The takeaway message from Gov. Chris Sununu’s State of the State address on Thursday was that New Hampshire, like comedian Larry The Cable Guy, gets her done.

The governor even said at the end of his address, “Let’s Get It Done.”

By solving problems through innovative, decentralized, low-cost methods, the state enables high levels of economic opportunity and growth, the governor said.

“Over the last year, New Hampshire families have benefited greatly from record levels of economic growth. Our focus on our workforce, while making high-paying, quality jobs available has paid enormous dividends.

“Business taxes are at their lowest this century, and more people are working than ever before. The model works — and it’s proven.”

We generally agree with that assessment of the New Hampshire model. But out of curiosity, we checked state economic data published in the state’s monthly New Hampshire Economic Outlook for this month, then compared it to the same report from February of 2017, the month after Gov. Sununu took office. These February issues report data from December of the previous year. We found that:

  • From December of 2016 to December of 2019, New Hampshire added 29,520 people to the labor force and 30,720 to the state’s employment rolls.
  • The number of unemployed individuals shrank by 1,210 persons, from 18,940 to 17,730.
  • New Hampshire’s unemployment rate fell from 2.8% to 2.6%.
  • Wage growth was up from an average wage of $890.46 to $939.21. That growth is lower than the rate of inflation as measured by the Consumer Price Index, but above the rate as measured by the Personal Consumption Expenditures method, which better accounts for the added value of improved consumer goods.

New Hampshire has experienced strong economic growth since the end of the last recession, and this growth has continued during Gov. Sununu’s tenure.

The governor can take credit for keeping business tax rates down and preventing numerous growth-harming taxes and regulations from becoming law during the last two legislative sessions. His defend-the-economy mindset has prevented the state government from reversing these positive economic trends.

Generally speaking, high business tax rates reduce, economic growth, opportunity and innovation.

A 2017 study by professors from Columbia, Duke and Harvard, for example, found that higher corporate tax rates led to lower corporate profits, which in turn led to lower domestic investment and, subsequently, lower economic growth.

And a 2018 study by economists from the University of Chicago and Harvard found that “taxation of both corporate and personal income negatively affects the quantity, quality, and location of innovation at the state level and the individual inventor and firm levels.”

Since taking office, the governor has focused a lot of his energy on protecting the economy from legislative proposals that would impeded growth, hiring, innovation and economic opportunity. That approach is working well for the state, which has hit record levels of employment in the past year and is, at long last, attracting young people again.

In other words, that approach is getting her done.

It’s Primary Weekend in New Hampshire, when Granite Staters ask questions of candidates, national reporters ask questions of Granite Staters, and the entire political universe asks, “What the heck, Iowa?”

On Monday, the Great Iowa App-ocalypse occurred. In an evening of dumbfounding incompetence, the Iowa Democratic Party may have done what Michigan, California, Florida, Delaware and woke progressives nationwide have failed failed for generations to achieve — slay the Iowa caucuses.

In response, Gov. Chris Sununu, Secretary of State Bill Gardner, and other state officials held a press conference to announce that New Hampshire election officials have got this.

“The 2020 presidential primary will take place against the backdrop of New Hampshire’s long history of conducting elections that are fair, with complete integrity, well run and with a very high level of voter participation,” Attorney General Gordon MacDonald said.

As Josiah Bartlett Center President Andrew Cline pointed out in The Wall Street Journal mid-week, Gardner’s insistence on simplicity has served New Hampshire well. Gardner has insisted on a decentralized, low-tech system of paper ballots, voting machines not connected to the Internet, and local result announcements. The simplicity is itself a sort of elegance.

Voters can take a lot of lessons from Iowa’s failure and New Hampshire’s long history of success. (Let’s hope Tuesday continues the streak.) The biggest is the virtue of simplicity over complexity.

Complex, bureaucratic systems are prone to failure for multiple reasons. One is that they have more moving parts and therefore more opportunities for something to go wrong. Another is that they tend to suppress individual autonomy and ingenuity.

A system wholly reliant on expert designers and managers cannot be fixed in the field by a layperson if it breaks. That problem was illustrated well in Iowa Monday night.

