In 2019, the state Supreme Court ruled that Nashua’s decades-old spending cap was unenforceable because it wasn’t complaint with a state law that was passed years after the cap was created. A bill approved in the state Senate on March 18 would restore Nashua’s cap, clarify that all such caps are fully enforceable, and require a supermajority vote to exclude any budget items from a tax or spending cap.

Nashua’s spending cap was approved by voters in 1993. In 2017, aldermen voted to exempt the then-$8.1 million wastewater treatment fund from the city budget. That put the fund outside the spending cap, which removed it from any spending constraint, while also creating a gap in the budget that could be filled with new spending.

Former Alderman Fred Teeboom sued the city over the move. In 2019, the state Supreme Court ruled in his case that the spending cap, which lacked an override provision required by state law, was unenforceable.

Since then, Nashua’s spending cap has been legally void. Senate Bill 52, introduced by Sen. Kevin Avard, R-Nashua, would reinstate Nashua’s cap by clarifying that all spending caps are fully enforceable.

It also would address the practice, not unique to Nashua, of removing some spending items from municipal budgets, which makes them no longer subject to voter-approved tax or spending limits.

State law already requires that tax or spending caps have an override provision, and that an override can occur only with a supermajority vote. SB 52 would expand the supermajority requirement to cover votes that exclude spending items from cap coverage, such as Nashua’s vote to remove the wastewater treatment fund from the budget. (That vote was one shy of a supermajority.)

SB 52 passed the Senate 14-10 along party lines, Republicans in favor and Democrats opposed, and is headed to the House.

The Josiah Bartlett Center for Public Policy is pleased to present a conversation with author Virginia Postrel as the March installment of its Libertas Virtual Event Series.

The Zoom conversation will be held at 12:30 on Tuesday, March 23, and is sponsored by AT&T, Sig Sauer, and Bank of America.

Virginia Postrel, editor of Reason magazine from 1989-2000, is an author who writes about economics and culture. We’ll be discussing her latest book, “The Fabric of Civilization: How Textiles Made The World.”

In The Fabric of Civilization, Postrel synthesizes groundbreaking research from archaeology, economics, and science to reveal the surprising economic and cultural impact of something we all take for granted — textiles. From Minoans exporting wool colored with precious purple dye to Egypt, to Romans arrayed in costly Chinese silk, the cloth trade paved the crossroads of the ancient world. Textiles funded the Renaissance and the Mughal Empire; they gave us banks and bookkeeping, Michelangelo’s David and the Taj Mahal. The cloth business spread the alphabet and arithmetic, propelled chemical research, and taught people to think in binary code. Join us to learn about this fascinating and overlooked history.

Postrel has been a columnist for Forbes, The Wall Street Journal, The Atlantic, Bloomberg, and The New York Times. She won the Bastiat Prize for free-market commentary in 2011. We’re very pleased she could join us for this conversation.

Reservations are $25 and can be made on our donation page. (Click on the $25 donation for the Virginia Postrel event.)

If you’d like to reserve a spot for this event, Grover Norquist in April, and our final event in May, you can click on the $60 option and save $15 on the cost of all three events.

Thank you to our sponsors!

A review of public school spending, staffing and enrollment numbers going back to the 1994-95 school year might surprise a lot of Granite Staters who have heard for decades that New Hampshire public schools have been underfunded. The truth is that spending has risen dramatically as enrollment has declined. And much of that new spending was devoted to hiring staff.

