A conversation about the Espinoza ruling with Tim Keller and Kate Baker

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On June 30, 2020, the U.S. Supreme Court ruled in Espinoza v. Montana Department of Revenue that states cannot exclude religious institutions from participating in school choice programs. New Hampshire has a similar scholarship program and a similar constitutional provision to the ones that were under discussion in the Espinoza case.

On July 8, the Josiah Bartlett Center for Public Policy presented an online discussion of the case and its impact on New Hampshire, featuring two experts on the question of religious liberty and alternative education.

Tim Keller, senior attorney for the Institute for Justice, was a co-counsel for the plaintiff in the case.

Kate Baker is executive director of the Children’s Scholarship Fund N.H., which administers a New Hampshire tax-credit scholarship program.

In a webinar for the Josiah Bartlett Center, they explained the Espinoza ruling and its effect on New Hampshire.

We posted the video of that discussion on our newly resurrected YouTube channel here.

 

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Don’t celebrate dodging business tax hikes just yet

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On Monday, the Josiah Bartlett Center reported on our website (which you should read religiously because you’re smart and you want to drop impressive knowledge on unsuspecting strangers at cocktail parties, whenever we can have those again) that preliminary state revenue figures suggest there won’t be automatic business tax hikes for the 2021 fiscal year. 

The key word there is “suggest.” A business tax increase is still a possibility, if a remote one.

Last year’s state budget contained a provision that would trigger a Business Profits Tax increase of 2.6% and a Business Enterprise Tax increase of $12.5 percent if state General and Education Fund revenue fell at least 6% below projections. 

State collections for June, the final month of the fiscal year, show that General and Education Fund revenues fell below plan for the year by 5.4%. But the June report is based on cash collections as of the end of June. The numbers are always adjusted later, and the totals are not final and official until the audited financial report is released in December. 

We looked back at state revenue reports through 2007 (the last year for which reports are posted online) and found five years between 2007 and 2019 in which there was at least a $20 million difference between the June cash report and the final audited revenue figures.

The differences are as follows:

2008: $20.4 million

2010: $78.5 million

2012: $27.2 million

2016: $67 million

2019: $-25.1 million

Only in 2019 was the audited figure lower than the June cash figure, and most of that change (more than $16 million) was attributable to business tax refunds. But there was a drop of about $9 million not related to tax refunds. 

If the final, audited General and Education Fund revenues for FY 2020 are lower than June’s reported revenues by $15.35 million, the tax increases would be triggered. 

That would be an unusually large drop, but it’s not unprecedented. Businesses face the prospect of spending the next six months in tax-rate limbo, which can affect hiring and other spending plans. 

If you’re uncertain whether your taxes are going to go up, you’re more likely to save cash and avoid hiring, especially since payroll makes up the largest share of the Business Enterprise Tax, which is scheduled to rise by 12.5% if the revenue trigger is met. 

Legislators had the chance to remove this uncertainty and repeal the tax-hike trigger. But, hoping for a tax increase, they refused. 

We’ll have a better idea of the situation in a few weeks, when the state releases June preliminary accrual report. That’s a follow-up report to the June cash report. It includes a fuller financial picture and tends to be much closer to the final, audited report released in December.

For now, business owners and managers should keep the celebrations on hold.  

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N.H. businesses just miss automatic tax increase, state data suggest

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New Hampshire businesses will not suffer automatic tax hikes early next year, new figures released by the Department of Revenue Administration suggest.

A provision in last year’s state budget would have triggered automatic business tax increases if general and education fund revenue fell at least 6% below projections for the 2020 fiscal year. The newly released numbers for the end of the 2020 fiscal year show a 5.4% decline.

Had revenue fallen another $15.35 million, the tax hikes would have been triggered. But higher-than-anticipated collections from the tobacco tax ($14.5 million), insurance taxes ($9 million, the lottery ($2.9 million) and the tobacco settlement ($2.9 million) slowed the decline and kept revenue from hitting the -6% trigger. 

Though interest and dividends revenue for the year was 6.8% less than projected, an $11.7 million increase this June vs. last June helped slow the overall revenue slide.

The numbers are not final until audited at the end of the calendar year. Still, these official but unaudited numbers offer some much-needed good news for New Hampshire employers.

“If this holds true after the audited figures have been released, every business in New Hampshire will have dodged a bullet.” Jim Roche, president of the Business and Industry Association, New Hampshire’s statewide chamber of commerce, told the Josiah Bartlett Center. “With all the struggles businesses are experiencing as they come back from the COVID-19 pandemic, higher taxes are the last thing they need.”

