Eliminating coal is a gas, gas, gas

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On Tuesday, a few protesters dumped a few buckets of coal at the State House. It was, they said, a bold act of civil disobedience because they stole the coal from the Merrimack Station power plant in Bow. Yes, they admitted this. They even helpfully provided the Bow Police with evidence by posting an incriminating photo on their own website.

Activists organized by the Climate Disobedience Center routinely commit crimes against fossil fuel infrastructure. They theorize that a rapidly arriving climate catastrophe justifies the criminality. The Tuesday publicity stunt was orchestrated to pressure the state to shut down the coal-burning Merrimack Station.

’60s-style protesting is a gas, as they said back then. But sometimes logic and clear thinking get lost in all the excitement of “sticking it to the man.” Inconvenient truths are hard to see when blinded by self-righteousness. Among them: these activists have helped prolong the life of Merrimack Station and increase the number of days it operates.

Merrimack Station is no longer in daily use because fracked natural gas is cheaper to burn than coal. The station remains online only as a backup generator for when the region’s natural gas plants can’t meet demand, primarily during winter and summer spikes.

The station is most needed during periods of peak demand, and New England’s peak electricity demand comes in… August. Last year’s heaviest day of electricity use was August 29. Activists demanded the closure of New Hampshire’s most important backup power plant right when it is most needed to prevent blackouts. Genius.

Environmental activists demand that the coal plant be shuttered and replaced with renewable energy. But wind and solar cannot fill this spot need because they are not on-demand power sources. They generate power when nature dictates, not when humans flip a switch.

Ironically, coal remains a go-to backup power source in large part because activists have succeeded in restricting New England’s supply of the cleaner, cheaper fuel that has nearly displaced coal entirely: natural gas.

Huge supplies of cheap natural gas produced by fracking dramatically dropped the price of electricity in New England in the last decade, dropping coal to just 1 percent of the region’s energy generation.

“The high efficiency of natural-gas-fired generators and the generally low cost of nearby domestic shale gas (which emerged as a resource in 2008) are largely responsible for a 46% decrease in the average annual price of New England’s wholesale electricity over the past 10 years,” ISO New England, the region’s non-profit electric grid operator, wrote in this year’s Annual Energy Outlook. “Lower wholesale prices translate into lower power-supply charges for consumers.”

Abundant, cheap natural gas was the single biggest factor in the almost complete collapse of coal use in New England.

“Since 2000, electricity generation from coal has declined and the contribution from natural gas has increased markedly, primarily because two large natural gas-fired power plants came online in 2002 and 2003,” the U.S. Energy Information Administration has concluded. “However, as increasing amounts of natural gas are used to generate electricity, in New Hampshire and in New England as a whole, assurance of natural gas supply has become a critical energy issue for the region.28“

Critically, the EIA notes that after years of decline, coal use in New Hampshire has been trending upward as natural gas use has fallen.

“New Hampshire’s natural gas-fired generation has declined in the past three years and now is at its lowest level since 2002. The decrease has been compensated for primarily by increases in coal-fired generation and hydroelectric power.29”

In other words, we were on the verge of eliminating coal as a fuel source when a decline in natural gas generation caused a turn back to coal to fill the gaps.

Much of the credit for this goes to climate activists who have helped to block natural gas pipeline and import terminal construction. By slowing the construction of new natural gas infrastructure, activists from the Climate Disobedience Center and other groups forced electricity generators to turn to coal to meet demand on peak days.

Climate Disobedience Center activists have boasted about protesting, among others, the expansion of the Algonquin Pipeline, which would bring additional natural gas supplies into New England, further reducing the region’s dependence on dirtier-burning coal and fuel oil.

A few years ago, ISO New England commissioned a study of natural gas capacity. It projected that inadequate pipeline capacity would lead to gas shortages on 24-34 days per winter by the winter of 2019-20.

Days like those are when Merrimack Station is fired up.

The quickest way to close Merrimack Station is not to protest its operation. The quickest way is to stop blocking the pipelines that would supply New England with enough natural gas to replace coal permanently.

(Photo credit: Si Wilson, Flickr)

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How N.H. could save millions in drug costs with an online auction

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On Thursday, a coalition worthy of a wacky ensemble buddy comedy pressed the state not for a subsidy or a handout, but for something much more valuable. Labor unions, business leaders and mayors asked the state to use market forces to lower prescription drug prices.

