Five ways defined contribution retirement plans would benefit N.H.

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In 2025, the public appetite for cutting unnecessary government expenses, improving efficiency and reducing taxpayer liabilities is enormous. Inflation put tremendous stress on household finances as COVID-era regulatory and spending decisions tanked Americans’ trust in government management. In New Hampshire, policymakers are looking for new ways to deliver core services at lower costs. 

One reform that would lower taxpayer liabilities while improving services is switching from a traditional defined benefit (DB) pension to a defined contribution (DC) retirement plan for new state employees. This would be a responsible way to create long-term savings without cutting state services. DB plans obligate taxpayers to finance specific payouts to public employee retirees even if the state failed to fully fund those payouts. DC retirement plans, which most private-sector employees (thus, most taxpayers) have, can provide retirement benefits at lower costs and lower risk.

This policy brief offers five reasons to consider creating a DC retirement plan for new state employees.

1. A DC plan avoids future unfunded pension liabilities

The New Hampshire Retirement System is a defined benefit pension plan in which employees are promised specific payouts after retirement. The state must pay these obligations even if it failed to fully fund them or the plan’s investments didn’t generate enough revenue to meet them. Currently the retirement system’s unfunded liabilities are about $5.6 billion. The design of this system creates future unfunded obligations that must be paid (if the state keeps its word). In other words, debt. That debt obligation falls on taxpayers. This chart from the Reason Foundation’s Annual Pension Solvency and Performance Report shows the steady gap between New Hampshire’s pension assets and liabilities.  

Instead of obligating taxpayers to finance a fixed annual payment decades in the future, DC plans create investment accounts into which the state deposits fixed amounts. The taxpayer is obligated to make an investment up front, rather than a determined payment at the end. Because the taxpayer obligation comes from the initial investment, DC plans don’t have unfunded liabilities. 

2. Pension liabilities crowd out other needs

Government pension benefits are typically treated lavishly in contract negotiations, but not fully funded later. That creates debt obligations that crowd out other services as governments divert funds to pension obligations. A 2024 University of Texas study of the effects of pension liabilities on California cities found that to free up money for pensions, cities “primarily reduce non-current expenses, specifically capital investment.” They also “cut payrolls and employment, with police employment declines specifically. Further, there are accompanying increases in crime rates. These estimates imply that pension pressure impairs local public service provision, with contributions displacing other spending.” During testimony this year on a bill to allow open enrollment in K-12 public schools, the president of the N.H. chapter of American Federation of Teachers underscored the point made in the study above. She opposed the bill, she said, because districts had to maintain enrollment to fund pension obligations. A pension system that discourages innovation is one that serves neither taxpayers nor citizens well.

3. DC plans offer portability & earlier vesting

The old-fashioned public-employee pension plan is not designed for today’s mobile workforce. It’s not even designed well for older workers. A U.S. Bureau of Labor Statistics study of Americans born between  1957-1964 found that they averaged 12.7 jobs over their careers. Members of Gen. Z are expected to have an average of 18 jobs over their careers. A BLS study last year found that wage and salary workers spent a median of 3.9 years with their current employer. Few employees, public or private, stay in one job for even a decade, much less their entire careers. 

It takes 10 years for state employee pensions to vest, but most state employees don’t last that long. A 2024 Reason Foundation study of public pension plans in 12 states found that 62% of public workers leave before their pensions vest. Many people believe it’s compassionate to offer public employees a generous DB pension. But a pension system designed so that the large majority of public employees will never vest in it is not a good deal for most public employees. DC plans vest much earlier, usually within a few years, and could vest immediately. DC plans also are heritable if an employee dies, unlike DB plans. 

4. Pensions are more costly and less safe than assumed

Defenders of DB pensions claim that traditional pensions are safer than DC plans. State Employee Association President Rich Gulla testified in January that New Hampshire shouldn’t adopt a DC plan for state employees because such a plan would be invested in stocks, which risk losses. Asked if the New Hampshire Retirement System invested in the stock market, he said he didn’t know. It does. In the 2024 fiscal year, 51.3% of NHRS funds were invested in equities.