“Legislators should have taken this tax-hike trigger off the books when employers asked,” Andrew Cline, president of the Josiah Bartlett Center for Public Policy, said. “Instead, legislators gambled with the livelihoods of many small business owners and their employees. Though employers seem to have gotten lucky, they should’ve been able to rely on their legislators, not Lady Luck.” 

The numbers are contained in the Department of Revenue Administration’s June Monthly Revenue Focus report, which tallies the state’s revenue for June and for the entire fiscal year, which ended June 30th. 

The report shows business tax revenue to be 14.6% lower than projected. The Business Profits Tax was down 14.7% and the Business Enterprise Tax 14.3%. 

The Meals and Rentals Tax was 11.6% below projections, and the Interest and Dividends Tax 6.8% below. 

The Tobacco Tax posted a 7.3% gain over projections, and the Insurance Tax a 7.2% gain.

A surge in Tobacco Tax revenue is particularly notable. The June report notes a 56% increase in tobacco stamp sales (which means cigarettes) in June 2020 vs. June 2019. The state saw a similar spike, of 50%, in March. 

When compared to the 2019 fiscal year, 2020 general and education fund revenues fell by 7 percent, with business taxes leading the decline.

The state experienced a 19.3 percent drop in business tax revenue from 2019, with Business Profits Tax revenue falling by 16.5% and Business Enterprise Tax revenue falling by 23.6%. 

Meals and Rentals Tax revenue was down 6.5% from 2019, and proceeds from the Interest and Dividends tax were down 4.6%. 

The Tobacco Tax posted the biggest increase year-over-year, showing a 6.9% gain.

Amid all of the gloomy figures, the monthly numbers for June offer some encouraging news. June revenues — led by tobacco, interest & dividends, liquor, utility property and business profits — were higher than last June’s by a total of $1.4 million.

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It’s OK to celebrate the United States of America

Independence Day, 2020, will come without parades or fireworks shows in many communities. They are canceled for the coronavirus. Some Americans seem to want them canceled for good. They’re ashamed of the flag and the nation it represents. 

Six years from America’s 250th birthday, her citizens should be preparing for the party to end all parties. Instead, many of us are questioning the idea that the country is worth celebrating at all.

It is. Joyfully and unashamedly. 

As all other nations before it, ours was founded and built by flawed human beings, many of whom did terrible things. As James Madison observed, men are not angels. If they were, there would be no need of government. 

Unlike all other nations before it, however, ours was dedicated to a principle so radical that it transformed human culture on a global scale. 

Throughout human history, inequality based on strictly enforced social rank was universally accepted. From East to West, cultures were based upon the unchallenged belief that there were “better” and “worse” classes of people. 

This system accepted slavery as merely the lowest of the many rigid and brutally enforced social ranks. Slavery was an accepted and thoroughly entrenched part of societies around the world, including ancient Athens and Egypt, medieval Ghana, 19th-century Brazil, and China and India throughout most of recorded history. 

Everywhere humans settled, they tended to build societies with largely unchangeable social and economic strata. The pre-1776 world, aristocratic and rigidly hierarchical, would be unrecognizable to today’s Americans, whose vocabulary of human rights would sound insane to most people throughout human history. 

Whether they know it or not, today’s young Americans are the direct intellectual descendants of the American colonists who, after enjoying more than a century of self-government, started to question their assigned status within the British colonial system. 

The Americans openly questioned their social superiors, including the king. If they were to be taxed, then they demanded representation in Parliament, a dramatic elevation of their social status. When the king and Parliament told them to shut up and submit to the rightful rule of their superiors, they loaded their muskets. 

The American Founders were not saints. But most of what they are reviled for today was the cultural residue of the aristocratic age they destroyed. Their insistence that they had the right to govern themselves, and that “all men” enjoyed the same right by virtue of being “created equal” flipped the global human social order upside down. 

Legend has it that General Cornwallis ordered the band to play “The World Turned Upside Down” during his surrender ceremony at Yorktown. It would’ve been a fitting tune, for the American Revolution rendered the old world order obsolete and invented a new one in which any individual, no matter the circumstances of his or her birth, was presumed to have the same value, the same rights, and the same claim to self-government as any other. 