The state hires a business called a pharmacy benefits manager (PBM) to handle its prescription drug purchases. PBMs negotiate with drug makers to determine what drugs are covered under insurance plans and at what price. Their formulas are complex and opaque, which has made them a ripe political target in recent years.

PBMs can reduce an employer’s or insurer’s prescription drug expenditures by negotiating volume discounts and managing efficiently a large volume of complex drug transactions. But an increasing number of studies (some summarized here) are finding that bad incentives and a lack of price transparency make it hard for customers to produce greater efficiencies and greater savings. 

The answer is to change the incentives in ways that empower purchasers, not sellers and contractors. 

New Hampshire hires its PBM by putting out a request for proposals and having a group of reviewers pick the best one. Last year it used this process to sign a three-year, $212.4 million contract with Express Scripts, one of the nation’s dominant PBMs. 

But there is a better way. Corporations and the federal government have for years employed an online reverse auction to force contractors to bid aggressively to win their business. It works sort of like eBay, but in reverse. The buyer starts the auction, and contractors place their bids. The auction then cycles through multiple rounds, with contractors having the chance in each new round to outbid each other. 

  • MIT marketing professor Sandy Jap found that online reverse auctions “not only save buyers money but also can increase the competitiveness of the supply base. Suppliers that participate in open-bid auctions are able to benchmark competitors and their cost structures, which can lead to greater efficiency for all suppliers.”
  • University of North Texas professors also found in 2004 that online reverse auctions “A large number of studies have demonstrated that ORAs not only improve the buyer’s purchasing efficiency, but also reduce its overall procurement costs” and that sellers “also benefit from new business opportunities to increase their sales.”
  • A 2011 study found that they drive prices down, create efficiencies, save time, produce real-time market pricing, and increase competition. 
  • A GAO report found that they may have saved federal agencies more than $100 million in 2016 alone. 

New Hampshire has the potential to save tens of millions of dollars by creating an online reverse auction process for awarding its new PBM contract next year. 

That’s what the wacky coalition on Thursday pressed the state to do. Public-sector unions and local elected officials correctly see the potential to lower their own drug costs too.

Prescription drug prices continue to rise because our complex web of laws and regulations prevents the creation of competitive marketplaces in which consumers can comparison shop. 

An online reverse auction takes a step in the right direction by employing market forces — not heavy-handed regulations — to reduce state prescription drug expenditures for the state and its employees.

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To fix health care, look to Milton Friedman, not Bernie Sanders

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Following the lead of a self-proclaimed socialist, on Tuesday and Wednesday the top Democratic candidates competing to lead the world’s most successful capitalist country diagnosed the source of America’s health care ills to be… capitalism.

  • Bernie Sanders: “…the health care industry makes tens of billions of dollars in profit…. If you want stability in the health care system, if you want a system which gives you freedom of choice with regard to a doctor or a hospital, which is a system which will not bankrupt you, the answer is to get rid of the profiteering of the drug companies…”
  • Elizabeth Warren: ““The basic profit model of an insurance company is taking as much money as you can in premiums and pay out as little as possible in health care coverage. That is not working for Americans…”
  • Kamala Harris: “Let’s talk about math. Let’s talk about the fact that the pharmaceutical companies and the insurance companies last year alone profited $72 billion, and that is on the backs of American families.”
  • Tulsi Gabbard: “So the core of this problem is the fact that big insurance companies and big pharmaceutical companies who’ve been profiting off the backs of sick people have had a seat at the table, writing this legislation.”
  • Kirsten Gillibrand: “The truth about health care in America today is people can’t afford it. They cannot afford — and the insurance companies for these plans that rely on insurance companies, I’m sorry, they’re for-profit companies. They have an obligation to their shareholders. They pay their CEO millions of dollars. They have to have quarterly profits. They have fat in the system that’s real and it should be going to health care.”
  • Julian Castro: “What I don’t believe is that the profit motive of big pharma or big insurance companies should ever determine, in our great nation, whether somebody gets healthcare or not.”
  • Bill de Blasio: “Yeah, I don’t understand why Democrats on this stage are fearmongering about universal health care. It makes no sense. Ask the American people, they are sick of what the pharmaceutical companies are doing to them.”

The Democratic Party is following the wrong Brooklyn-born Jewish immigrant. 

Tooting “The Internationale” on his pipe, Bernie Sanders is leading the Democratic Party down the dark path toward state control of the economy. His anti-capitalism rantings have shifted the party’s base far to the left. He led the health care debate on Tuesday, and on Wednesday Elizabeth Warren and others danced to his seductive tune.