How did those investments do? According to the system’s annual report, the 8.8% return on total investments “underperformed the total fund custom index (a blended composition of major market indices in proportion to the NHRS’ asset allocation), which returned 11.9%.” The equities portion of the NHRS portfolio underperformed the market in FY 2024 as well. “Domestic Equity generated a return of 19.0%, underperforming the Russell 3000 Index return of 23.1% by 420 basis points. The non-U.S. equity portfolio returned 11.3% during fiscal year 2024, underperforming the MSCI All Country World (ex U.S.) index return of 11.6% by 30 basis points,” the annual report stated.

Trading lower returns for a guaranteed payout isn’t necessarily a great deal, especially for younger employees. The NHRS was just 68.6% funded in FY 2024. A January study by the Equable Institute had our funded ratio slightly higher, yet still ranking just 41st in the country. Contrary to the messaging of public employee union leaders, state pensions are far from secure, and New Hampshire’s is one of the least well-funded in the country. A Pew Charitable Trusts analysis concluded that New Hampshire had to dedicate 9.4% of the state’s own-source revenue ($512 million) annually to cover pension obligations. 

And that’s if our liability estimates are correct. A 2024 Stanford University study of public pensions concluded that they were in far worse financial shape than official data suggest because “future pension obligations are being grossly undervalued.” 

The problem is structural, the study concluded, and the lead author recommended that “states and cities could move to defined contribution plans similar to those offered by private employers. Employer contributions could still be quite generous, but the plans would be much less expensive to run because they would not guarantee a preset lifetime benefit.”

5. DC plans can lower costs and achieve solvency

The average N.H. state employee pay is $65,360, which is just $750 less than the average for the state as a whole ($66,110). It’s hard, then, to justify making taxpayers shoulder the burden of financing expensive guaranteed pensions they don’t enjoy themselves. With a DC plan for new state employees, this discrepancy would end, and the plan would be easier to fully fund.

In 2010, the Oklahoma Public Employees Retirement System was in a similar position to New Hampshire’s. Oklahoma’s system was only 66% funded. Legislators made two critical reforms that changed the trajectory of the system, the Reason Foundation reported. They ended future cost-of-living adjustment (COLA) benefit increases that weren’t fully funded in advance. And in 2015 they shifted new employees to a DC plan. (In addition, they kept the state contribution to both plans at 16.5%.)

The Reason Foundation’s Pension Integrity Project charted the effects of these changes to Oklahoma’s system (shared below). 

Conclusion

New Hampshire’s state pension system is a relic of a bygone era. As Oklahoma took its system from 66% funded to fully funded by making critical reforms that featured creating a DC plan for new hires, New Hampshire’s has limped along with no substantial improvement in its funded ratio. Taxpayers remain on the hook for $5.6 million in unfunded liabilities while state employees have to put in a decade of service to vest in a plan that doesn’t generate great returns. 

Creating a DC plan for new state employee hires is a financially sound way to lower state costs, stop crowding out other government programs, reduce taxpayer obligations and create a fully funded, portable retirement plan that doesn’t take a decade to vest. 

Download this policy brief here: JBC Brief DC Retirement Plans March 25

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New Hampshire ranked the freest state in North America for the 23rd year

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New Hampshire is once again the freest state both in the United States and on the North American continent, topping each index in this year’s Economic Freedom of North America report, released today by the Josiah Bartlett Center for Public Policy in conjunction with Canada’s Fraser Institute.

“Granite Staters continue to choose policies that empower people, not government. When you do that for a very long time, you wind up freer than your neighbors,” said Andrew Cline, president of the Josiah Bartlett Center for Public Policy, which partnered with the Fraser Institute in releasing the report. “In 2025, legislators have a tremendous opportunity to build on this success and liberate Granite Staters from some of the outdated policies that keep us from being even freer.”