Analyzing official state data, we found that:

  • Adjusted for inflation, total expenditures in New Hampshire public schools increased by 66 percent between the 1994-95 and 2017-18 school years.
  • At the same time, public school enrollment fell by 9 percent.
  • Though enrollment was declining, the number of teachers in New Hampshire public schools increased by 23 percent between 1994-95 and 2018-19.
  • The number of non-teachers (all other staff) increased by 80 percent from 1994-95 and 2018-19.
  • The combination of a staffing surge and an enrollment decline led to smaller student-teacher and student-staff ratios. From 1995-2019, New Hampshire’s student-teacher ratio fell from 15.6 students per teacher to 12.2. The student-staff ratio fell by nearly 50%, from 20 students per staff member in 95 to 10.8 students per staff member in 2019.
  • The large spending increases did not produce large increases in average teacher salaries, however. Current spending per student, adjusted for inflation, increased by 77 percent between 1994-95 and 2017-18, yet average teacher salaries increased by only 1 percent, also on an inflation-adjusted basis. (“Current spending” excludes capital and some other expenses that are included in “total expenditures.” It’s the spending from which districts pay staff salaries.)

These findings come from a new report, to be released Monday. It will feature a spreadsheet that details these data for each school district in the state. Some districts experienced enrollment increases since 1994-95. (Bow, Hopkinton, Wilton-Lyndeboro, for example.) But most experienced declining enrollment. And as enrollment fell statewide, spending and staffing continued to increase. 

New Hampshire’s total expenditures per student have risen faster than the national average. 

In 2003, New Hampshire’s total expenditures per student were only slightly above the national average. The U.S. average that year was $9,299, and the New Hampshire figure was $9,802. By 2017, the U.S. average had risen to $13,834, but New Hampshire’s had grown to $17,006. (These figures are in nominal, not inflation-adjusted, dollars.)

In the last two years, there has been an increased focus on public school funding in New Hampshire. A wide variety of proposals have been floated for how public education could be funded or delivered differently. Amid all of this disagreement, one assertion that often goes unchallenged is the claim that public schools have suffered long-term reductions in overall funding. That simply isn’t true. As enrollment has declined, spending has increased. 

Any discussion of public education funding should begin by acknowledging this basic fact. 

By Andrew Cline and Robert Alt

When Massachusetts Gov. Charlie Baker declared a state of emergency on March 10, 2020, many New Hampshire residents who were commuting to the Bay State began working from home instead.

Ordinarily, Massachusetts could not continue withholding taxes from these workers’ paychecks while they were not working in the Bay State. But under a new Baker administration rule, out-of-state remote workers were required to continue paying income tax to Massachusetts—a state where they do not live, cannot vote, and no longer work.

Remote-working Granite Staters were understandably outraged. As was New Hampshire Gov. Chris Sununu. Accordingly, New Hampshire Attorney General Gordon MacDonald filed an original jurisdiction case with the U.S. Supreme Court to protect Granite Staters from Massachusetts’ unconstitutional money-grab. Fourteen other states, along with several public interest groups including The Buckeye Institute, have urged the high court to hear this consequential case.

New Hampshire v. Massachusetts should matter to anyone who works from home or employs remote workers. Teleworking has skyrocketed during the pandemic, with approximately half of Americans now working from home, according to a recent study by the Brookings Institution.

Software giant Salesforce.com, the largest private employer in San Francisco, recently announced that most of its employees would continue to work remotely after the pandemic, and that the company would shrink its physical office space, as a leading indicator that American work and commuting patterns are changing for the long term.

This shift to remote work started well before the pandemic and benefits employers and employees alike. It enables employers to attract top-notch talent from outside of their immediate geographic area. It gives employees the flexibility to locate their households in more affordable or otherwise preferable areas. And it saves everyone money.

A Global Workplace Analytics study found that those who work remotely half the time can save nearly $11,000 per year for their employers and between $2,500 and $4,000 per year for themselves.

The remote-work revolution can also help bridge the growing urban-rural economic divide. People who work from home are almost twice as likely to earn a six-figure salary compared to the general population, and small towns and rural areas stand to profit substantially if more high-income earners relocate there while telecommuting to work for employers in larger metropolitan areas.

Some government officials have lauded the shift to telework, and even encouraged it. As Gov. Baker himself said, “Now as we look to the weeks and months ahead, we’re urging businesses to continue to promote remote-work and work from home as much as possible.”

The governor, it seems, wants to have his cake and eat it too—advising Granite Staters to stay home at the same time he taxes them as though they didn’t.