It also discourages individual users from improving it through their own creative adaptations.

The complexity of the Iowa caucuses contrasts with the beautiful simplicity of the New Hampshire primary, where every vote is recorded on paper with a pen — and counts.

Though the caucuses are not socialist, they do bear the mark of “expert” planning. They keep failing not because Iowans are bad at voting, but because the caucus system first imposed by the Iowa Democratic Party in 1972 is a textbook example of a bad design imposed by planners who were not as clever as they thought they were.

Planned economies fail in largely the same way. Market economies might be complex, but not from the hand of a master planner who seeks to exert control. No one person has to know how the whole system works. It functions precisely because millions of people are expert in their own small area and no one is required to manage all of it as a whole — sort of like the decentralized system Gardner devised for the New Hampshire primary.

Planned economies, by contrast, don’t turn out so well. In “Heaven On Earth: The Rise, Fall, and Afterlife of Socialism,” author Joshua Muravchik shows how the planned systems designed by various utopian collectivists failed. From the very smallest communes to China and the Soviet Union, planners always made the people poorer and their societies weaker. They could never replicate the success of the unplanned market economies.

The abject failure of the long parade of planned community experiments is seldom taught today, which is why we are holding a talk at the Millyard Museum this Saturday night with a renowned expert on those failures.

Dr. Joshua Muravchik, author of “Heaven on Earth: The Rise, Fall, and Afterlife of Socialism,” is the featured speaker at our latest Civil Discourses event happening Sat., Feb. 8, at 6:30 p.m. at the Millyard Museum in Manchester. For more details or to make your reservation, please click here.

If you can’t make it, you should consider reading his excellent book.

Brace yourselves. The Senate on Thursday passed a business tax reduction — unanimously.

By a vote of 24-0, Republicans and Democrats agreed to eliminate the business profits tax (BPT) liability of thousands of New Hampshire businesses. Senate Bill 223 would increase the minimum gross income required to file a business profits tax return by 50 percent, from $50,000 to $75,000.

The bill was co-sponsored by Sen. Jeanne Dietsch, D-Peterborough, and Sen. James Gray, R-Rochester. Dietsch last year sponsored a payroll tax that she labeled “an income tax.” Sen. Gray in the past has sponsored right-to-work and anti-abortion bills.

The senators are on opposite ends of the political spectrum, but they found common ground on the idea that the state’s BPT kicks in too early at $50,000 worth of income. Their colleagues agreed and approved the bill by a vote of 24-0.

The Department of Revenue Administration would not estimate the bill’s impact on future tax revenue but did calculate that 4,102 taxpayers reported business tax revenue between $50,001 and $75,000 in 2016. “Of the 4,102 taxpayers, 3,774 had no BPT liability with the remaining 328 taxpayers reporting a total liability of $347,489.”

So the bill has the potential to keep hundreds of thousands of dollars a year circulating in the private sector.

Senate Ways & Means Committee votes against bill to defund education scholarships

Last week The Broadside reported on Senate Bill 663, which would replace business tax deductions for lower-income student scholarships with business tax deductions for higher-earning college graduates.


That reporting got noticed. At Wednesday’s hearing, parents, students, school administrators and donors to the state’s two scholarship programs turned out to explain the value of the scholarships. After lengthy and heart-wrenching testimony, Sen. Dan Feltes, D-Concord, moved to mark the bill Inexpedient to Legislate. Feltes is a sponsor of the bill. The committee voted 5-0 to recommend that the full Senate kill SB 663.

Does socialism really create a just, peaceful and equitable society?

Join us for a fun discussion of the topic by famed author Dr. Joshua Muravchik and find out!

(Hint: Dr. Muravchik is a former socialist.)

Dr. Muravchik will discuss his great book “Heaven on Earth: The Rise, Fall, and Afterlife of Socialism” on Saturday, Feb. 8, from 6:30-8 p.m. at the Millyard Museum in downtown Manchester.

If you want to know the true history of socialism, its failures and its tremendous cost, you can’t miss this event.

For more details and reservations, visit our Eventbrite page.