Since the Fraser Institute began publishing its Economic Freedom of North America Index two decades ago, the Granite State has ranked No. 1 in 23 of the 26 years studied in the international freedom index. It has ranked No. 1 in 23 of the 42 years covered in the U.S. freedom index.

New Hampshire Gov. Chris Sununu said that notching another first place win shows that New Hampshire’s approach to governing works.

“The model we’ve set here in New Hampshire isn’t just the gold standard for the 50 states, it’s the envy of all North America! The New Hampshire Advantage is more than just a slogan — it’s proof that freedom stems from creating opportunity for the individual without big government,” Sununu said.

This year—the 20th year that the Economic Freedom of North America index has been published—New Hampshire is again the freest state among all U.S. states, having scored 8.12 out of 10 in this year’s report, which measures government spending, taxation, regulations and labor market restrictions using data from 2022, the most recent year of available comparable data.

“In the freest economies, individuals are allowed to make more of their own economic choices—choices concerning work, transactions with others, and owning and using productive property. As government limits these choices, people have less economic freedom and as a result they tend to be worse off,” said Matthew Mitchell, a senior fellow at the Fraser Institute and co-author of the report.

Rounding out the top five freest states are South Dakota (2nd), Florida (3rd), Tennessee (4th), and Texas (5th).

Once again, Puerto Rico came in last among U.S. jurisdictions with a score of 2.13 out of 10. The least free U.S. states were New York (50th), California (49th), Hawaii (48th), New Mexico (47th) and Vermont (46th).

Among the remaining New England states, Massachusetts ranked 28th, Connecticut 29th, Maine 38th, Rhode Island 42nd, and Vermont 46th, making New Hampshire at No. 1 the only New England state to rank in the top half of states for economic freedom.

The report also includes an all-government ranking, which adds federal government policy to the index and includes the 50 U.S. states and the territory of Puerto Rico, 32 Mexican states, and 10 Canadian provinces.

Taking into account both federal and state policies, economic freedom peaked in 2004 then declined and bottomed out in 2009. From 2009 to 2017, economic freedom in North America slowly increased, but has remained more than a quar­ter-point below its 2004 peak ever since. In fact, average economic freedom across all 93 jurisdictions in the index has fallen every year since 2017 and is now only 0.02 points above its all-time low.

And even though the U.S. remains more economically free than Canada, the gap is relatively small.

“The evidence is clear—higher levels of economic freedom are associated with more prosperity, faster economic growth, more investment, and more job opportunities,” said Dean Stansel, economist and research associate professor at Southern Methodist University and co-author of the report. According to the report, total employment grew about three times faster in the most economically free U.S. states than it did in the least free over the last decade.

The Economic Freedom of North America report is co-authored by José Torra, the head of research at the Mexico City-based Caminos de la Libertad, and Ángel Carrión-Tavárez, director of research and policy at the Instituto de Libertad Económica in Puerto Rico. It is an offshoot of the Fraser Institute’s Economic Freedom of the World index, the result of more than a quarter century of work by more than 60 scholars, including three Nobel laureates.

See the full report at https://efotw.org and fraserinstitute.org/studies/economic-freedom.

New Hampshire’s scores in key components of economic freedom (from 1 to 10 where a higher value indicates a higher level of economic freedom), from 2021 to 2022:

  • Government spending: Unchanged, at 8.84 both years
  • Taxes: changed to 7.47 from 7.18
  • Labor Market Freedom: changed to 8.34 from 7.93

Read the entire report here: us-economic-freedom-of-north-america-2024

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Populist policy solutions to empower outsiders

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In the United States and across the globe, a stark political divide has emerged not between left and right, but between outsiders and insiders.

To a large extent, the 2024 election reflects an outsider revolt against elite misuse of institutions. Analysts and writers on both the left and the right have noticed this, though they don’t always read the results the same way. 

