If you planned to start a new enterprise and hire someone to run it, you’d probably avoid applicants who racked up disastrous safety records and massive financial deficits on their way to being investigated and placed under remedial safety orders by the feds.

The New Hampshire Department of Transportation, though, has tapped an operator with all of those problems to run its planned Manchester-Boston commuter rail line.

Despite steep declines in commuter rail ridership, the rise of remote work and the promise of driverless cars, the state is still moving forward with plans to build a commuter rail line to Boston. (The state in 2020 approved $5.4 million in federal funds to plan the line.) Those plans name the Massachusetts Bay Transit Authority (MBTA) as the operator of the service.

Sure, the MBTA has decades of experience running commuter rail. But then, the U.S. Postal Service has decades of experience delivering mail, too. 

A quick (and not comprehensive) review of the MBTA’s recent troubles should be enough to eliminate the agency as a suitable commuter rail partner for New Hampshire. A list of just some of the recent safety issues includes:

Years of poor management and questionable spending priorities have left the MBTA with inadequately trained staff, decaying infrastructure, and antiquated management systems. 

The FTA’s investigation found, to cite one example, that the authority uses a paper-based record-keeping system and has not yet transitioned to storing its records digitally. This is in 2022. 

The justification for building a costly commuter rail line from Boston into New Hampshire is evaporating rapidly, as we’ve documented here and here. 

But even if one could build a case for some scaled-down version of commuter rail, the case for letting the MBTA run it is nonexistent. 

No organization with such a dismal performance record should be given additional responsibilities, much less trusted with the lives of Granite State commuters. 

New Hampshire has the top two hottest housing markets in the country, as rated by real estate search website realtor.com. These ratings should be taken with a grain of salt, as they’re based in part on search queries on a single listings website. But even if the rankings are an accurate representation of the market, that’s not really great news for Granite Staters, as it’s further confirmation that the state suffers from a severe housing shortage.

Having the “hottest housing market” based on realtor.com‘s system doesn’t mean your community is the most desirable in the country. It’s a proxy to measure the intensity of the housing market. Demand is just one side of the coin. Supply is the other, and that’s a big reason why New Hampshire has claimed the top two spots on the list. 

The demand side of the realtor.com rankings is based on unique viewers per property on that website only (which is a serious limitation). Concord tops the list at 3.2 views per property. Manchester is second at 2.6. 

The proxy for the supply side of the ranking is based on how long homes stay on the market. Median time spent on the market in Concord is 13 days, according to the site. For Manchester it’s 12 days. 

Rochester, N.Y., has a median time on the market of 12 days, making it the only other community in the site’s list of top 20 hottest markets that is close to the Concord and Manchester numbers.

Such a short time spent on the market indicates not just high demand, but an extremely low supply. A balanced market is considered one that has at least six months of inventory. It would take less than a month to sell every home on the market in New Hampshire, according to the New Hampshire Housing Finance Authority.

The realtor.com ranking shows Concord and Manchester to be in the top four communities for price, behind two other New England metropolitan areas. That’s another sign that our supply is extremely low.

The top median listing prices were Portland, Maine, at $549,000, Burlington, Vt., at $484,000, Manchester at $478,000, and Concord at $457,000. 

Concord and Manchester had higher median asking prices than Worcester, Mass., Springfield, Mass., Hartford, Conn., and New Haven, Conn. 

A housing growth map published this week by Axios helps illustrate the underlying supply problem. It shows the percent change in housing units from last July to this July, by county.

Only three counties in New England experienced at least a 1% increase in housing units in the last year. Grafton County was the only one in the Granite State.  

The New Hampshire Housing Finance Authority’s annual Housing Market report, released last month, again noted that it “would take at least 20,000 housing units to achieve a balanced market” in the state.

New Hampshire is indeed a highly desirable place to live. The combination of remote work and the pandemic have boosted demand for homes in the Granite State. With remote work now a permanent and growing feature of white collar employment, and blue state refugees seeking low-tax jurisdictions from which to live and work, demand for homes in New Hampshire is likely to remain elevated for years. 

But it’s important for policymakers and voters to understand that this is not the cause of New Hampshire’s housing shortage or high prices. Housing prices in the state have risen steadily since 2012. The recent bump in demand just adds to the previously existing imbalance. 

New Hampshire was in a housing shortage long before the pandemic. That shortage will remain, as will the resulting high prices, until supply is increased enough to balance demand. 