In his Pulitzer-winning book “The Radicalism of the American Revolution,” historian Gordon Wood explained that “the Revolution suddenly and effectively ended the cultural climate that had allowed black slavery, as well as other forms of bondage and unfreedom, to exist throughout the colonial period without serious challenge. With the revolutionary movement, black slavery became excruciatingly conspicuous in a way that it had not been in the older monarchical society with its many calibrations and degrees of unfreedom; and Americans in 1775-76 began attacking it with a vehemence that was inconceivable earlier.”  

The Society for the Relief of Free Negroes Unlawfully Held in Bondage, the first anti-slavery society, was founded in Philadelphia on April 14, 1775 — four days before the battles of Lexington and Concord. The revolutionary ideas engulfing the American colonies were sparking change before they sparked the war itself.

The Americans were coming to believe every person to be sovereign unto himself. When sovereignty is removed from the king and nestled inside each individual, any claim that one person, one group of persons or one class of persons has a right to rule the masses evaporates.

“Popular consent now became the exclusive justification for the exercise of authority by all parts of the government — not just the houses of representatives, but senates, governors, and even judges,” Wood wrote. 

Thomas Jefferson’s words, quoted above, did more than set patriotic hearts afire. They burned down the old order. Not instantly. Not easily. But permanently. 

Even Americans who think they loathe Washington, Jefferson and Madison do not attack them with the ideas that prevailed before the American Revolution. They attack America’s Founders with the Founders’ own words and ideas. That’s how thoroughly the American Revolution changed the world. 

For modern Western politics, 1776 is Year One. The ideas that prevailed before are but the ancient fragments of a defeated civilization. That civilization destroyed with an idea expressed in just five words. “All men are created equal.” 

Celebrate the United States of America? 

Without hesitation. Every year. Every day.  

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Impose $200 million in PFAS cleanup costs with no idea what the benefits are? Whatever

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Sometimes, the bills everyone is afraid to vote against are the ones we should worry about the most. The PFAS bill passed 23-1 in the Senate last week is a great example. 

If you haven’t followed the Saga of the State PFAS Standards,* well, you’re probably a normal human being with a happy life, and we’re sorry to bring it up. Just know that it’s less complicated than the plot of Twin Peaks, but more complicated than Bulgaria’s relationship with Turkish soap operas.

Because we know you’re rushing out the door to enjoy in-person restaurant dining before Shutdown II: Corona Boogaloo starts, we’ll try to keep this as short as a Looney Toons episode with all the violence removed. 

The state Senate recently bundled into House Bill 1246 a bunch of PFAS-related bills for rapid passage in the coronavirus-shortened legislative session. We’ll focus on just one section of this bill: the part that writes PFAS maximum contamination levels (MCLs) into law.

The bill adopts the MCLs issued by the state Department of Environmental Services last year. These standards are, to be diplomatic, of questionable scientific legitimacy. 

The allowed parts per trillion (yes, trillion) are many times lower than the Environmental Protection Agency’s guideline levels and are based on animal tests and a questionable model adopted by one state (Minnesota).

Moreover, the costs are enormous and the benefits unknown — despite the fact that the department was required by law to conduct a cost-benefit analysis. 

The department estimated the costs at $190 million. That’s a gigantic sum. Though the point of a cost-benefit analysis is to determine whether the benefits are worth the costs, the department offered only a qualitative, not a quantitative, analysis of the benefits. That is, it couldn’t put a price tag on the benefits it claimed would result from these lower levels. 

“Any rational interpretation of the statute requires more,” a judge ruled last November in a lawsuit challenging the inadequacy of the cost-benefit analysis. That lawsuit is pending before the state Supreme Court. 

In the absence of a quality state analysis, the New England Ratepayers Association hired an economist to do one. It estimated the benefits to range between $2.6 million and $8.0 million per year, far lower than the estimated costs of $11.6 million to $23.2 million per year.

Usually, legislators will wait for a court ruling before moving forward with legislation in situations like this. Not this time. 

Writing these incredibly low and costly MCLs into law now, before the Supreme Court has determined whether their adoption was done legally, is foolhardy. 

Writing them into law without having any evidence that the benefits will outweigh the costs is reckless. 

Writing them into law without really knowing whether levels that low and that expensive are absolutely necessary to protect public health is sloppy.

These are only some of the problems with one section of this PFAS bill.

Given the poor state of municipal and business budgets this year, adding these additional costs now will only push local governments further into the red. There’s a very real possibility that the cleanup costs associated with these mandates will combine with other budget difficulties to trigger property tax increases. 