Left-wing writer Jeet Heer of The Nation headed down the right path, even if he missed the destination, when he wrote last week:

“The key to understanding the Trump era is that the real divide in America is not between left and right but between pro-system and anti-system politics. Pro-system politics is the bipartisan consensus of establishment Democrats and Republicans: It’s the politics of NATO and other military alliances, of trade agreements, and of deference to economists (as when they say that price gouging isn’t the cause of inflation). Trump stands for no fixed ideology but rather a general thumbing of the nose at this consensus. The main fact of American politics in the post-Obama era is that an ever larger majority of Americans are angry at the status quo and open to anti-system politics.”

That’s not quite right. Voters are angry at the status quo, but they have not turned against “systems” per se. No one’s calling to abolish the Catholic Church, the International Committee of the Red Cross, professional sports leagues, the Salvation Army, Rotary International, 10-minute oil changes, community college, municipal trash collection or the International Fertilizer Development Center.

Voters have turned against elite misuse of powerful institutions, particularly government institutions, to exclude non-elites and impose elite values and decisions on others collectively.

The signs of this have been growing for years. Chapman University in California conducts a Survey of American Fears to catalogue what Americans fear most. The latest survey, from 2022, found that Americans most fear “corrupt government officials.” 

Nearly 2/3 of Americans (62%) said they were afraid or very afraid of corrupt government officials. Another 25.4% said they were slightly afraid. Only 12.5% said they had no fear of corrupt government officials. While 37% said they were very afraid of corrupt government officials, only 16% were very afraid of climate change affecting where they live. (Just 6% were afraid of zombies.) 

If Americans most fear abuse at the hands of government officials, imagine how concerned residents of the “live free or die” state must be.

Collapsing trust in elites and powerful institutions leads to populist efforts to weaken or control (or both) those institutions. 

That loss of trust is a terrible development. But new leaders can restore trust lost by previous leaders. The new governing majority in New Hampshire has a golden opportunity to begin to restore that trust.

How? The wrong way would be to use government power to lock in a different set of controls that create different sets of insiders and outsiders. Voters want to restore the principle of institutional neutrality. They want government to treat everyone equally and stop “picking winners and losers,” as the common phrase goes.

In New Hampshire, policymakers can restore trust by removing institutional rules that create insiders and outsiders where none need exist, or that erect unnecessary barriers that make it harder for outsiders to choose their own path in life.

The best opportunities to return power to individual Granite Staters come with these five steps:

  1. Reduce state and local land use and development regulations. Our 2021 study of local land use regulations showed that New Hampshire is more heavily regulated in this category than most other states. Regulations that needlessly restrict development are not only the primary cause of the state’s housing shortage, but they prevent developers from creating the kind of communities people prefer, price lower-income families out of neighborhoods and communities, worsen labor shortages, and generally replace individual preferences with choices made by small groups of insiders.
  2. Increase access to educational options. Nearly everyone agrees that a child’s zip code shouldn’t determine his or her educational opportunity. Our current public education structure locks children in to a boundary-based model that creates insiders and outsiders by its very design. Education Freedom Accounts (EFAs), universal open enrollment and charter schools eliminate that structural flaw. Curiously, news reports on Education Freedom Accounts continue to omit the fact that EFAs can be used to attend public schools. Only by empowering families to shop for an education can we generate the public education improvements parents have demanded for decades.
  3. Reduce regulatory burdens on businesses and entrepreneurs. Making it harder and more expensive to start and operate a business hurts outsiders and protects larger businesses. New Hampshire has too many state and local regulations that raise barriers to entry, increase costs and create public “protections” that no one even needs. Entrepreneurship is one of the most important paths to prosperity. In New Hampshire, starting and running a business should be easier than anywhere else on earth. Right now, we’re not even close.
  4. Roll back overly burdensome environmental regulations. Protecting land, water and air is a legitimate role of government. Doing it the wrong way is costly and counterproductive. When regulations become absurdly complicated or expensive, they suppress economic growth, which is harmful because economic growth benefits everyone. New Hampshire can streamline its permitting processes and reduce its regulatory regime in ways that will improve economic outcomes while maintaining essential protections. In this category, renewable energy mandates are entirely unnecessary and should be repealed altogether. Restrictions on building energy infrastructure also need to go.
  5. Reform occupational licensing. Gov. Sununu and the Legislature made real progress on this in the last legislative session, but much work remains. New Hampshire continues to place too many regulatory obstacles in the way of individuals who want to enter dozens of career pathways.