A bill to tax sales of electronics in New Hampshire made news this week, and the bemused media coverage it drew was justified. Yet New Hampshire Union Leader State House Bureau Chief Kevin Landrigan saw a different, and more important, angle.

Landrigan put the bill in context and showed that it was one of several attempts to raise tax revenue through broad-based taxation.

The bigger story was not that a lonely representative proposed a kooky sin tax on consumer electronics (House Bill 1492). It was that a few legislators are trying to lay the groundwork for the eventual imposition of broad-based sales and income taxes.

Rep. Robert Schamberg, D-Wilmot, is the sole sponsor of CACR 17, a constitutional amendment to mandate that any broad-based tax “be enacted solely for the purpose of reducing property taxes by the same amount of revenue as raised by such tax.”

Sen. Jeanne Dietsch, D-Peterborough, is the sole sponsor of Senate Bill 474, to rename the state’s interest and dividends tax the “income tax on interest and dividends.”

Technically, the interest and dividends tax is a tax on income. But a mere technical clarification is not the point of the bill. The point is to undermine resistance to direct state income taxation.

“We need to see ourselves as a state in which half the people do pay income tax, a third pay interest and dividends and about a fifth pay half a billion dollars of income tax a year to Massachusetts to help educate not New Hampshire’s children but others,” she told the Senate Ways and Means Committee on Wednesday.

Each of these bills would serve the same common purpose, which is to lower resistance to broad-based taxes, making it easier to pass large-scale sales and income taxes in the future.

That there were only four sponsors among all three bills shows just how few legislators were willing to spend political capital on a doomed charge up a mountain. Still, the bills also show that hardcore support for sales and income taxes is alive and active in the Legislature.

Some legislators are particularly persistent. Sen. Dietsch last year introduced a payroll tax on income above $132,900 and helpfully clarified precisely what kind of tax it was.

“This is an income tax,” she said.

She gets full marks for determination and perseverance.

The persistence of these legislators raises another question. How would such bills fare were they not destined for the hands of a willing executioner?

The current governor has made clear he will veto a sales or income tax. That dampens enthusiasm in the Legislature for spending energy on such efforts. But one of his potential challengers announced last year that he would not take The Pledge.

The prospect of having an income or sales tax bill signed into law rather than immediately vetoed would be highly likely to change legislators’ calculus. This year, such bills are met with derision. That might not always be the case.

Nine days ago, you thought you woke up in a new year and a new decade. A fresh start! A chance to leave the past behind and venture into a bold new future of limitless possibilities!

Sorry, it’s Groundhog Day and you’re Bill Murray.

Welcome to Week 54 of 2019.

The Legislature opened its session on Wednesday by taking up bills that remain from the previous year, as is its custom. Even with hundreds of leftover bills awaiting disposal, a majority party can set the agenda and tone for a new year on the first days of a session.

The message coming from Concord this week was crystal clear: 2020 is going to be 2019 all over again.

The last legislative session was defined by its clashes between the governor and the Democratic majority in the Legislature over the imposition of new costs on employers and consumers, from business tax increases to energy price hikes to costly employer regulations such as mandatory paid leave and large minimum wage increases.

The House this week signaled that Democrats intend to make the 2020 elections about all of these same issues. They are determined to impose through the legislative process new financial burdens on employers and consumers.

Of course, they don’t view these issues this way. They would say they’re protecting Granite Staters from businesses that refuse to do the morally right thing. That philosophical difference drives these two competing agendas and will shape the 2020 state elections.

Last year, Gov. Chris Sununu famously vetoed 57 bills, including many of the Democrats’ top priorities. This week was a parade of zombie bills killed by the governor but reincarnated and sent staggering back out by legislators.

The House this week passed a mandatory paid family leave plan like the one Gov. Sununu vetoed last year. It was no accident that paid family leave was Senate Bill 1 in 2019 and a top item for the opening of the 2020 session.

Like last year’s plan, this one would create a government-run family leave program and pay for it by imposing a tax of 0.5% on wages. Also like last year, the Department of Employment Security estimated the cost to be $168.6 million a year.

Also returning from the dead was the minimum wage increase. But this time the zombie returned with new weaponry. The bill passed this week would more than double the state minimum wage to $15 an hour. The version that passed last year raised it to $12 an hour.