Waiting six months for the economy to recover further and the Supreme Court to act would be the prudent move. (But this is politics. If you want prudence, buy The White Album.) 

Legislation this foolhardy, reckless and sloppy usually meets more than token opposition. But this bill is expected to pass easily next week. 

Maybe, a few years after it passes and municipalities have spent tens of millions of dollars to meet its mandates, triggering property tax increases, we’ll finally get that complete and legally required cost-benefit analysis from the department.

*Rumored to be the title of Bob Dylan’s new 37-minute-long single. 

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Senate beclowns itself with comically unserious unemployment proposal

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Institutions and those entrusted with their care have beclowned themselves so regularly over the years that Americans have lost faith in almost all sources of authority. In this environment, the New Hampshire Senate this week surveyed the cultural scene and said, “hold my beer.”

It’s hard to say what will be hurt most by the unemployment legislation the Senate’s Democratic majority passed on a party-line vote on Tuesday: New Hampshire businesses or the reputation of the New Hampshire Senate.

House Bill 1166, a hodgepodge of business mandates and impermissible exemptions to federal unemployment policy, is an absurdity that defies all attempts at reasonable explanation. In its totality, it is a stunning example of politicians choosing showmanship over the public official’s duty to govern.

On its face, the bill is a direct assault on New Hampshire businesses struggling to survive the coronavirus-caused recession. It would cost New Hampshire employers hundreds of millions of dollars, potentially triggering numerous business closures.

“I feel it kicks the businesses while they are down,” Wendy Hunt, president of the Greater Merrimack-Souhegan Valley Chamber of Commerce, wrote in testimony submitted to the Senate Commerce Committee. “It is the OPPOSITE of what the legislature should be doing for our business community.”

If it becomes law, the bill would burden employers with higher costs. But  some of the worst parts of the bill would have a limited effect because they are really a publicity stunt disguised as legislation. The very legislators who champion the bill as a necessary protection for New Hampshire workers inserted a provision to prevent many of those alleged protections from taking effect.

Huge costs and violations of federal labor policy 

At the Senate Commerce Committee on June 5, Deputy Employment Security Commissioner Richard Lavers explained how the bill’s excessively generous rewriting of state law on unemployment benefits would violate federal guidance, putting the state out of compliance with U.S. Department of Labor policy and causing the loss of federal money.

The bill lets an employee remain eligible for unemployment benefits if he or she “leaves employment due to a reasonable risk of exposure or infection, including self-quarantine, or to care for a family member, and either does not intend to return to the employer or the employer will not allow the individual to return.”

Federal guidance states that employees able and available to work are not eligible for benefits. The bill would let employees collect unemployment if they are able and available, and even if they do “not intend to return to work.”

“This one is not allowed,” Lavers told the committee. The eligibility provision “would also have what I assume is an unintended consequence of taking people that are now eligible for federally paid PUA and putting them on state UI that would have to be paid out of the state trust fund.”

That is, the bill moves people from federal Pandemic Unemployment Assistance to state-paid unemployment insurance benefits, causing a more rapid depletion of the state Unemployment Trust Fund, which is already expected to run out of funds by the end of November.

The bill also would make employees automatically eligible for unemployment benefits for certain COVID-19-related reasons, again in violation of U.S. Department of Labor guidance, and eliminate the one-week waiting period before benefits start.

“The main issue is that this provision, and I’m not speculating here at all, I’m not relying upon old guidance from the federal government, I’m relying on guidance issued one month ago today issued by the Department of Labor. This provision would make New Hampshire be out of compliance with U.S. Department of Labor, and we would be out of conformity with U.S. Department of Labor,” Lavers told the committee.

“That puts our federal grant funding in jeopardy.” he explained.

Going out of compliance with federal guidance “would mean that New Hampshire employers would no longer be eligible for their 90% reduction in their federal unemployment tax obligations,” Lavers said. “This would cost New Hampshire businesses over $200 million a year…. This is what they are telling states. They are cautioning states: Don’t do this.”

The committee’s response to these warnings was to insert a self-destruct button into the bill.

“In the event the United States Department of Labor provides a written notice to the New Hampshire department of employment security that any specific statutory change in this act will result in the loss of federal funding to New Hampshire then that specific statutory change, and that specific statutory change only, shall be inoperative,” an amendment introduced by Sen. Jon Morgan reads.