Wednesday, as it happened, was the birthday of Milton Friedman, “the 20th century’s most prominent advocate of free markets.” Born in Brooklyn 29 years before Bernie Sanders, the Nobel laureate economist became famous for explaining to popular audiences how free markets combat poverty and empower the powerless, as he did here on Phil Donahue’s show.

Sanders’ progressive push for a government-run health care system is based entirely on the notion that health care and health insurance in the United States are controlled by for-profit companies preying upon citizens in an unrestrained free market. It’s an interesting theory, considering that exactly the opposite is not only true but demonstrably true. 

The United States does not have a free-market health care system. In a free market, a seller cannot raise prices with impunity. The existence of price signals and competition would allow consumers to choose alternatives, keeping prices down and service quality high. 

In health care in the United States, the government prevents this from happening. Because of a terrible tax incentive, consumers are locked into health insurance plans chosen by their employers. Those insurers negotiate prices with providers, and consumers have little say in that process. Additional laws prevent consumers from purchasing the lowest-cost insurance plans, instead forcing insurers to pay for routine health expenses and all manner of services that not everyone needs.   

In a classic essay written five years before his death, Friedman identified the structural problems with health care delivery in the United States. 

“Two simple observations are key to explaining both the high level of spending on medical care and the dissatisfaction with that spending,” Friedman wrote. “The first is that most payments to physicians or hospitals or other caregivers for medical care are made not by the patient but by a third party—an insurance company or employer or governmental body. The second is that nobody spends somebody else’s money as wisely or as frugally as he spends his own.”

“No third party is involved when we shop at a supermarket. We pay the supermarket clerk directly: the same for gasoline for our car, clothes for our back, and so on down the line. Why, by contrast, are most medical payments made by third parties? The answer for the United States begins with the fact that medical care expenditures are exempt from the income tax if, and only if, medical care is provided by the employer. If an employee pays directly for medical care, the expenditure comes out of the employee’s after-tax income. If the employer pays for the employee’s medical care, the expenditure is treated as a tax-deductible expense for the employer and is not included as part of the employee’s income subject to income tax. That strong incentive explains why most consumers get their medical care through their employers or their spouses’ or their parents’ employer. In the next place, the enactment of Medicare and Medicaid in 1965 made the government a third-party payer for persons and medical care covered by those measures.”

Is the raw greed of insurers and for-profit health care providers to blame for skyrocketing health care costs?

“A look at the data is instructive. The effect of tax exemption and the enactment of Medicare and Medicaid on rising medical costs from 1946 to now is clear. According to my estimates, the two together accounted for nearly 60 percent of the total increase in cost. Tax exemption alone accounted for one-third of the increase in cost; Medicare and Medicaid, one-quarter.”

Market-distorting government interventions — not greedy corporations — are the real drivers of health care and insurance costs in the United States, where about half of health care spending comes from government. 

“The high cost and inequitable character of our medical care system are the direct result of our steady movement toward reliance on third-party payment. A cure requires reversing course, reprivatizing medical care by eliminating most third-party payment, and restoring the role of insurance to providing protection against major medical catastrophes,” Friedman concluded.

That is the answer because removing those distortions is the only way to create largely efficient, functioning consumer markets in health care that empower consumers. 

That doesn’t require eliminating all regulations. We have functioning food and clothing markets that are subject to some level of regulation. It requires undoing the laws and regulations that deny consumers the ability to shop for health insurance and health care in a competitive marketplace.    

Friedman understood this and explained it well. But one party is choosing to follow Sanders and his nonsensical rantings instead. Maybe Friedman should’ve spent more time waving his arms and yelling.

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Five ways a $15 minimum wage would be bad for New Hampshire

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The U.S. House on July 18 passed the “Raise the Wage Act,” mandating a $15 minimum wage (a 107% increase) by 2025. The bill also eliminates the exemption for tipped employees, forcing a 562% increase in wait staff labor costs by 2026. New Hampshire’s U.S. Reps. Chris Pappas and Annie Kuster voted for the bill. (Pappas’ own restaurant hires experienced employees for less than $15 an hour.) Below are five ways a $15 minimum wage would hurt New Hampshire. 