A representative who argued for letting the market decide wage rates was shouted down and the Speaker of the House had to restore order. The prevailing view was that greedy employers must be made to pay morally correct wages.

But the public sector pays less than $15 an hour too. The bill’s fiscal note states that 224 state employees currently earn less than $12 an hour, the minimum that would kick in this year were the bill to become law. By forcing government wages higher, the bill would put upward pressure on taxes.

The bill goes even further by allowing municipalities to establish minimums higher than the state’s. (Look out, Portsmouth and Hanover restaurants.) Naturally, no city could set a minimum lower than the one passed by the Legislature. So Berlin, Claremont, and Charlestown would have to find the money to pay all of their employees $15 an hour too. Those greedy plutocrats.

Imposing more employer costs that would be passed on to consumers, the House approved a plastic bag ban, also a zombie from last year, though not one vetoed by the governor. The bill’s summary states: “This bill requires businesses to charge customers for single-use bags.”

But it does more. It even regulates the composition of paper bags that might be offered in place of plastic ones. “Paper bags shall be made of recycled paper defined as 100 percent recyclable containing a minimum of 40 percent post-consumer recycled materials,” the bill asserts. “The bag shall be visibly labeled as ‘made from recycled materials’ and ‘recyclable and reusable.’”

Legislators who made a big show of trying to subsidize New Hampshire’s forest products industry last year just passed a bill to reduce demand for paper bags made with fresh-cut trees. Politics is strange.

It’s 2020 (allegedly), and this is how the legislative session began, with zombie bills and rehashed debates from 2019. It’s not likely to change much between now and November. So cue up Old Town Road and put on your House Stark T-shirt. This session is going to feel like a remake no one asked for but studios just couldn’t resist forcing on everyone.

The Legislature opens its 2020 session on Wednesday, and among the bills recommended out of committee for passage that day is a proposal to protect Granite Staters from the cruel predations of… art therapists?

Really.

This urgent action wasn’t mentioned among the Legislature’s 2020 priorities, yet here is House Bill 546. Why?

Well, in every legislative session, a small group of art therapists comes to the Legislature with an urgent request: Please outlaw our competition.

They don’t put it quite that way, of course. The messaging is always about licensing being needed for insurance coverage, or the danger posed by poorly trained art therapists. Yet the bills always define art therapy as broadly as possible and include criminal penalties for its unlicensed practice. Classic rent seeking.

Usually, common sense prevails and the bill dies. Committee revisions to the latest version of this anti-competitive legislation might allow it to pass.

New Hampshire does not license art therapy as a separate therapeutic practice. In fact, only eight states do, according to the American Art Therapy Association. Art therapists who have advanced degrees, and sometimes licenses from another state, have for years argued that artists and therapists who blend art instruction with even a small dose of therapeutic practices are a danger to the public and must be stopped.

Never mind that art has been considered therapeutic since cave men started scratching on rocks, or that the practice known as art therapy was invented by an artist, not a licensed therapist.

Art therapists who hold advanced degrees and out-of-state licenses want the state to require that anyone who offers “art therapy” services… hold an advanced degree and a state license.

See how this works?

Currently, licensed therapists in New Hampshire can incorporate art into therapy sessions without having to spend several more years in school to obtain a separate art therapy degree.

For example, a child therapist might have a child express his or her feelings by drawing pictures. Children don’t have the biggest vocabularies, so this can be a great way to help children communicate complicated emotions.

Therapists are not alone in using art to help people deal with emotional or physical issues. Art instructors routinely help people express previously unarticulated emotions through the creation of art. Museums even offer programs that, while not conducted by licensed therapists, are therapeutic in nature.

For example, the Currier Museum of Art’s “Art of Hope” program “provides support for loved ones whose family members suffer from substance use disorder.”

Under House Bill 546, it would be illegal for anyone to offer “art therapy” services unless the instructor has “a masters or doctoral degree from an accredited college or university in a program in art therapy….”

The bill contains an exemption for art teachers who do not present themselves as therapists. But under the definitions in the bill, any presentation that an art instruction program is therapeutic in nature could be construed to run afoul of the law.