If being taxed without representation weren’t enough, Massachusetts—home to John Hancock and the Boston Tea Party—wants to levy taxes for unused services, too.

Being taxed where you work makes sense only because the taxing jurisdiction generally incurs commuters’ wear-and-tear burden on its roads, utilities, community services, and infrastructure.

But absent the commuter presence and burden to pay for the same, there is no good reason—short of greed—to tax telecommuters’ wages while they have no say or vote on the tax or the election of its assessors.

If Massachusetts prevails in New Hampshire v. Massachusetts, other states and jurisdictions will quickly adopt a similar soak-the-teleworker tax policy. In Ohio, for example, cities are already taxing the income of remote workers who used to work there, but are now working elsewhere.

Income taxes should be paid by people who live or, at the very least, actually perform work there.

Working from home is here to stay. Employers and employees have both learned to adapt and adjust their budgets to meet the demands of that new normal. Governments should, too.

Unconstitutional taxes levied upon the income of those who have no vote is neither just nor sustainable given our new post-pandemic realities—and Massachusetts (of all places) should know better.

Andrew Cline is president of the Josiah Bartlett Center for Public Policy in Concord. Robert Alt is president and CEO of The Buckeye Institute in Columbus, Ohio. This column was originally published in The Lowell Sun. 

A recent New Hampshire Public Radio story about New Hampshire’s last remaining coal-fired power plant offers a great example of how left-wing activists enjoy an unwarranted ability to frame journalistic narratives, particularly on energy issues.

“New Hampshire’s coal-fired power plant, the last of its kind in New England not set to retire, will now remain online through at least 2025, despite calls from climate change activists for it to close,” NHPR reported.

To see how this framing elevates the activists’ position, just apply it to other stories involving non-leftist protesters.  Imagine public radio stories written this way…

  • “New Hampshire’s remaining abortion clinics remain open despite calls from anti-abortion activists for them to close.”
  • “Democrats raise taxes despite calls from anti-tax activists for tax cuts.”
  • Schools remain closed for in-person instruction despite calls from parents, pediatricians, and epidemiologists that they open.”

Activists on the political left are treated by the media as morally and factually correct by default. Their complaints, protests and demands are accepted as morally serious and intellectually rigorous without question.

Because of this, a handful of radical activists have their publicity stunts and press releases covered with tones of gravity and seriousness, as if their positions represent basic common sense, while the same courtesy is not given to businesses or non-leftist activists.

In this framing, the activists are treated as morally superior, or at least as representing the reasonable, generally accepted point of view.

But are they?

The real story regarding Merrimack Station’s continued existence is that New Hampshire’s last coal-fired power plant will remain available as a backup source of power for another two years to provide a hedge against the risk of blackouts during periods of peak demand — because coal has qualities essential for a backup fuel source. It is reliable, storable, cheap and available.

It’s reasonable to say that coal shouldn’t be needed in New England anymore. Cleaner alternatives could have replaced it as a source of backup power it by now.

But the availability of those alternatives has been restricted by the very activists who demand that Merrimack Station be closed immediately.

By fighting natural gas pipeline expansion proposals, environmentalist have ensured that higher-CO2 emitting coal- and oil- fired generators will continue to be needed to ensure reliability of New England’s electricity grid.

New England’s electricity market is only partially deregulated. The grid operator, ISO New England, is charged with ensuring that electricity is delivered 24/7, 365 days a year. The provision of that power is not left entirely to the market. The grid operator pays some power generators to keep generation facilities on standby in case their power is needed in an emergency.

That’s the case with the coal-fired Merrimack Station. It receives capacity payments to ensure its availability to run on (mostly) cold days when natural gas is being used to heat homes, limiting its availability to generators.

Because power is needed when all other generation is at or near max capacity and when fuel (whether that be natural gas, sun and/or wind) is restricted or unavailable power has to come from a source that can be “dispatched”—coal, oil or pumped storage (hydro) .