New Hampshire is layered with rules that replace property rights and individual autonomy with decisions made by small groups of elites. Voters have indicated a strong preference for removing such restraints.

State and local policymakers have a rare opportunity to deliver real reforms that constrain government and empower individuals, rather than the other way around. Failure to deliver such reforms would risk further alienating voters and eroding trust in government.

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Legislators distributing random numbers is no basis for sound public policy

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“This is not a world to live at random in as you do.… Everything in this world is matter of calculation.”

— Thomas Jefferson, Oct. 12, 1786

Random chance is a constant feature of life on Earth, and for centuries it was a feature of human government. Kings and councils ruled with “arbitrary power,” as John Locke phrased it, subjecting the people to the whims of man just as they had previously been subject to the whims of nature. 

Escaping the tyranny of randomness was, to Locke and the American Founders, a primary motivating factor of those who built republican governments. 

“This freedom from absolute, arbitrary power, is so necessary to, and closely joined with a man’s preservation, that he cannot part with it, but by what forfeits his preservation and life together,” Locke wrote in the Second Treatise on Government. 

By “absolute power,” Locke meant rule by whim, not by law. But the Founders feared that in a republican government majorities would write laws that codified their whims and impulses rather than the considered opinions of a broader coalition of lawmakers. Hamilton and Madison were particularly animated in warning against this.

In Federalist 9, Hamilton defined an “arbitrary” policy as that which is “supported neither by principle nor precedent.”

Laws, the Founders argued, should be the result of rational, careful consideration, not random or arbitrary decisions. And yet we see regularly, even in New Hampshire, the hasty passage of laws that codify rules chosen more or less at random rather than by principle or precedent, to use Hamilton’s metric, or calculation, to use Jefferson’s.

Some bills this session offer great examples of this illiberal practice. 

House Bill 462 would raise the cap on damages for wrongful death loss of consortium claims. HB 462 originally would have eliminated the caps on financial damages that survivors can make for loss of consortium (companionship) in the wrongful death of a loved one. Caps exist to prevent runaway jury verdicts based on emotional testimony, as there’s no standard way to measure a loved one’s companionship value in financial terms. After strong opposition from the Business and Industry Association, insurers and others, the bill was amended to raise the caps from $150,000 to $500,000 for a spouse and $50,000 to $300,000 for a child or parent. Whatever one’s emotional reaction to these numbers, they are essentially random. Adjusting for inflation since the caps were imposed in 1997, $150,000 would now be $292,000, and $50,000 would be $97,000. Other states’ caps are all over the place, indicating a general lack of consensus on what a reasonable figure would be. Rather than join other states by randomly settling on a number that sounds good to some legislators, this is a perfect example of a policy deserving of more careful study and extended deliberation. 

Senate Bill 308 would raise the state’s minimum wage from the federal $7.25 an hour to $15 an hour. Why $15 an hour? Why not $10, $20, or $17.93? The chosen number is not entirely random, as it’s the one settled upon by labor unions and national activists as sounding politically palatable. But it’s consistent with neither precedent nor principle nor rational calculation. A number chosen for political purposes is hardly a strong basis for choosing a wage floor that will eliminate job opportunities for lower-skilled Granite Staters. The overwhelming evidence from decades’ worth of national studies on minimum wage laws is that large increases that lift low-end wages above market rates eliminate employment opportunities for lower-skilled workers. New Hampshire’s own study of the impact of a $15 minimum wage found that it would make the state poorer and less populous. People shouldn’t lose job opportunities because politicians randomly picked their hourly pay rate. 