  1. It would reduce job opportunities for Granite Staters. Extensive research has shown that minimum wage increases disproportionately hurt the lowest-skilled Americans by eliminating low-skill jobs. Roughly 163,000 Granite Staters work at jobs that pay less than $15 an hour, according to state Employment Security data. About 11,000 of them earn the minimum wage. Those in the lowest-paid jobs would see the biggest job losses. For example, federal Bureau of Labor Statistics data show that the average wage in New Hampshire for ushers, lobby attendants and ticket takers is $9.43 an hour. These are entry-level jobs for high school students. Forcing employers to raise the hourly rate by 60 percent would prompt theater owners to accelerate the transition to automated ticket kiosks. 
  1. It would pressure local governments to raise property taxes. New Hampshire municipalities and school districts pay less than $15 an hour for many positions. A few job openings posted this July include: Department of Public Works laborer, Manchester, $13.25 an hour; lifeguard, City of Claremont, $7.25-$15 an hour; library page, Nashua, $10.08 an hour; lunch/recess assistant, North Salem Elementary School, $12.21 an hour. In fiscal year 2018, Manchester Public Schools spent $10.7 million in salary for paraprofessionals, tutors, certified instructors, food service workers and support staff. Mandating a $15 minimum wage for all government employees will force a large increase in government labor costs, which will lead to budget cuts elsewhere, job losses, tax increases or all three. 
  1. It would reduce entrepreneurship. New Hampshire’s business-friendly economic climate is less friendly for startups, according to several national measurements. The latest Kaufmann State Report on Early Stage Entrepreneurship ranks New Hampshire below its neighbors and the national average on three of four metrics: rate of new entrepreneurs, early stage job creation, and startup early survival rate. WalletHub just ranked New Hampshire 48th in Best & Worst States to Start A New Business. Would-be entrepreneurs calculate anticipated profits before deciding to risk their capital on a new venture. Artificially inflating labor costs for the lowest-skilled, least-productive employees by more than 50% would make that math even more challenging, resulting in fewer new businesses — and fewer new jobs.
  1. It would make native businesses less competitive. A quaint, New England inn cannot transfer profits from the industrial manufacturing division to make up for government-mandated losses in the bed and breakfast division. Where small, local businesses compete against corporate rivals (the hospitality industry, manufacturing, retail), a $15 minimum wage would advantage national firms, which can better absorb these costs.    
  1. It would make New Hampshire less competitive. Employers can locate anywhere in the world. They tend to prefer places that have a large talent pool, low costs, high quality of life, and a favorable business climate. New Hampshire is highly competitive on quality of life and general business climate. Though energy costs are extremely high here, lower labor costs help us compete against Massachusetts, where the average wage is $5 per hour higher, according to BLS data. Artificially inflating labor costs reduces the incentive for employers to locate in more remote areas.  
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Capitalism vs. Socialism

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During this presidential primary season, Granite Staters will hear a lot of talk about the supposed benefits of socialism vs. the alleged failures of capitalism. This excellent, brief video from Prager University offers a good primer on the subject. It explains well the philosophical mistakes made in the assumption that socialism is morally superior to capitalism.

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The scalping of Gordon MacDonald and the demise of an honorable culture

“But, it is impossible for us to be blind to the facts which are daily transpiring before us. It is impossible for us not to perceive that party spirit and future elevation mix more or less in all our affairs, in all our deliberations. 

— Henry Clay, Feb. 5, 1850

 

The Executive Council’s 3-2 party-line rejection of Attorney General Gordon MacDonald’s nomination to become chief justice of the state Supreme Court marked a cultural turning point for New Hampshire. 

In 2017, MacDonald sailed through his Attorney General confirmation. “He’s someone I’ve met through (legal) practice, WMUR-TV reported a member of the Executive Council as saying. “I’ve generally thought him to be a sophisticated, thoughtful lawyer, which is what I want in an attorney general. He’s never been known to have any ethical issues.”

This week, a councilor condemned MacDonald as having been associated with politicians who have “shockingly extreme views.” 

Both comments were uttered by the same councilor, Concord Democrat Andru Volinsky.

Thus Volinsky, a convention delegate for Bernie Sanders, a self-described socialist who would abolish all private health insurance, labeled as a radical extremist a convention delegate for… Marco Rubio. 

For context, the “ideology score” matrix run by the website govtrack.us puts Rubio slightly to the right of center among Republican senators. Bernie Sanders resides all alone on the extreme far left of not just the Democratic Party, but of the entire U.S. Senate. There the Sanders supporter stands, pointing back toward the middle and shouting, “extremist!” 