Nuclear Power is emissions free and is a highly reliable workhouse that operates at very high capacity factors. But nuclear plants have been expensive to build, in part because of regulations and court cases brought by activists. Environmental activists have successfully restricted the supply of nuclear power in New England by using activism and legal challenges to prevent the creation of new reactors and to get existing ones shut down.

Natural gas, which burns cleaner than coal, might be able to fill the gap on peak demand days. But as ISO New England has pointed out for years, supply and storage constraints make this risky.

Natural gas plants rely on just-in-time delivery of gas. As mentioned above, environmental activists have successfully blocked the pipelines, import terminals and storage facilities that would make natural gas a viable replacement for coal for emergency power. This shortage makes it too risky to rely solely on natural gas as a backup source during periods of peak winter demand.

In general, natural gas is cheaper than coal as an everyday fuel source, thanks to fracking (which environmental activists also oppose). But on very cold winter days and in late summer heat, when natural gas is in high demand, prices rise, and coal becomes competitive on the market.

Wind and solar power operate approximately 30% and 15% of the time because they require favorable weather conditions which are often unpredictable. Without massive storage capacity, which is very expensive and not practicable for large-scale deployment, wind and solar aren’t capable of being dispatched to respond when the grid is stressed.

Coal can be stored on site in large quantities cheaply. With a shortage of other storable, reliable backup fuels, coal can be used in a pinch. That’s exactly how the Merrimack Station plant is being used.

The grid operator is charged with ensuring both reliability and market efficiency. That makes coal a go-to source of backup power for the few days a year in which natural gas supplies are being diverted from electricity generators to home heating. The grid operator essentially accepts higher carbon emissions for a few days a year for the purpose of ensuring that power is available.

That tradeoff is at the heart of the issue. The activists prioritize emissions over all else. They don’t accept the tradeoff. But their position is extremely risky and costly.

The power grid operator prioritizes reliability over emissions for good reason. It saves lives.

If New Englanders were asked whether they’d be willing to trade a few days’ a year worth of higher carbon emissions for a guarantee that they don’t run out of power on the coldest winter and hottest summer days, most would probably say yes without hesitation.

Radical environmental activists already have made clear that they don’t accept this tradeoff. They might not care that the tradeoff actually involves a higher risk of blackouts. But the grid operator does and is committed to hedging against that risk.

Given the alternatives, isn’t hedging against the risk of blackouts the more morally serious and responsible position?

That brings us back to the question at the beginning.

Do radical green activists really have the morally superior position here?

The answer is pretty clearly no.

It’s not an ideal tradeoff, but given the limited options available, keeping the state’s last coal plant open to ensure that people don’t freeze in winter or overheat in summer is not the unreasonable or radical position.

Those who would risk winter and summer power outages to achieve an insignificant reduction in carbon emissions should be treated with at least the same skepticism as those who want to keep power readily available.

President Biden on March 2 announced a goal of administering at least one vaccine to every educator in the United States by the end of the month. The head of the American Federation of Teachers praised the announcement, saying, “vaccinations are a key ingredient to reopening schools safely.”

But that’s not true. 

A vast and growing body of scientific data show that schools are not major sources of COVID-19 transmission and that neither students nor teachers are at high risk of contracting the coronavirus in school buildings. 

We listed many of these studies when we wrote about this issue in January. In February, the Centers for Disease Control and Prevention issued guidance for safely reopening schools. That guidance listed three essential elements of safe reopening. Teacher vaccination was not on the list. It was included in a second list of suggestions for “additional layers” of prevention.

The New York Times summarized the CDC guidance this way: 

“With proper mitigation, such as masking, physical distancing and hygiene, elementary schools can operate in person at any level of community virus transmission, the guidelines state.

“The document says that middle and high schools can safely operate in person at all but the highest level of transmission, which is defined in two ways: when 10 percent or more of the coronavirus tests in a community come back positive over a seven-day period; or when there are 100 or more virus cases per 100,000 people in the community over seven days.