Nor should people lose their access to public records because lawmakers set an arbitrary trigger requiring payment to access those records. House Bill 1002 represents an effort to reduce public records requests by allowing government to charge for large requests. It’s gone through many variations. The latest amendment would allow government holders of public records to charge up to $1 “per electronic communication” for any records that total “in excess of 250 communications.” That is, if a records request results in a collection of more than 250 emails or text messages, government agencies can charge up to $1 per email or text for any communications after the 250 threshold is met. Multiple emails under a single subject line would count as a single communication. For the price-per-record portion of the bill, this represents an improvement over previous versions. But it still sets an arbitrary threshold at which government could charge citizens not for making copies of records, but simply for providing access to them. This line has never been crossed before. Once the line is crossed, future legislatures can reduce the arbitrary cutoff number of 250 or apply it to other types of records. Furthermore, the bill grants government blanket civil immunity for disclosing information that is not subject to public disclosure. On the whole, the amendment would tip the balance of power between citizens and government more toward government, which would weaken government accountability in New Hampshire.

Reversing randomness

Sometimes lawmakers seek to undo random or arbitrary policies that have been written into law or rule in the past. 

House Bill 1053 would forbid municipalities from banning new residential development in commercially zoned areas. Advocates of strict local zoning ordinances say they are needed to prevent commercial and industrial development from encroaching into residential neighborhoods. There is no public health or safety justification, however, for prohibiting mixed-use development in areas that already allow commercial activity. Such prohibitions are a perfect example of arbitrary power exercised democratically. Municipalities prohibit people from choosing to live above or beside stores and cafes purely for aesthetic or cultural reasons, not for legitimate public safety reasons. That’s clearly an arbitrary violation of people’s property rights.

House Bill 1281 would prohibit municipalities from banning unrelated individuals from sharing a home. Specifically, it would bar any ordinance that “restricts the number of occupants to less than 2 occupants per bedroom based upon the existence of unrelated or non-familial relationships between the occupants of such rental property.” Local officials in college towns are upset that the bill would undo ordinances that ban, say, more than three unrelated people per dwelling unit, as Durham does in some zones. Officials say that such ordinances are demanded by residents who want to control noise and disorder in their neighborhoods. But the ordinances discriminate against people based on relationship status, not behavior. Widowed senior citizens who are perfectly quiet and neighborly are barred from renting property together, or from renting to students whose behavior they could supervise. Rather than use noise and nuisance ordinances to police the illegal behavior of bad neighbors, such ordinances restrict property rights through an arbitrary cap on unrelated renters.

A certain amount of randomness is inevitable, even desirable, in life. But it shouldn’t guide policymaking. 

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Finding a win-win on public records access

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A surprising divide has arisen this year over how the state should respond to increasing volumes of public records requests. On one side, we see discord and anger. On the other, unity and progress. The split shows the value of a win-win approach to solving problems.

Many officials responsible for providing access to public records say requests for such documents have become burdensome and costly. They say that gadflies and for-profit companies are filing such large requests, with such frequency, that something must be done to reduce the burden on public employees.

Two bills in the Legislature attempt remedies. The solutions they offer are diametrically opposed. Both would lighten the work load of public employees. But how they propose to do so makes all the difference.

House Bill 1002, which we wrote about previously, proposes to solve the problem by making it harder for citizens to obtain public documents. It would allow government agencies to charge up to $25 an hour for records requests that take more than 10 hours to fulfill, with the billing kicking in after the 10th hour begins. 

House Bill 1696, as amended, takes a very different approach. The bill would make it easier for municipalities to store, and the public to retrieve, public records. It would create a system for municipalities to have their records stored at the state Division of Archives and Record Management. To manage those records, and requests for them, it would fund a Local Government Records Manager position at the archives. 