The “inoperative” clause is a case study in political cynicism. It could have one of only two outcomes. Either it makes those provisions instantly ineffective, in which case there’s zero point in passing them, or it makes them effective only for a brief period until an inevitable federal notice arrives, in which case there’s zero point in passing them.

No one seems to have checked with staff attorneys to find out how the provision would work. We did.

The language does not make the provisions Lavers warned about automatically inoperative based on guidance already issued by the Department of Labor. It would make them inoperative only after the U.S. Department of Labor issues additional written notice to the state, according to legislative staff.

So the self-destruct button would be triggered only after the bill had begun to damage the economy.

This is not governing. This is playing politics with New Hampshire’s economy.

Diverting $50 million from COVID-19 relief to a state department

The political games don’t end there.

The bill directs $50 million in federal CARES Act relief money to the Department of Employment Security for the purpose of upgrading its computer system. 

But the department does not need or want the money. Its system was already upgraded with federal funds.

“New Hampshire is one of 16 states with a modernized unemployment benefits system,” Lavers told the Senate Commerce Committee on June 5. 

The department replaced its computer system in 2009 and has enhanced it every year since with federal grant money, he said. 

“We were paying benefits under the CARES Act before the CARES Act existed because of our modernized system,” Lavers said. “We do not need money for this purpose from the limited amount of money that are left in the CARES funds.”

Why in the world would Senate Democrats divert $50 million in coronavirus relief money to upgrade a computer system the that was already upgraded with federal money?

It turns out that Sen. Dan Feltes, who co-sponsored the legislation, has made upgrading that computer system part of his gubernatorial campaign. He claimed in April, without evidence, that the governor failed to upgrade the system that the department says is fully upgraded. 

More ignored warnings

The remainder of the bill is filled with provisions that senators were warned would hurt New Hampshire individuals and businesses.

Tyler Brannon, director of health economics at the N.H. Department of Insurance, told the Senate Commerce Committee that the provision mandating private insurance coverage for COVID-19 treatment and testing was unnecessary and would help unscrupulous companies at the expense of Granite Staters. 

Insurers already voluntarily cover COVID-19 testing and treatment at no cost, and the state’s emergency order mandates coverage for out-of-network providers if no in-network providers are available. 

The bill goes further to mandate coverage for out-of-network providers at any time and force insurers to cover “any out-of-network charges.”

“The requirement will allow for price gouging by out-of-network providers, and it’s likely to benefit opportunistic, out-of-state companies at the expense of New Hampshire premium payers more than it is going to benefit New Hampshire members,” Brannon explained.

His warning was ignored and the provision was left in.

Another provision extends the federal Family and Medical Leave Act to businesses with as few as 15 employees “for any employee in quarantine, or covered family member in quarantine, for coronavirus or COVID-19, or for a COVID-19 related reason, as directed by a medical provider or under government direction.” 

Not even Congress would force businesses smaller than 50 employees to bear the costs of the Family and Medical Leave Act. This provision could impose significant costs on small, mom-and-pop businesses that have only a few employees.

With a laundry list of additional costs being dumped on employers even before many are allowed to open at full capacity, the bill drew sharp criticism from business owners and groups. 

The bill “will cause a significant increase to unemployment insurance taxes right when businesses are stretched thin and face significant losses already,” Ashley Haseltine, president of the Derry Londonderry Chamber of Commerce wrote.

Chris Woods, president of Advantage Insurance in Merrimack, submitted written committee testimony that the bill “will cost NH businesses who are already struggling additional money while incenting individuals to not go back to work.”

The Senate’s only response to these warnings came Tuesday when two Democratic senators, Sen. Shannon Chandley and Sen. Jeanne Dietsch, voted with Republicans to strip a provision mandating an additional $100 a week in unemployment benefits. That provision would have cost N.H. employers $53 million through the end of 2020 alone, the Department of Employment Security estimated.

The exact costs of the bill are not clear. As with other amended bills rushed through on Tuesday, it contained no fiscal note. 

New Hampshire employers are struggling to survive an economically devastating 2020. They, and the employees they want to rehire, deserve lawmakers who take this moment seriously and who seek to help. Instead, senators are playing tricks with exploding bills and vanishing promises. 

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

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

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

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

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

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

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

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

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

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

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

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The lockdown and the government’s fragile power

In the “Merv Griffin Show” episode of Seinfeld, George hits some pigeons with his car after they didn’t fly away at the last second. “It’s not my fault,” George complains to Jerry. “Don’t we have a deal with the pigeons?”