In his hearing, MacDonald said repeatedly that as chief justice he must not be guided by his personal views, which he never disclosed and which no one had been able to define. He would be guided only by the rule of law, he said. 

Volinsky dismissed that standard phrase as a “talisman” used by dishonest partisans to hide their true, radical agendas.

“But the talisman no longer works because we live in the age of Donald Trump and Mitch McConnell, of Neil Gorsuch and Brett Kavanaugh, and of the legislatures in Alabama, Georgia, Missouri and Utah — all of which are committed to overturning the rule of law,” Volinsky wrote in a column explaining his vote.

With that, MacDonald was marked as dishonest, unethical, and a threat to the rule of law itself by the very government official who had previously called him a “sophisticated, thoughtful lawyer.”

Incidentally, last week, Volinsky announced he had formed an exploratory committee to run for governor. 

As for shocking extremism, an analysis by FiveThirtyEight found that U.S. Supreme Court Justice Kavanaugh has voted with fellow Trump appointee Gorsuch 70.3 percent of the time. He’s voted with Barack Obama appointee Elena Kagan… 70.3 percent of the time. What a strange record for someone “committed to overturning the rule of law.”

“I’ve known Gordon for 22 years, and the idea that he’s ‘an extremist’ or ‘shocking’ is mind-numbingly crazy,” Scott O’Connell, a Democrat and attorney at Nixon-Peabody, told NHJournal after the vote. “It’s unfounded, and it’s bulls**t.

“Gordon has a 30-year track record of outstanding service and now they think he’s been, what, a closet right-winger the entire time? It’s ridiculous. He’s set a record of exemplary behavior, so they have to go back 30 years to find an excuse to vote against him,” O’Connell said. “It’s just guilt by association.”

The associations with alleged shocking extremists were made again and again. MacDonald once worked for U.S. Sen. Gordon Humphrey decades ago. He was a Rubio delegate in 2016. He formerly served on the board of the Josiah Bartlett Center for Public Policy. Horrifying.

Gordon Humphrey, always a party outsider, left the GOP after Trump’s election and endorsed Democrat Chris Pappas for Congress last year. The Bartlett Center board has included such noted shocking extremists as moderate Republican attorney Brad Cook and income tax-supporting former Gov. Walter Peterson. Peterson chaired the Bartlett Center’s board.

Not a single personal or political view of MacDonald’s was discerned by the discussion of these associations. But discovering his views was never the point.  

In legal circles, it’s understood that political and legal views are not synonymous. That truth has guided past judicial nominations. No longer. 

This is why so many lawyers of both parties have expressed anger at the vote. New Hampshire’s state courts have been a refuge in the weed-like spread of politics into all areas of life. Once the courts become conquered territory, the merits of judicial nominees will be determined by party label rather than legal ability. That is a threat not just to the impartiality of the courts, but to the credibility of the entire legal system.

As former chief justice and head of UNH Law John Broderick said, “These appointments have never been viewed through a political prism and once we start doing that – assume that because once you were an active Democrat or once you were an active Republican and so you will automatically rule a certain way – we are going down an avenue we ought to not head down.”

Broderick was New Hampshire co-chair of Bill Clinton’s New Hampshire campaign before his elevation to the Supreme Court. 

Before the vote, dozens of lawyers of both parties emerged to push back against this. Democratic attorney and Beto O’Rourke supporter Jay Surdukowski helped lead the charge against politicizing the confirmation vote. Lending their support were 100 lawyers, including past Supreme Court justices, Democratic Gov. John Lynch’s legal counsel, and the director of the Rudman Center for Justice at UNH Law School. Others, including Broderick, traveled to testify in person on MacDonald’s behalf.

None of it mattered. The bipartisan effort to keep politics out of MacDonald’s confirmation was the last futile gesture of a crumbling culture, once held dear, in which honor and equity were cherished above party and power. 

That culture has been conquered. Every inch of public ground has been converted to a political battlefield. No neutral territory remains. 

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A $15 minimum wage would put the population of N.H. out of work

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Raising the federal minimum wage to $15 an hour would put approximately 1.3 million Americans out of work, the Congressional Budget Office concluded in a study released Monday. For perspective, that’s the equivalent of the entire population of New Hampshire. 