Included in the bill’s definitions of art therapy is:

“Using the process and products of art creation to facilitate clients’ exploration of inner fears, conflicts, and core issues with the goal of improving physical, mental, and emotional functioning and well-being.”

Art instructors have been doing this for centuries. Without a license. Suddenly, in 2020, it’s a danger to the public?

There’s no evidence that unlicensed art therapists are inflicting psychological damage on Granite Staters. In fact, as mentioned earlier, only eight states have a distinct art therapy license and only five cover the practice under another license.

But there’s plenty of anecdotal evidence that the absence of an oppressive licensing regime has allowed many people to find services that have helped them through difficult times.

Though presented as a public health measure, this bill is simply an effort to restrict competition. It serves a small special interest, not the public interest.

Artificially reducing the supply of a valuable service by writing unnecessary restrictions into law would be an odd way to start this new decade.

The regional cap-and-tax scheme called the Transportation and Climate Initiative (TCI) is a bad deal for New Hampshire, the initiative organizers’ own projections show.

Modeled on the Regional Greenhouse Gas Initiative, the TCI would cap carbon emissions from transportation sources (vehicles) and force fuel distributors to buy carbon allowances. A declining cap would force distributors to buy more allowances annually. The hope is to compel a switch to non-fossil fuels or to discourage driving by making it uncomfortably expensive.

Naturally, the costs of buying the allowances would be passed on to consumers. In effect, the TCI imposes an additional fossil fuel tax on top of the state and federal gas taxes consumers already pay.

The cost to consumers would be enormous. On December 17th, the TCI organizers released the results of their own analysis of the program’s impact. They project that the carbon allowances would generate revenue of between $1.4 billion and $5.6 billion annually in the 12-state TCI region (plus the District of Columbia), which covers Mid-Atlantic and Northeastern states, including New Hampshire.

That would be a cost of between $14 billion and $56 billion over the decade spanning from 2022-2032.

But the TCI organizers’ own projections show that almost all of the carbon emissions reduction projected during that decade can be attributed to existing trends and not to the TCI scheme.

In August, they projected a baseline reduction in carbon emissions of “roughly 20 percent” without the TCI.

“Total gasoline and diesel consumption and CO2 emissions both fall by roughly 20% from 2022 through 2032 as a result of increased fuel economy in light and heavy-duty vehicles and increased LDV EV shares,” according to the organizers’ own analysis. (LDV EV = light duty vehicle electric vehicle.)

In a presentation released on December 17th, TCI organizers projected that the TCI would cause carbon emissions to fall by approximately 1-5 percentage points above the roughly 20 percent that will occur under existing policies.

The worst-case scenario projection was a 20 percent drop in carbon emissions from 2022-2032, which could be as little as a fraction of a percentage point above the baseline projection. The best-case scenario projection was a 25 percentage point reduction, which would be, at best, 6 percentage points above the baseline.

Understanding the baseline is critical because groups that support the TCI are already claiming it will produce up to a 25 percent reduction in carbon emissions in the region. That is false. Roughly 4/5ths of that reduction will happen anyway, the TCI organizers’ own projections show.

At best, the TCI would reduce carbon emissions of a little more than 5 percent in 10 years — at a cost of $56 billion in that best-case scenario. Without the TCI, carbon emissions are projected to fall by roughy four times that amount. If the TCI’s worst-case scenario occurs, the cost would be $14 billion to achieve an emissions reduction roughly 1/20th the size of what would happen anyway.

The TCI organizers projected that their initiative would cause gas taxes to rise by 5-17 cents per gallon if distributors passed the costs on to consumers (which they would). That seemingly small figure would extract billions of dollars from the economy, giving it to governments to distribute to projects that they favor but that consumers might not. In fact, the whole point is to replace consumer and investor choices with those made by government officials.

The program’s assumed effectiveness relies heavily on the premise that government officials will spend billions of dollars in ways proven to be effective at generating additional carbon reductions. Not only would those projects have to be effective on their own, they would have to be more effective than the choices that otherwise would have been made by business, entrepreneurs and consumers in the absence of the TCI.