“Middle and high schools may open at any level of community spread if they conduct weekly coronavirus testing of students and staff members.”

The reason vaccination is not on the list of essential reopening elements is because 1) transmission in schools has proven to be very low, and 2) teachers as a group are not at high risk of infection. 

Aa we pointed out in January:

  • A British Medical Journal study of occupational risk by sector found that workers in the education sector had much lower risk of COVID-19 exposure than health care, medical support, and social care workers, and slightly lower risk than transportation workers. It should be noted that British public schools have mostly been open, unlike American public schools.
  • An occupational risk tool designed by the Vancouver School of Economics put Canada’s education sector in the medium risk category for COVID-19 exposure.

The evidence is so overwhelmingly in favor of school reopening that epidemiologists, infectious disease experts, doctors, and medical professors have been pointedly and urgently insisting that schools should reopen. 

They’ve even begun to publicly criticize teachers’ unions and politicians for ignoring the science in an effort to keep schools closed. 

Benjamin Linas, a professor of epidemiology at Boston University School of Medicine, wrote in Vox in February that he’s “losing patience with our teachers’ unions.”

Frustrated by the politicization of school openings, he wrote that “if educators and their unions don’t embrace the established science, they risk continuing to widen gaps in educational attainment — and losing the support of their many long-time allies, like me.”

On the same day President Biden announced that he would push for teacher vaccinations, The New York Times published quotes from a survey it conducted of 175 health experts regarding school openings.

“Over all, they said that data suggests that with precautions, particularly masks, the risk of in-school transmission is low for both children and adults,” the Times reported.

Among the quotes:

“We need to rely on science and not emotions to make these decisions. Expert guidance can get our children back to school safely. Keeping them out of school will result in irreparable harm to their education, particularly for minority children and those from lower socioeconomic backgrounds.”

Archana Chatterjee, Dean, Chicago Medical School

“I wish that school reopening wasn’t subject to such politicization and fear, and that decisions could be made based on data and facts. Data would suggest that children, particularly younger children, can safely go to school, and that neither the children nor the teachers are at particularly higher risk.”

Anne Blaschke, Associate Professor of Pediatrics and Pediatric Infectious Diseases, University of Utah

“This issue has been politicized, and the unions have inappropriately focused on fear and misinformation. San Francisco public schools could have been successfully reopened in August had the district, unions and others come together to support children.”

Kim Newell Green, Pediatrician; Associate Clinical Professor, University of California, San Francisco

In Canada, the UK, Michigan, Southern California, Northern California, Colorado, and the United States as a whole, doctors have urged governments to reopen schools. The World Health Organization declared back in December that “schools can reopen safely.”

Yet it’s March and many students remain stuck in remote instruction for at least a portion of their school week.

All of New Hampshire’s neighboring states have moved teachers up the priority list for vaccinations, and there is some mild political pressure from the far left for Gov. Chris Sununu to do the same. This week, he refused, and stuck to his program to prioritize vaccines for the elderly and most vulnerable. 

Sununu’s position is quite obviously the correct one, as it’s the only one focused on protecting the most vulnerable residents first, and the only one backed by the overwhelming consensus of medical science. 

No major health organization has concluded that school personnel or students must be vaccinated before schools can open safely. No study has found that school personnel or students are at high risk of infection in schools. No study has found high rates of COVID-19 transmission in schools. 

The CDC recommendation that teachers be put into Phase 1b is not backed by any research showing teachers to be at high risk, and it contradicts the CDC’s February guidance that teacher vaccinations are not an essential element of reopening. The placement in Phase 1b is not based on risk, but purely on the classification of all educational personnel as “essential workers.” 

Of course, it goes without saying that educational personnel who are age 65 or older, or who qualify for vaccination because of underlying health conditions, are vaccine eligible already based on their risk.

There is overwhelming agreement in the medical community that schools can reopen safely with basic mitigation protocols in place, and that vaccinations for returning staff and students are not a necessary precondition for reopening. 