HB 1696 would create a digital repository of government records that would work like “a slightly more boring version of Netflix for public records,” New Hampshire Municipal Association Government Affairs Counsel Natch Greyes told the House Judiciary Committee in January. 

State Archivist Ashley Miller told the Judiciary Committee that the bill “streamlines our record-keeping processes statewide but it allows… for quick retrieval of information.’

She went on to say that the bill would create “a convenient digital repository where their records can be both preserved and accessible to the public.”

This version of HB 1696 was sponsored by Rep. Josh Yokela, who is well known for championing broad and easy access to public records. Yet the bill has the support of the New Hampshire Municipal Association and the director of the Division of Archives and Records Management. The House Judiciary Committee unanimously recommended its passage. Why?

Rep. Yokela offered a solution that satisfied both sides. Municipal officials received help with storing public records and fulfilling requests for them. Advocates of government transparency got a searchable, always-accessible database of public records.

By contrast, HB 1002’s win-lose approach imposed costs on open-government advocates and gave government employees a new, easily abused power. Pitting the two sides against each other led to bad feelings, acrimonious debate and reconsideration of the bill. 

HB 1696 doesn’t resolve all of the concerns public records custodians have. But it points toward constructive solutions.

Instead of discouraging records requests by punishing citizens when they ask for large batches of public documents, a win-win approach would encourage better records management practices, offer help in complying with large requests, and create a less labor-intensive process for making records available. 

Creating a better way to redact non-public portions of public documents remains a challenge. But suppressing records requests is not the solution. 

As with so many problems, the answer can be found through innovation and cooperation, not power and punishment. 

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Paying for the right to know

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All power residing originally in, and being derived from, the people, all the magistrates and officers of government are their substitutes and agents, and at all times accountable to them.  Government, therefore, should be open, accessible, accountable and responsive.  To that end, the public’s right of access to governmental proceedings and records shall not be unreasonably restricted.

— New Hampshire Constitution, Part 1, Article 8

 

Some local government officers in New Hampshire (and elsewhere) have reported being burdened by what they view as unreasonable requests for massive caches of records. 

House Bill 1002 attempts to address these complaints. It would allow public bodies to charge up to $25 an hour for the time taken to fulfill a public records request when a request lasts more than 10 hours. The fees would not apply to the first 10 hours, but would kick in at the start of the 11th hour.

In effect, the bill would tax any public record request that public officials say takes longer than 10 hours to fulfill. 

The perverse incentive created by HB 1002 is obvious. If it becomes law, public officials would have a new incentive to take as much time as possible to answer public records requests. By expanding the estimated time taken to fulfill requests, government agencies could discourage requests they view as burdensome or annoying.

Government officials who testified in favor of the bill in Concord said it was needed to discourage frivolous, harassing and financially motivated records requests. Legislators were told that out-of-state companies request data that is then monetized, and that citizens file requests just to harass government employees.

But this bill does not narrowly target those problems. It applies a fee to any request that a governing body can stretch into 10 hours worth of work. 

The inevitable effect will be to reduce government accountability by reducing public access to public records. 

A study of high records request fees published last fall in Government Information Quarterly found that “fees are particularly problematic for certain requester types, notably average citizens and those seeking records in the public interest, and that fees may therefore obstruct the public’s ability to become informed and better self-govern.”

Lawyers and companies seeking data for commercial purposes did not see high fees as an impediment to making public records requests, according to the survey.

This suggests that the approach taken by HB 1002 would reduce government oversight while doing little to discourage financially motivated documents requests.

If harassing or overly broad records requests really are a serious problem in New Hampshire (all we have are some anecdotes), legislators can devise a more narrowly tailored remedy that does not suppress legitimate records requests made in the public interest.

Fees that apply only to data sought by commercial actors for strictly commercial purposes (which would exempt news media and citizen requests) might be an option, though it’s not at all clear that such requests are so burdensome that they require a legal remedy. 