The CBO found that a $15 minimum wage likely would

  • “Boost workers’ earnings through higher wages, though some of those higher earnings would be offset by higher rates of joblessness;
  • “Reduce business income and raise prices as higher labor costs were absorbed by business owners and then passed on to consumers; and
  • “Reduce the nation’s output slightly through the reduction in employment and a corresponding decline in the nation’s stock of capital (such as buildings, machines, and technologies).
  • “On the basis of those effects and CBO’s estimate of the median effect on employment, the $15 option would reduce total real (inflation-adjusted) family income in 2025 by $9 billion, or 0.1 percent.”

Those are the mid-range effects in the CBO’s analysis. The $15 minimum wage could cost as many as 3.7 million jobs, the study concluded. That’s more than the population of Connecticut. 

New Hampshire legislators recently passed a bill to mandate a $12 minimum wage by 2022. The CBO study found similar but smaller effects for a $12 minimum wage. Job losses in the median range would reach around 300,000, or the equivalent of the entire population of Rockingham County. 

“Like the $15 option, this option would boost wages, but it would also increase joblessness, reduce business income, raise prices, and lower total output in the economy,” the CBO wrote of the $12 minimum wage. “On balance, real family income in 2025 would fall by $1 billion, or less than 0.05 percent.”

Advocates of a higher minimum wage have challenged Gov. Chris Sununu to live on the $7.25 minimum wage for a week. But people earning the minimum wage are not typically heads of household. They tend to be young, single, and working part-time. It is an entry-level wage meant to give unskilled employees opportunities to enter the labor market and gain skills.

Artificially inflating entry-level wages prices the lowest-skilled workers out of the labor market, as the CBO analysis shows. A high minimum wage is, in effect, a subsidy for skilled workers that comes at the expense of unskilled workers.

Given a the effects a high minimum wage would have on employment, the better challenge is for activists to live for a week on zero dollars. That’s how much someone earns when his or her job opportunities are eliminated by an arbitrary, government-decreed wage floor. 

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To keep government in check, subscribe to a newspaper

Note: This column was first published in the New Hampshire Union Leader July 5, 2019.

By Andrew Cline

Reading through the state budget passed and vetoed last week, I was struck by how many provisions had gone either unreported or lightly reported. The people’s elected representatives had just passed a $13 billion budget, and the people, excepting a handful of insiders, had little idea what was in it.

For example, the budget:

  • raised the tobacco-purchase age from 18 to 21 and changed the tobacco tax to a nicotine tax so the state could legally tax e-cigarettes (which sometimes contain nicotine but never tobacco); 
  • repealed the state law prohibiting state funding for abortions; 
  • raised this year’s business tax rates and applied the higher rates to taxes already paid this year, effectively imposing a retroactive tax increase on New Hampshire businesses.

It isn’t just the budget. Whole portions of the legislative session passed in relative darkness. 

In the last year, the Josiah Bartlett Center for Public Policy’s email newsletter has broken several political news stories. There was no media conspiracy to hide the news. Too often, there simply was no media. 

In some newsworthy committee meetings, the Bartlett Center had the only non-lobbyist with a pen and a publication there. Other times, we were the only ones questioning government officials about stories that weren’t the biggest topics of the week.

Our government watchdogs have been forced by collapsing profits to lay off the reporters who once kept the public informed. In their absence, the public knows not what transpires in its own state capital.

At the turn of this century, the press room at the State House was full, with several organizations sending multiple reporters. Even smaller papers like Foster’s Daily Democrat had a capital reporter. 

If you sent the press room a dozen doughnuts today, reporters would fight over who got to take home the leftovers. 

With so few journalists, legislators are doing their business with minimum scrutiny. The biggest issues get covered, but thinly compared to the past, and many issues go unreported. 

It’s worse in cities and towns. Reporters, once commonly seen sitting in the back rows of public meetings or roaming the halls of town offices, have gone the way of the shoe shine boy.  

The results are self-evident. Governing magazine reported in 2015 that dwindling media coverage of state government led to more pack reporting (reporters covering the same big stories the same way) and more click-driven reporting. 

Recent studies show that less media scrutiny leads to higher government spending. In a 2018 study, professors at the University of Notre Dame and the University of Illinois at Chicago looked at 1,596 newspapers in 1,266 counties from 1996 to 2015. They found that municipal borrowing costs increased in communities that lost newspapers. 

“You can actually see the financial consequences that have to be borne by local citizens as a result of newspaper closures,” a co-author said. 

A similar study in Japan found that an increase in newspaper market share was associated with a drop in public works spending. 