The medical debate is over, and has been for a while. All that lingers is a political debate that becomes further detached from reality with every passing week.  

Coming out of 2020, New Hampshire is in better financial shape that many other states thanks to a sound revenue structure, relatively restrained spending, a strong economy, and good management, concludes a new report from the Josiah Bartlett Center for Public Policy and the Economic Research Center at The Buckeye Institute. 

“Restrained state spending, a stable tax base and a strong economy let New Hampshire weather the pandemic better than many other states did,” Josiah Bartlett Center President Andrew Cline said. “Going forward, it’s important that New Hampshire maintains this fundamentally sound position.”

While some other states had to take drastic measures to balance their budgets, New Hampshire appears likely to end the current budget cycle with a surplus while avoiding tax rate increases or large cuts to core programs.

The state’s projected budget deficit for the current fiscal year fell from $319 million in May of 2020 to just $29.8 million in February of 2021.

Because New Hampshire does not rely on relatively unstable sales and income taxes, it did not suffer the scale of revenue loss seen in many other states. For the pandemic-affected months, state revenue was down only $31 million, or 1.3%, from the prior year. 

The majority of that decline occurred during the economic shutdown last spring. Once restrictions were lifted and people felt safer going out, the economy began to recover. State revenues have come in ahead of budget projections every month since August of 2020. 

On the spending side, New Hampshire was already in a good financial position when the pandemic hit. The state entered the pandemic with a projected a budget surplus of $27.1 million for the end of the 2020 fiscal year, and $115 million in its rainy day fund. 

The governor’s imposition of cost savings measures in response to projected revenue losses, and his vetoes of tax and spending increases that would have weakened the state’s economy, helped the state’s recovery.   

As legislators get to work on the next state budget, New Hampshire is in an enviable position. A combination of spending restraint, a reliable tax base, and a strong economy limited the damage done to the state budget by the pandemic. 

The current projected budget deficit of $29.8 million is easily covered by savings wisely socked away in the state’s rainy day fund over the past few budget cycles. But that probably won’t be necessary. Revenue trends suggest that the gap is likely to be covered entirely by additional revenues.

New Hampshire’s experience during the pandemic showed the value of budgetary restraint and sound financial management. State officials should continue to find ways to cut government spending or make it more efficient so that New Hampshire can avoid debilitating tax increases and maintain its low-tax environment moving forward, the report concludes.

The report was written by Logan Kolas, an economic policy analyst with the Economic Research Center at The Buckeye Institute. The full report can be read here: New Hampshire’s Economic Recovery-Better Than Expected. 

By Shalimar Encarnacion

I am a mother of three (now adults) from Manchester, a former co-chair of the Manchester NAACP Education Committee, and a supporter of school choice. Let me tell you why.

As a Hispanic leader of color in my community, I’ve seen firsthand how many of our communities don’t have equal access to educational resources.  Today, people talk a lot about diversity, equity and inclusion. Those need to be goals in our educational system as well. Too often, the system falls short.

School choice would offer a huge step forward. It would help achieve our diversity, equity, and inclusion goals by removing barriers so our kids can reach their potential.

It would help students to succeed by letting parents put educational resources to use in the way that would best meet their child’s individual learning needs.

My path for parent advocacy in this area started when my children were having difficulty in school. Though all three of my children had childhood illnesses, such as multiple sclerosis and cancer, I want to talk about my youngest, Angel, who incidentally just so happens to also have a dark skin complexion.

Angel was always struggling. He’s very high functioning on the autism spectrum, which went undiagnosed until he was nine. He has ADHD as well and is prone to severe migraines. He started with an Individualized Education Plan (IEP) in third grade, and was later downgraded to a 504 plan in high school.

In sixth grade, he was having lots of difficulty at our local public school. When he started at the middle school, we told them about the situation and asked if they could accommodate him. They said no to our requests, and they repeatedly refused many ideas that would align with his IEP.