Requests made for the purpose of disrupting government work or harassing government employees should be addressed through statutes prohibiting harassment, not by imposing fees on citizens who want access to records that, after all, belong to them.

One reason public records requests can take many hours to fulfill is that government agencies often have poor records retention practices. Citizens shouldn’t be punished for disorganization in government bureaucracies. 

Providing ready access to public records is a core government function, not an add-on. Good management involves properly organizing and staffing the agencies tasked with storing, managing and producing public records. Charging people extra for the time it takes to produce poorly organized documents will do nothing to improve the organizational efficiency of government bureaucracies and might actually discourage it. 

The core conceptual flaw in HB 1002 is that it treats public records as government property and access to those records as a burden on government employees. 

In fact, public records belong to all citizens, and government employees are merely custodians of those records on behalf of their citizen owners. 

Currently, public agencies can charge for making copies of public records. That distinction is important. Copying fees are permitted because the charge is for the duplication, not for access to the record.

HB 1002 crosses an important line. It imposes a fee just for accessing the records. That upends the relationship between citizen and government. It gives government the ability to withhold public records from any citizen who can’t afford to pay. 

“A system that puts a price on it is on its face discriminatory,” Rep. Marjorie Smith said when opposing the bill a House Judiciary Committee hearing earlier this month. “It is going to, on its face, hurt people at the lowest end of the income scale. It is going to set up different classes of people as to whether or not you’re entitled to get information.”

The decline of print journalism has decimated newsrooms in New Hampshire. With fewer reporters covering local and state government, sometimes the only people providing any government oversight are citizens who watch public meetings and file public records requests. Empowering government to charge for access to those records would further shrink the already tiny level of government oversight that remains.  

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New Hampshire ranks first in Cato’s 2023 Freedom in the 50 States

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We’re No. 1!

Again!

Fresh from its No. 1 ranking in the Fraser Institute’s Economic Freedom in North America report, New Hampshire tops the 7th edition of the Cato Institute’s Freedom in the 50 States report.

“New Hampshire is once again the freest state in the Union and in 2022 set the record for the highest freedom score ever recorded in the 21st century. Governor Chris Sununu and the New Hampshire legislature have much to be proud of. In 2000, on the full index, Nevada was number one, just ahead of New Hampshire.”

The Cato report ranks states on 230 variables in the broad categories of economic freedom, personal freedom and fiscal policy.

New Hampshire excels in taxation and government spending. “The state government taxes less than any other state but Alaska,” the report concludes. The state scores well on rankings of government debt, government consumption and government employment.

Although New Hampshire fares well in many categories, our regulatory burden “is a blemish on such an otherwise free state,” the authors write.

Not surprisingly, “the Granite State’s primary sin is exclusionary zoning.” On local land use regulations, “New Hampshire is among the most regulated states.”

The report also dings New Hampshire for not having a right-to-work law or universal school choice, and for imposing a renewable portfolio standard that raises the cost of energy.

Florida, which ranks second in both the Cato and Fraser Institute reports, has improved its position dramatically in the last two decades. The Sunshine state has both a right-to-work law and universal school choice.

New Hampshire has stood atop the Cato rankings since 2011, and the state’s latest score is the highest in the history of the report, which began in 2000. Among the reasons for our high ranking this year was our relatively less burdensome approach to the COVID-19 pandemic. New Hampshire ranked 9th on COVID policies, which is a testament to how badly most states reacted to the pandemic.

But at a Freedom in the 50 States event in Manchester on Thursday, Gov. Chris Sununu and report authors Will Ruger and Jason Sorens all warned against New Hampshire resting on its laurels. The state and local governments still impose many unnecessary constraints on both personal and economic freedom. As long as those restrictions remain, they will continue to be a drag on the economy and give other states opportunities to dethrone New Hampshire from its position as America’s freest state, they said.

 

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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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