Being labeled home to the nation’s “hottest housing market” would be nice if that term measured demand only. In reality, it’s further confirmation that we don’t have enough housing.

When inflation comes for your property tax bill, will your local officials be prepared?

Greed is the real cause of inflation, according to the President of the United States, progressive senators and left-wing activists. 

You, simple American selling driftwood sculptures on the roadside to cover gas money, are merely the victim of corporations who greedily raise prices so they can pocket record profits. 

So when rising prices hit local governments, which are entirely altruistic and never motivated by a desire to spend other people’s money, they’ll absorb the costs and not raise taxes, right? 

Rising costs have already hit New Hampshire municipalities hard, WMUR has reported.

Governing magazine reported in April that “state and local governments are having to contend with a range of fiscal challenges. Inflation is at a 40-year high, meaning the cost of capital projects and even routine service delivery is going up. The tight labor market means governments are having to increase salaries, which in turn puts upward pressures on pension costs. Already, rising interest rates are limiting the success of governments in issuing taxable bonds.”

And then there are the self-inflicted cost increases. Manchester has approved a $15 minimum wage for full-time, hourly city employees, and the city Board of School Committee is mulling one for the schools as well. 

These wage hikes were initiated not to keep up with market pay rates, but as part of the “living wage” movement. 

Raising pay to at least $15 an hour, even if qualified people are willing to do the same work for less, is held to be a moral imperative.

The real moral imperative, however, is to spend taxpayer money efficiently and effectively. Paying more than necessary for goods and services is not an obligation of government; it’s a violation of government’s obligation to the taxpayer. 

One test of how aggressively local governments pursue efficient management of taxpayer resources will come during the next round of local budgeting. We could see then whether local officials sought to protect taxpayers from rising prices, or whether they passed costs on with little regard for people’s ability to pay. 

(Toronto this spring approved a tax increase double the normal size, citing inflation.)

Another test of whether local governments are willing to help fight inflation will come at local planning and zoning board meetings, and on local ballots next spring. Are these boards willing to roll back the most restrictive land use regulations so the private sector can build more housing, more warehouses, more gas stations, more pipelines?

If municipalities do cite higher costs as a justification for tax increases, will progressives denounce them as greedy? Or is greed, to progressives, a vice that afflicts only the private sector?

Until 2017, New Hampshire had a concealed carry law similar to New York’s, which the U.S. Supreme Court struck down as unconstitutional last week. 

And until last year, the state, like Maine, did not explicitly allow recipients of town tuitioning dollars or other school choice grants to spend their education aid at a religious school. The U.S. Supreme Court struck down Maine’s law as unconstitutional last week.

How did New Hampshire manage to anticipate by a few years two upcoming U.S. Supreme Court rulings on significant constitutional issues?

New Hampshire did it the way the framers of the Constitution intended: By getting the details right, crafting strong arguments, and focusing on persuasion.

There’s a serious policy lesson to be had here, no matter where one stands on the particular issues.

In each case, the winning side started out as the losing side. The prevailing law held up the left-of-center position. Gun owners had to get a government official’s permission before carrying a concealed firearm in public, and school choice programs excluded religious schools.

Changing those laws took years’ worth of legal scholarship and serious policy work. Both times, advocates knew they couldn’t win by making a purely moral or philosophical case. They needed hard data and sound legal reasoning.

On concealed carry, proponents studied the laws of other states, researched crime statistics, and worked with lawyers and legal scholars to show that their position was well within the legal mainstream and was consistent with sound constitutional scholarship. 

School choice and religious freedom advocates did the same when working to prevent the state from discriminating on the basis of religion in school choice programs.

Last year, advocates succeeded in removing the prohibition on purchasing educational services at religious schools. They did it by coming to the Legislature armed with extensive histories of education funding, and with legal arguments and case law that detailed how the Supreme Court had come to treat such laws as violations of the First Amendment right to free expression. 

In short, the winning sides did their homework. Sure, they made moral and philosophical arguments too. But their cases didn’t rest on those abstract ideas. They rested on thoroughly researched, well-reasoned arguments crafted to persuade the mind, not enflame the passion. 

Emotional appeals still work in politics, of course. But coming to a policy debate armed with nothing more than passion is like bringing a karaoke machine to a gunfight. 

New Hampshire was able to get ahead of the Supreme Court on these issues because smart and savvy legislators and activists spent years crafting policies that were aligned with a growing consensus in these areas of constitutional law.