“Of course we have a deal,” Jerry says. “They get out of the way of our cars; we look the other way on the statue defecation.”

“Right,” George says. “And these pigeons broke the deal!”

The American people have a tacit deal with their government too. The people let the government think it’s in control, as long as it doesn’t get too pushy with the enforcement, and in turn government officials get to make laws and issue proclamations as long as they provide the bare minimum of basic services like roads and adequate schools. 

This deal was never better illustrated than during the coronavirus shutdown. Across the country, governors issued stay-home orders weeks after people began staying home, ordered businesses closed after most people stopped patronizing them, and took control of public health measures as best they could. 

But after a while, it became apparent that the governors and the public had different ideas about the terms of the deal.

The people were told that the emergency orders were necessary to “flatten the curve” and ensure that hospitals were not overwhelmed with critical COVID-19 patients. But after the curve was flattened, the orders remained. 

Governors switched to talking about the importance of reducing deaths and preventing a second wave, but people stopped paying attention to the stay-home orders, which had rarely been enforced anyway. They noticed that the goalposts had moved, and they weren’t OK with that. 

Then, on Memorial Day, a Minneapolis police officer was caught on video pressing the life out of George Floyd as other officers stood by. 

The nation erupted in protest. Rioters followed the protesters. Public spaces filled with thousands of tightly packed, shouting people doing everything state governors had told, and often ordered, Americans not do. 

The unspoken message of the protests (and the riots) was clear: You are not in control; we are. (The spoken message was a different one, though it incorporated the unspoken.) 

People on social media kept asking why protesters were allowed to congregate in the midst of a pandemic governed by stay-home orders and limits on crowd sizes. Those people misunderstood the deal. The government wasn’t allowing the protests. The people had been allowing the stay-home orders. 

Since May 25, the people have been letting their governments know that stay-home orders and crowd size mandates were no longer tenable and would no longer be obeyed.

Government in the United States has a lot of power, delegated to it by the people. But both constitutionally and culturally, the people are sovereign and the people are the ultimate source of the government’s power and legitimacy. When they en masse decide they’re no longer going to take orders or accept the legitimacy of a particular agency’s authority, there’s little the government can do. As much as government officials flatter themselves that they have power and authority, it’s nothing compared to the power and authority held by the people. 

This is why Black Lives Matter protesters press so urgently for others to join them. They understand the power of the majority. They understand that a small protest can be ignored, but a massive one will motivate elected representatives to action.

One might wonder, then, why businesses are not following their customers and opening up in defiance of state orders. That’s simple. Businesses are licensed and regulated by the state and local governments. Government holds tremendous power over them. Individuals have constitutionally protected rights to assemble, speak, and protest, but there is no corresponding right to run a restaurant or hotel. Licenses and permits are permission from the government to be open. Lose that, and you lose your livelihood. 

If one wants to see the effect government power can have on human behavior, one just has to observe the differences in individual vs. business responses to government shutdown orders. Businesses, over which governments exert tremendous control, have largely complied. Individuals, over whom government has less firm control, have been defiant. 

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Police accountability starts with fixing ‘qualified immunity’

Sometimes, answers to local municipal issues are found not in our communities, but in bad law handed down in Washington, D.C. When it comes to police accountability, many improvements can and must be made at the state and local levels. But the first and most obvious step is to correct a U.S. Supreme Court decision that granted officers broad immunity from civil lawsuits. 

New Hampshire’s congressional delegation can play a vital role in this necessary effort by supporting reform of court-invented ‘qualified immunity’ for government officials who violate Americans’ civil rights.

Police officers are protected from federal civil rights lawsuits by a 1982 U.S. Supreme Court case, Harlow v. Fitzgerald. Under the concept of qualified immunity introduced in that case, government officials are immune to prosecution for civil rights violations unless a specific, nearly identical previous case existed to show that the exact conduct in question was established as a civil rights violation. 

As a 2019 case put it: 

A defendant violates an individual’s clearly established rights only when “‘the state of the law’ at the time of an incident provided ‘fair warning’” to the defendant that his or her conduct was unconstitutional. Tolan v. Cotton, 572 U.S. 650, 656 (2014) (quoting Hope v. Pelzer, 536 U.S. 730, 741 (2002)). ‘We do not require a case directly on point, but existing precedent must have placed the statutory or constitutional question beyond debate.’