He would always end up having problems with the teachers and the environment. The stress would trigger his migraines and cause him a lot of anxiety, which would have him acting out of his normal behaviors. The school’s repeated response to this was to give him in-school suspensions.

His father and I pulled him from that school. With help from the Children’s Scholarship Fund, we were able to put him in St. Casimir’s. He was there in eighth grade and he did amazingly well.  It was a night-and-day difference for him.

He begged us to never send him back to public school.

But after his father took on a new job with a higher income, we no longer qualified for the amount of scholarship that made it possible for us to move him to the private high school.

Had education freedom accounts been around then, we would have been able to use our state per-pupil education money to bridge the gap between what we could afford and what we needed to send him to a high school that would meet his needs.

But those accounts don’t exist. So today, Angel is back in the public school, where he is repeating his senior year. He is struggling.

I like saying that these things don’t have to be looked at as either/or propositions. We should look to these solutions from a both/and perspective.

Public schools don’t work for everyone, the same way private schools don’t work for everyone. Everywhere you turn, there are so many choices. Yet k-12 public education doesn’t offer all students the choices that work best for them.

We should make it possible for parents to choose what works best for their child.

I’ve spoken with multiple families who say that a choice program such as education freedom accounts would help them a lot. I know families that are struggling to pay for private school out of pocket because they don’t qualify for scholarships.

A school choice option such as an education freedom account would let parents put that money toward tuition, tutoring, tech training, special education services, college-level courses, online education, or even tuition at another public school. It would give families the ability to choose the education that works best for their children and not be stuck with whatever service their district school offers, regardless of whether it works for their child.

School choice is for the children. It is the only way to provide the best option for each individual child. It is about equity and inclusion for all, especially for students from communities of color. It’s important that you can see it through that lens. The system is full of forgotten children. We can’t keep denying them options.

Shalimar Encarnacion is a mother of three from Manchester.

Gov. Chris Sununu’s proposed 2022-23 state budget cuts state general and education trust fund spending for the first time in a decade.

Strangely, this generally was not the big story in media coverage of the budget.

But it is a big story — because reductions in state spending are extremely rare.

Comparing the governor’s proposal to the current two-year budget, the governor’s plan represents a decrease in budgeted state general and education spending (not total spending — more on that later). That would be the first reduction since the 2012-2013 budget. 

How much of a decrease depends on what baseline you use. 

The governor’s budget summary shows a general and education fund spending reduction of $40.4 million, or about 0.7%. 

That’s based on actual 2020 spending and authorized (budgeted) 2021 spending. (The 2021 fiscal year ends at the end of June, so we don’t have actual spending for the year yet.) 

What the state actually spends in a fiscal year is not the same as what the state budgeted for that fiscal year. Typically, the governor manages spending so that some money is left over at the end of the year. 

In response to the pandemic, Gov. Sununu got quite aggressive about saving money, as revenues were projected to crater throughout much of 2020. 

Comparing the governor’s budget to the 2020-21 budget, the governor’s general and education spending is lower by $108 million. 

Such a savings from one budget to the next is highly unusual. Only twice since World War II has a state budget been lower than the previous budget.

Actual spending is a different story. With 4.5 months left in the fiscal year, it’s possible that the governor’s budget will spend more in general and education funds in 2022-23 than the state spent in 2020-21. We’ll have to see how the rest of this fiscal year works out. 

If you haven’t had enough caveats, here’s another. 

The budget was released Thursday and we haven’t gone through it line by line. We are looking at bottom-line totals. Perhaps a closer inspection will find details that produce… more caveats.

But looking at the bottom lines for budgeted general and education fund spending, this proposal represents a savings to state taxpayers.  

This will be confusing if you’ve seen stories that report higher spending in the proposed budget. That’s because total spending includes federal money and therefore is much larger than general and education fund spending.

Basically, the general and education funds spend money raised in New Hampshire from Granite Staters. The total state budget includes billions of dollars in federal funds.

The governor’s budget increases total spending by $712 million, or $5.6%, to $13.36 billion. 