Ranting and venting can be useful for signaling displeasure. But They’re generally no substitute for a well-reasoned, heavily researched, carefully prepared argument. The framers of the Constitution would be gratified. 

While the state was accumulating a record budget surplus this year, legislators were busy finding ways to raise more money from people who don’t mind handing cash to the state. Those would be gamblers.

How to raise more money from people who like to bet? Give them more opportunities to bet.

Until last week, charitable gaming venues were allowed to operate only from 11 a.m. to 1 a.m. Senate Bill 318, sponsored by Sen. Harold French, expanded that to 20 hours a day, and Gov Chris Sununu signed the bill last week. It took effect immediately.

Now, poker rooms can run from 8 a.m. to 4 a.m. 

None of the 18 poker rooms in the state has switched to the new hours yet. But almost all of them stay open until 1 every night of the week. (Some close earlier on weekdays.) So it’s a safe bet that they’ll continue operating for as long as the law allows, provided they can find staff to work the extra hours.

During the Senate hearing on the bill, no one testified in opposition. Among the few questions was one from Sen. Cindy Rosenwald, D-Nashua, who asked why, if the state is OK allowing operations for 20 hours a day, it bothers to set any limits at all?

That’s the right question. Under the new law, poker rooms are forced by the state to close for just four hours a day. Why? What’s the public health or safety benefit in closing them for about the same time it takes to watch half of the Ocean’s 11 movies?

Heavy regulations on gambling businesses are designed to protect the public from whatever spillover crime there might be and from the ravages of addiction. If those externalities are easily manageable, or are less costly than believed, then the case for such heavy regulation diminishes. 

Legislators seem to have decided that the pros (revenue) far outweigh the cons. But there remain understandable residual cultural reservations about the effects of gambling on the population, and this creates a reluctance to throw the doors wide open.

So the state moves mostly in the direction of maximizing revenues while holding onto a shred of the appearance of concern about ill effects. 

The same dynamic played out in the Keno debate this year. 

Keno brings in a lot more money ($47.9 million last year vs. 7.1 million for charitable gaming and simulcast horse racing). Keno has always been limited to places that have liquor licenses, but House Bill 335, sponsored by Rep. Tim Lang, expands Keno to any vendor that has a license to sell lottery tickets (provided the community has approved Keno sales).

The bill passed the Legislature and has yet to see action from the governor. 

These moves to expand gambling options are good evidence that the number of legislators deeply concerned about the potential ill effects of gambling is shrinking.

Two groups that favor gambling expansion are growing. One consists of those who want additional revenue. The other consists of those who think adults should be free to wager on games of chance if they want to.

A fun test of the strength of these factions could come next year. All someone would have to do is introduce a bill to let poker rooms operate 24/7.

CONCORD — Josiah Bartlett Center President Drew Cline has been tapped to host a new morning news/talk show on Manchester radio station WFEA, the flagship news/talk station of Manchester Radio Group.

“WFEA Morning Update,” airing from 6-9 a.m. weekdays, will launch on Monday, June 20th, filling a huge void in New Hampshire’s talk-radio market by offering the only politically right-of-center show airing in the state during the crucial morning drive-time slot.

“It has been too long since New Hampshire has had a strong, thought-proving morning talk show,” said Lucy Lange, Vice President and General Manager of Manchester Radio Group. “We look forward to bringing an insightful, local, conservative talk show to greater Manchester and the surrounding areas, including the state capital.”

With this change, WFEA is doubling the size of its local news effort to further serve the community.

Drew Cline has been president of the Josiah Bartlett Center for Public Policy, New Hampshire’s free-market think tank, since 2017. Before that, he was the long-time editorial page editor of the New Hampshire Union Leader, a freelance columnist for The News & Observer in Raleigh, N.C., and a reporter and editor for the John Locke Foundation in Raleigh.

A USA Today contributor, he has written for more than 100 newspapers and magazines, including The Wall Street Journal, The Atlantic, National Review, The Washington Post, Politico, The Boston Globe, The Weekly Standard, and The American Spectator. He has served as chairman of the state Board of Education since 2017.

Cline has also co-hosted for years an alternative rock show on WBNH-LP FM in Bedford, for which he won a Granite Mike Air Personality of the Year Merit Award from the New Hampshire Association of Broadcasters in 2017.

