory that collective bargaining agreements benefitted all employees.

In Janus v. AFCSME, the Supreme Court held that state government “extraction of agency fees from nonconsenting (sic) public-sector employees violates the First Amendment.”

The court concluded that agency fee collection “violates the free speech rights of nonmem­bers by compelling them to subsidize private speech on matters of substantial public concern.”

As of the date of the Janus decision, 2,161 non-union N.H. state employees had been compelled to pay $1,012,055.83 in agency fees during the previous 12 months, payroll data the Josiah Bartlett Center obtained last year showed.

Instead of seeing those employees rush to join, unions lost withholdings from another 420 employees the next year. The figures show that agency-fee payers were not the only ones bankrolling unions reluctantly, in violation of their First Amendment rights. So were hundreds of union members.

The Janus drop

To see whether the decline in membership since the Janus ruling was an outlier, we obtained the union membership figures for the five years leading up to the court’s decision.

Conveniently, the Janus decision was handed down on the final week of New Hampshire’s fiscal year, which gave us the ability to look at union membership at the end of each state budget year.

State payroll data show a steady increase in union dues withholdings from 2013-2018. During those five years, state employee unions gained 922 dues-paying members. In no year did union membership drop.

Then, in the fiscal year following the Janus decision, state employee unions lost 422 dues-paying members, or 45% of the enrollment they had gained during the previous five years.

The financial losses that accompanied this membership decline appear to be small, however. According to state figures, unions lost only $5,388.50 for the year.

A drop, not a disaster

The drop in membership is not the financial catastrophe some advocates on both sides had predicted. Long-term effects won’t be known for years, but the immediate effect, though notable, is less dramatic than many had anticipated.

The largest financial losses came with the abolition of agency fees. New Hampshire state employee unions lost more than $1 million a year in agency fee collections from non-members after the Janus decision. But they managed to hold on to 94 percent of their members, losing only a few thousand dollars in membership dues.

The payroll data suggest that most state employees find value in union membership while a smaller portion either doesn’t want to associate with a union or has concluded that the costs outweigh the benefits.

The state payroll data spreadsheets can be viewed here: Union Dues 2013 Through 2019 Web.

A pdf of this brief can be downloaded here: Janus Effect Union On NH Union Membership.

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