Rather than forcibly extract billions of dollars from consumers in yet another heavy-handed attempt to control people’s behavior, governments should scrap this carbon tax scheme and let the market continue to generate solutions.

A positive shift is happening in New Hampshire’s pro-housing movement. Gov. Chris Sununu helped highlight it on Wednesday.

Speaking at a housing forum organized by the Center for Ethics in Government at St. Anselm College, the governor criticized municipalities that use local regulatory powers to impose severe restrictions on housing development.

Bedford, the governor said, was an example of a town that has made it difficult for people to build lower-priced homes, particularly multi-family housing.

That comment made news and focused attention on local regulations that prevent developers from meeting New Hampshire’s high demand for new residential construction.

Taylor Caswell, commissioner of Business and Economic Affairs, called the situation a crisis, as did others at the conference.


New Hampshire Housing Finance Authority data support that description. The authority’s November Housing Market Report found that New Hampshire’s rental vacancy rate was a scant 0.75 percent. A healthy vacancy rate is closer to 5 percent.

As of October, only 44 percent of New Hampshire real estate listings were for homes priced below $300,000. The authority’s research shows that overall real estate listings have fallen 41 percent in the past five years. But to highlight the affordability problem, listings above $300,000 have fallen 8 percent while listings below $300,000 have fallen 60 percent.

Vacancy rates, listings, and prices signal a serious supply shortage.

In the past, much of the effort to address this ongoing problem has focused on state subsidies for affordable housing. But there’s an increasing recognition that subsidies will not solve the problem because a lack of incentive to build is not the cause of the shortage.

A poll conducted at the end of Wednesday’s conference reflected an increasing agreement that local government regulations are preventing developers from meeting the market demand for lower-priced homes.

State financial incentives did not poll as well as did proposals to educate the public about the issue and encourage citizens to loosen overly restrictive local regulations.

Developers we’ve spoken with about this issue say they want to build less costly homes, but local regulations often pose insurmountable obstacles. Zoning and planning rules can literally make it illegal to build small single-family homes on small lots or to construct multi-family dwellings in a way that keeps rental prices low.

There seems to be an increasing realization among housing activists and office holders that the market isn’t the problem, government interference in the market is. That understanding is the first step to fixing the problem.

For the second year in a row, all undergraduate campuses of the University System of New Hampshire were nationally recognized for their commitment to freedom of speech.

In its just-released “Speech Codes 2020” report, the Foundation for Individual Rights in Education (FIRE) gave the University of New Hampshire, Plymouth State University and Keene state College “green light” ratings. A green light signifies “that the institution does not maintain any written policies that imperil free expression.”

By contrast, the state’s lone Ivy League institution, Dartmouth College, received a “red light” for having “at least one policy that both clearly and substantially restricts freedom of speech.”

Dartmouth received D grades on due process rights for students accused of misconduct, scoring in the mid-single digits on a 20-point scale.

Students at Dartmouth also are encouraged to report each other to the administration for “bias.” The college’s Office of Judicial Affairs tells students: “If you are the target of, witness to, or even simply hear about any form of bias happening to a Dartmouth student, you should submit a Bias Impact Report immediately.”

New Hampshire’s public colleges and universities have no similarly Orwellian instructions for students to act as secret speech police, nor do they have speech codes that violate students’ First Amendment rights.

As recently as 2017, Keene State College received a red light rating and the University of New Hampshire received yellow light from FIRE for having restrictive speech codes.

But in the spring of 2018, UNH revised all of its codes, and Keene State followed suit in the summer.

“Universities should be the first to embrace the free exchange of ideas and speech,” then-UNH President Mark Huddleston said. “The only UNH policy on speech is that it is free and unfettered on our campuses, and we’re pleased that FIRE has recognized our efforts.”

Upon his inauguration as UNH’s new president in 2018, Jim Dean also signaled his support for freedom of speech.

Granite Staters can be proud that their public university system has made its campuses into forums for the free exchange of ideas. And they can be thankful to FIRE for encouraging good behavior by monitoring campus speech policies and publishing these rankings.

(Note: FIRE’s reports do not include Granite State College, the University System of New Hampshire’s adult education college.)