“I’m happy to be joining the great team at WFEA,” Cline said. “They’re committed to creating a top-quality news show while letting us have some fun with the format. The WFEA Morning Update will be unlike any other show in New Hampshire, so tune in and give it a try.”

Cline will continue as president of the Josiah Bartlett Center. The WFEA Morning Update is a product of WFEA and is not a Bartlett Center initiative. As the Morning Update will be a general news/talk show, the views expressed on the show will not necessarily be representative of the Josiah Bartlett Center.

For those outside the greater Manchester market, the WFEA Morning Update can be streamed live online at https://1370wfea.com.

In 1970, Manchester had more than enough rentals for all who needed one. Over the course of the next half century, the city created its own housing shortage. 

It’s a story repeated in many communities throughout New Hampshire. Manchester offers a case study based on Census figures.

Manchester had 36,024 total housing units in 1970, according to U.S. Census Bureau data. In 2020, the city had 49,445 housing units. That’s an increase of 37% in 50 years. 

By comparison:

  • Salem’s housing units grew from 6.795 in 1970 to 12,005 in 2020, an increase of 76%. 
  • Nashua’s housing units grew from 20,984 in 1970 to 37,933 in 2020, an increase of 80%.
  • Derry’s housing units grew from 4,279 in 1970 to 13,539 in 2020, an increase of 216%.
  • Total statewide housing units increased from 280,962 in 1970 to 638354 in 2020, an increase of more than 127%.

Those are total units, not just rentals. But you can see the rental shortage in the vacancy rate. Manchester’s rental vacancy rate fell from 5.4% in 1970 to below 1% today. 

(New Hampshire suffers from a similarly low vacancy rate, also caused by a shortage of rentals. Local planners in many communities have preferred to approve single-family homes rather than rentals.)

Because Manchester did not allow the construction of enough housing, the city’s population growth rate lagged the rates in some other municipalities. 

From 1970-2020, Manchester’s population grew by 32%. During the same period, Nashua’s population grew by 64%, Derry’s by 95%, and Salem’s by 342%. New Hampshire’s population grew by 87%. 

Because city officials chose to limit growth, Manchester’s population and economy have grown at a slower rate than the rest of the state as a whole. Artificially limiting the city’s housing supply created a drag on the city’s economic growth and cultural life.

If city leaders want to stimulate Manchester’s economy, revitalize its public schools, increase its tax base, and enhance its cultural life, goal No. 1 should be to approve a lot more housing, with an immediate emphasis on rentals. 

The Tax Foundation’s Jared Walczak writes that a push for flat taxes is spreading through the states. This wave of tax reform can make these states more economically competitive, which is worth watching from a New Hampshire policy perspective.

Walczak writes:

In more than a century of state income taxes, only four states have ever transitioned from a graduated-rate income tax to a flat tax. Another four may adopt legislation doing so this year, and a planned transition in a fifth state can now go forward under a recent court decision. In what is already a year of significant bipartisan focus on tax relief, 2022 is also launching something of a flat tax revolution.

In 1987, the 75th anniversary of state income taxation, Colorado replaced its half century-old graduated-rate income tax with a single-rate tax. It would take another 30 years for another state to follow suit, when Utah implemented a flat tax in 2007. Next came North Carolina in 2014, as part of that state’s comprehensive reforms, and most recently, Kentucky implemented a single rate of 5 percent in 2019. They joined five other states which already had flat taxes: Illinois, Indiana, Massachusetts, Michigan, and Pennsylvania.

The first state income tax, implemented in Wisconsin in 1912, had a two-rate structure. The first flat tax was Massachusetts’ tax, which went into effect in 1917. Five states had income taxes back then, with Massachusetts and Virginia both implementing them that January. Only five years passed between the first progressive income tax and the first flat income tax, but 75 years passed between the first progressive income tax and the first time one was transitioned from graduated to single rate. It took more than a century for three to do so—and three states have adopted legislation to make that transition just this year, with a fourth cleared for the transition by a court decision and a fifth potentially in the wings.

Iowa is phasing in a 3.9 percent flat individual income tax by 2026, going from a graduated-rate tax that not long ago topped out at 8.98 percent. Mississippi will have a flat tax as of next year, with a 4 percent rate by 2026. Georgia’s income tax is now scheduled to convert to a flat rate of 5.49 percent, eventually phasing down to 4.99 percent. A court cleared the way for the implementation of Arizona’s transition to a 2.5 percent flat tax, which should happen, pending revenue availability, in 2024. And a flat tax remains an active consideration in Oklahoma as well.