The last time total spending went down was also in the 2012-13 budget. In that budget, led by then-House Speaker Bill O’Brien, general fund spending decreased by $536 million, or 18%, and total spending decreased by $1.2 billion, or 11%.

There’s much more to cover in this budget, of course. The governor proposed some substantial reorganizations of several state bureaucracies (including all of higher education), tax cuts (including phasing out the interest and dividends tax), a large increase in health and human services funding, and much more. We’ll do deeper dives later.

For now, the big initial takeaway is the unusual reduction in state taxpayer-financed spending.

Grappling with the consequences of a long and steady decline in students, the Manchester School District this week released plans to close the city’s oldest school, Hallsville Elementary. A consultant has recommended closing three other schools. 

In the short term, city leaders are going to have to make difficult choices, many of which have been put off for decades. 

In the long term, there is only one real solution: faster economic growth.

The problems that led to this unfortunate situation were caused in part by demographic changes. A cultural shift away from large families has driven a steady decline in child-bearing, and the long-term graying of New Hampshire’s population has shrunk school classrooms and drained communities of energy. 

Yet these are not the sole cause of the city’s woes. Poor policymaking has made manageable problems worse. 

For starters, as public school enrollment fell, school district spending continued to rise. 

From the 2009-2010 school year to the 2019-20 school year, Manchester’s public school enrollment fell by 2,595 students, a 16.4% decline, state enrollment reports show.  

But during that same time period, the school district budget grew by 22.8 million, a 14.6% increase, city budget documents reveal.

In the 2019-20 school year, Manchester taxpayers spent $22.8 million more to educate 2,595 fewer students than they did in the 2009-10 school year. 

That’s not a good deal for taxpayers. 

And the problems don’t end there. 

The city’s sluggish population growth has contributed to a stagnating tax base and a shrinking school population.

From 2000-2020, the city’s population grew by roughly 5,600 people, or about 5.3%, U.S. Census data show. (The 2020 figures are estimates.) By contrast, New Hampshire’s population grew at nearly twice that rate during the same years.

The city’s growth rate in the last 20 years represented a sharp decline from the previous 20-year period. From 1980-2000, the city’s population grew by 16,070, or 17.6%. 

The city’s growth rate is regressing to its pre-1980s doldrums. 

From 1960-1980, Manchester’s population grew by only 2,654, or 3%. In the 1960s, it actually shrank. 

Manchester has struggled for years to attract more residents. One reason can be found in the city’s housing restrictions. Regulations make it extremely difficult to build new homes, particular multi-family housing that is attractive to young couples. 

New apartment complexes are routinely opposed by city officials, who deny approvals on the false claim that new apartments will cause overcrowded schools, as if the city’s schools would be hurt, not helped, by increased enrollments. 

Relatively high taxes are another contributor. Manchester’s property tax rate of 24.66 is higher than the rates in Derry, Hollis, Hooksett, Litchfield, Londonderry, Merrimack. Nashua, Portsmouth, and Windham. 

One reason for these higher rates is, again, the difficulty in building within the city. Londonderry, generally considered a more growth-friendly community, has gained from Manchester’s general hostility to new construction. 

And a general dissatisfaction with school options has driven many families into neighboring communities, such as Bedford and Hooksett, or towns a bit farther away, such as Londonderry. 

All of these problems are linked in a way that might not be obvious if you are in charge of only one policy area — say, schools, or roads. They’re all tied to the city’s sluggish growth. 

Economic growth leads to population growth, a rising tax base, a vibrant culture, and rising government revenues. 

Without growth, a city experiences stasis or decline. Manchester’s growth is happening at such a low rate, it’s constraining the city’s ability to manage its infrastructure. 

Policies that encourage greater population and economic growth would help Manchester get out of its current predicament. And those policies have to be pursued consciously. Growth can be cultivated. 

But too often growth is taken for granted, and public officials ignore warnings that their policies will put it in jeopardy. Today, Manchester is dealing with the results of such poor decision-making.