In the case quoted above, Jessop v. City of Fresno, police officers allegedly stole more than $100,000 in cash plus $125,000 in rare coins during a property search. The court ruled that the officers were not subject to a federal civil rights lawsuit because there was no previous case that would have signaled to them that government agents stealing money during a search violated the Fourth Amendment, which protects against “unreasonable searches and seizures.”

“At the time of the incident, there was no clearly established law holding that officers violate the Fourth or Fourteenth Amendment when they steal property seized pursuant to a warrant. For that reason, the City Officers are entitled to qualified immunity,” the court ruled.

In effect, the court held that these officers couldn’t possibly know that stealing money during a search is an unreasonable seizure of property because no court had ever ruled that it was.

In another case being brought by the Institute for Justice, police who were searching for man launched round after round of tear gas into his girlfriend’s home, destroying it. They did this after she gave them the house keys and told them they could search the home. They opted to wreck the home rather than use the keys and walk in. (The wanted party was not inside.) 

The homeowner sued, but the court held that the police had qualified immunity because there was no previous case with similar enough circumstances to inform the officers that demolishing a home they’d been invited into might be a civil rights violation. 

Qualified immunity does not determine that a citizen’s rights were not violated. Instead, it blocks civil rights lawsuits against government officials from even proceeding. If there’s no nearly identical previous case, then the officer is presumed immune. 

The effect of this court precedent is to protect bad police officers. 

“The U.S. high court’s continual refinement of an obscure legal doctrine has made it harder to hold police accountable when accused of using excessive force,” a recent Reuters investigation of qualified immunity concluded. 

Fixing this mistake will take either a U.S. Supreme Court reversal or an act of Congress. New Hampshire’s congressional delegation could take the first step in making law enforcement officers more accountable for civil rights violations by pushing for legislation to correct this court overreach. 

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The justifications for prolonged closures are unraveling

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When the governors of Florida and Georgia announced that they would reopen their economies, the predictions of mass mortality were immediate. In April, a writer for The Atlantic hysterically labeled Georgia’s reopening plan an “experiment in human sacrifice.”

In the weeks that followed, the mortality surges never happened. 

Digging through COVID-19 mortality data this week, we noticed something that to our knowledge had not previously been highlighted. There have been fewer COVID-19 deaths in Florida, Georgia and Colorado combined (three states criticized for opening “too early”) than in New York nursing homes alone. 

The absence of a mortality surge is finally getting the attention of network TV news and other national media. ABC News’ lead medical reporter Eric Strauss tweeted on Thursday, “JUST IN: @ABC looked at 21 states that eased restrictions May 4 or earlier & found no major increase in hospitalizations, deaths or % of people testing positive in any of them. [SC, MT, GA, MS, SD, AR, CO, ID, IA, ND, OK, TN, TX, UT, WY, KS, FL, IN, MO, NE, OH.”

Politico Magazine on Thursday published a long essay on Colorado, “the blue state that gambled on an early reopening.” 

Colorado’s Democratic governor, Jared Polis, “moved to lift stay-at-home orders not only well before other Democratic-leaning states, but ahead of Republican-led Georgia, Florida and Texas,” Politico pointed out. And he had a plan. 

Polis, “instead of looking most closely at case and death counts, which lag behind the reality on the ground… focused on bringing down the virus’ transmission rate from one person infecting up to four others to one person infecting just one other person, which the state managed in April. As officials added thousands of temporary hospital beds, the governor also closely tracked the daily hospitalization rate, which had begun to slow by the time he made his April 20 announcement.”

Using realistic metrics that indicated how much of a public threat the virus was, Polis determined early that reopening could be done without causing an unmanageable surge in transmissions or hospitalizations.

The result? 

“An average of just 4.64 percent of people tested over three days ending Tuesday were positive for COVID-19. That’s the lowest since the state started tracking a three-day average of positive cases back on March 10,” Colorado Public Radio reported on Wednesday.

Colorado is still experiencing outbreaks in places like meat packing plants, prisons, a grocery store, and an office. But those outbreaks are not spiking overall transmission rates. “While outbreaks continue to occur, overall, the number of new cases reported to the state continues to drop,” the Colorado Public Radio report concluded.

Many Colorado businesses have been operating under capacity restrictions. But by identifying meaningful, reasonable metrics to guide the reopening, the state was able to begin its economic recovery early and eliminate some of the uncertainty for business owners. 

New Hampshire Gov. Chris Sununu has managed a difficult challenge with great skill and has listened to business owners, adjusting some regulations and guidance after seeing how harmful it could be. Bringing business and community leaders into the decision-making process by creating task forces has allowed a greater degree of citizen input and prevented some of the more restrictive regulations seen in other states.