See the rest here.

With two months left in the fiscal year, state business tax collections are $217.2 million above budget. For context, business tax revenues came in $649.9 million over budget during the entire previous decade. 

So surplus business tax collections during the last 10 months have equaled 33% of the total surplus in business tax revenues collected from 2012-2021. 

To put it another way, business taxes have generated about three years’ worth of above-budget revenue in just 10 months. 

To get an idea of just how big that $217.2 million figure is, consider that business tax revenues for the first six months of FY 2012 totaled $231.7 million. 

The state’s collected almost as much in surplus business tax revenues during the 2022 fiscal year (so far) as it collected in total business tax revenues in the first half of 2012.

Total revenues from all state taxes for the current fiscal year are $382.2 million above budget. 

That’s a tremendous amount of surplus revenue for New Hampshire. Predictably, lawmakers have been busy allocating it to various priorities. (We’ll have more on this soon.) 

The good news is that they’ve been treating it as one-time revenue, and therefore not rolling it into permanent spending. The bad news is that they’re not dedicating any significant portion of it to state pensions, which would be the most fiscally responsible thing to do and would save the state money in the long run, as we outline here. 

New Hampshire’s critical housing shortage has emerged as the No. 1 impediment to state economic growth, and the legislative session could end with no substantial progress on the issue. 

In Concord, there is broad agreement that housing is a serious problem. There is little agreement on solutions.

Paralyzed by a widespread reluctance to place legal constraints on local governments, legislators have killed or watered down bills drafted to address the primary cause of the shortage: local planning and zoning ordinances. 

Senate Bill 400, intended to be the major housing reform bill of the year, never offered the sort of sweeping changes that would fix the local regulatory problem. But the most significant changes it did offer were removed last week by the House Municipal and County Government Committee. 

The committee even added language designed to exempt suburban and rural communities from the state’s current mandate to allow housing for lower-income families. 

This follows the Legislature’s rejection of previous bills to prohibit excessive minimum lot sizes and allow small multi-family housing (up to four units) in places served by municipal water and sewer. 

Deference to local governments has not been the only obstacle. The House Municipal and County Government Committee removed from SB 400 a state program to reward communities that allow more housing. 

In the bill’s proposed New Hampshire Housing Champion Certification program, municipalities that adopt ordinances to promote new housing development would be eligible for increased state infrastructure funding. 

An absence of a substantial legislative fix would leave Gov. Chris Sununu’s proposed InvestNH Housing Fund as the only statewide plan. The governor has been a strong and passionate leader on the housing issue. Working within his authority to manage COVID relief money, he’s proposed spending $100 million in federal American Rescue Plan Act (ARPA) funds to create incentives for new housing development. 

That effort was stalled in the Executive Council after objections from affordable housing advocates that the money wasn’t reserved for below-market developments. 

This obsession with steering the housing market toward lower-priced units via government intervention is yet another factor that has contributed to the state’s critical shortage. 

Developers need to make a return on their investment. When government insists that a portion of a development be sold or rented at below-market rates, that discourages new construction. In New Hampshire, town boards even use “workforce housing” quotas to kill projects they don’t want, as they know that these quotas can make projects unprofitable. 

The governor’s plan would allocate $60 million to developers to encourage multi-family housing projects, $30 million to municipalities to encourage the issuance of new housing permits, $5 million to municipalities to study improvements to local planning and zoning ordinances, and $5 million for the demolition of vacant or dilapidated buildings. 

The money to municipalities is directed at overcoming real obstacles by changing the incentives local boards have. Right now there is very little incentive to approve new projects, largely because of vocal opposition fueled by misinformation about the impacts of new housing on local communities. These municipal-directed dollars would offer incentives to move town boards in the right direction.

The seed money for new development would not work the same way. Developers already have every incentive in the world to build, especially in the current market. Developer financing is not a major obstacle to new housing development. Municipal ordinances are. 

The $60 million could cover some lost profits of developments with below-market-rate units. But once that subsidy goes away, those rents will rise to market rate. In any case, subsidizing new development is not necessary, as financing for housing is readily available in the private sector. 

Local ordinances are the problem, and so far, legislators have proven reluctant to approve statewide solutions that limit local authority. Creating better incentives for local governments to approve more housing would be a good option. Unless legislators change course in the next three weeks, the governor’s proposal will be the last statewide solution available this year.