Other studies have tied newspaper losses to reductions in voter participation and civic engagement. Wallet Hub just ranked New Hampshire the most patriotic state, with civic participation being a top factor. If we abandon local journalism, we should expect that ranking to fall. 

More journalists make government more accountable and citizens more engaged. Some conservative readers might counter, “But not if all the journalists are liberal!” 

Media bias is a problem, but ending bias by killing newspapers is like ending Pledge of Allegiance protests by abolishing the NFL. 

It’s better to have an active news media, even biased, than to have no one keeping an eye on government.

Don’t take my word for it. Ask our Founding Fathers. 

During the American Revolution, reliable information was scarce and enormously valuable. In New Hampshire, patriot leaders constantly encouraged each other to read the newspapers. Letters from New Hampshire’s three signers of the Declaration of Independence include the following: 

Josiah Bartlett to John Langdon, Sept. 30, 1776: “There is no news here, more than you will see in the publick prints.”

William Whipple to John Langdon, July 8, 1776: “I must refer you to the papers for news.…”

Matthew Thornton to Meshech Weare, Nov. 12, 1776: “For better and further information and news, I must refer you to the newspapers, and you won’ t find more falsehood in them than is passing through this city.”

William Whipple to John Langdon, June 10, 1776: “Colonel Bartlett sends you newspapers.”

Citizens cannot check government power if they abandon the organizations that expose what government is doing. This Independence Day weekend, commit a radical act of American patriotism. Subscribe to your local newspaper.

Andrew Cline is president of the Josiah Bartlett Center for Public Policy, New Hampshire’s free-market think tank.  

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Five secrets of the Legislature’s 2020-21 state budget

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State budgets are like the Grinch’s Santa sack. They’re huge, unwieldy, and overstuffed with giveaways and surprises. Their contents are a mystery to anyone who doesn’t have hours to crawl inside and unwrap every little package, which is pretty much every normal person. 

We’re not normal (we like reading budgets), so we’ve done the unpacking for you.

Here are five interesting things we’ve found in the Legislature’s budget that have been overlooked or underreported in the news.

  1. The budget imposes immediate business tax increases. We’ve written about this before, but news reports continue to get it wrong. The budget does not merely repeal rate cuts scheduled to take place two years from now. It also raises this year’s Business Profits Tax and Business Enterprise Tax rates by 2.6% an 12.5% respectively. We have more on the budget’s tax increases here.
  1. Budget writers created a dangerous structural budget deficit. Legislators shifted much of the current budget surplus into the 2020-21 budget, then spent that one-time money on recurring line items. As a result, expenditures for fiscal years 20-21 exceed revenues by $134 million. That creates a hole in the ongoing budget that future legislators will have to fill. We have more on that here.
  1. From this fiscal year through the end of 2021, the budget spends almost $500 million more than Gov. Chris Sununu proposed spending. You can see our outline of the differences here.  
  1. The budget eliminates the existing prohibition on spending state taxpayer money on abortions. This repeal is located in House Bill 2 on Page 142, line 294, which states that the 2017 session law “prohibiting reproductive health facilities from using state funds to provide abortion services, is repealed.” 
  1. The budget moves occupational licensing revenue into the General Fund. When a barber, tattoo artist, nurse or other applicant for a state license pays the required fee, the money is kept in a segregated “office of professional licensure and certification fund.” That fund is to be used only to finance the state’s licensing regime. The budget changes the law to require that any licensing funds left in the account at the end of each fiscal year be moved to the General Fund. This would lend support to any licensed professional’s complaint that state fees are too high.

These are only a few of the newsworthy items we found that have received little or no media coverage. We’ve found more, which we will share in future posts.

If you want to do your own digging through the dark, cavernous goodie bag, knock yourself out. You can read HB 2, the budget “trailer bill” that contains the legal changes, here. 

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Dispelling myths about business taxes and the Legislature’s 2020-2021 budget

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Some supporters of the Legislature’s 2020-2021 budget are making inaccurate claims about its business tax provisions.

1. They claim that the budget’s tax increases apply only to rate reductions that are scheduled to take place in the future, and not to current-year tax rates.

2. They claim that the existing business tax rates and the lower rates scheduled to take effect in 2021 are tax cuts for “out-of-state corporations.” This brief shows how those claims are incorrect. 

Read our brief here: Bartlett Brief 20-21 Budget Biz Taxes.

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