Yet it is not clear what data are guiding New Hampshire’s approach and what the precise goals are. Business owners and employees remain frustrated because the state has offered little clarity on how emergency rules are to be lifted. 

Initially, the state’s emergency measures were focused on ensuring adequate hospital capacity in case of a surge of COVID-19 cases. The curve flattened weeks ago and the anticipated surge never happened. This week the governor ordered 10 of the state’s 14 overflow hospital sites closed.  

Yet the governor also extended his emergency order and the stay-home order this week. People see the numbers going down, the curve flattened, but emergency orders and restrictions remaining in place.

Asked on Tuesday what data the state is using to guide its decision-making, Health and Human Services Commissioner Lori Shibinette struggled to give a coherent answer. After being asked several times about the state’s declining infection rate, she seemed to say that the state’s goal was to prevent every long-term-care facility employee from getting infected.

“Those caregivers are part of our communities. So, as long as there’s still COVID circulating in our communities, there is always a risk of bringing it into a nursing home. And there is always a risk of negative outcomes,” she said. 

Ensuring that no long-term-care facility staff become infected cannot be the goal. It’s an impossible target. 

The governor on Friday offered some clarity, saying that “flattening the curve” to keep hospital capacity available remains the goal. With the curve already flattened, the state is striving to prevent a new surge from overwhelming the hospitals, he said.

The governor added in response to a question that the guiding data are the percent positive and the hospitalization rate. Yet state officials still have not explained exactly what the state’s target numbers are. 

Without clarity on the state’s targets, people will continue to be frustrated and anxious, and business owners will be unable to plan.

As the state’s own chart below shows, New Hampshire’s rate of positive COVID-19 test results has trended downward for weeks and is below 5%, about the same as Colorado’s. The state has 110 hospitalized COVID-19 patients, well below capacity. By any of the standard metrics, the state’s numbers have been trending in the right direction for weeks. 

 

Yet economically crippling restrictions on business and personal activity remain, imposing enormous costs. In April, the state counted 101,490 newly unemployed Granite Staters, for an unemployment rate of 17.2%. It’s worse up north. Coos County’s unemployment rate hit 22.6% and Carroll’s 24.3%. 

There’s little reason to believe that, say, Coos County retail and restaurant employees have to lose their jobs to protect the state’s vulnerable population, most of whom are elderly residents of long-term care facilities and individuals with co-morbidities. 

The overwhelming majority of New Hampshire’s coronavirus deaths (78%) have occurred in long-term care facilities, and 77% of deaths were associated with a cluster, meaning three or more cases in a single workplace or facility. 

Community transmission accounts for 20% of New Hampshire hospitalizations and 13% of deaths. Clearly, a vulnerable individual can contract the virus out in the community, get sick, and die. But the available data suggest that this risk is very low and that these individuals can be protected through less drastic measures.

Japan offers a case study. On Tuesday, Science magazine reported that Japan had ended its state of emergency, having achieved its public health goals without ever issuing a lockdown.

“It drove down the number of daily new cases to near target levels of 0.5 per 100,000 people with voluntary and not very restrictive social distancing and without large-scale testing. Instead, the country focused on finding clusters of infections and attacking the underlying causes, which often proved to be overcrowded gathering spots such as gyms and nightclubs.”

Japan lacks the legal authority to impose mandatory lockdowns, so instead it focused on educating the public about mask-wearing and avoiding the “three Cs”—closed spaces, crowds, and close-contact settings. 

These are specific, attainable, and goal-oriented guidelines. They are easy for the public to understand, and they allow business owners and employees to participate in the process. If the state publicized that the economy could fully open when X and Y metrics were met, and initiated a high-profile publicity campaign to encourage broad public participation in reaching those goals (by wearing masks, social distancing, not forming large crowds, etc.), everyone would have clear goals they could work toward together. 

Instead, the public remains in a state of suspense, waiting anxiously each week for new reopening guidelines segregated by industry. 

As we’ve recommended before, the state’s focus should be on encouraging socially responsible behavior. Many businesses that are closed or partially closed now can open responsibly, posing little risk of creating mass outbreaks, if the state devotes its resources to education, instruction, and assistance rather than categorical business lockdowns. 

The longer the state continues this slow lifting of restrictions, the worse the economic damage will be and the more frustrated members of the public will become.   

 

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