A Croydon couple on Wednesday filed a civil rights lawsuit against the state, challenging a law that forbids local school districts from paying tuition to religious schools.

In 2017, New Hampshire passed a law that allows school districts that don’t offer education at certain grade levels to send students to private schools for those grades. So if a district doesn’t have a middle school, it can tuition students to private middle schools. Except, the law specifically excludes religious schools.  

Dennis and Catherine Griffin raise their 12-year-old grandson, Clayton, in Croydon, which does not have a middle school. Clayton attends Mount Royal Academy, a Catholic school. If Clayton attended any of the private, non-religious middle schools in the area, his tuition would be paid by the school district. But because his family chose a Catholic school, the district cannot pay his tuition. 

The Griffins’ lawsuit says this prohibition is unconstitutional religious discrimination. 

The exclusion “is unconstitutional on its face,” the complaint says, because it amounts to “denying tuition payments to tuition-eligible students and their families on the sole basis that an otherwise eligible private school is sectarian.”

The U.S. Supreme Court ruled in June in Espinoza vs. Montana Department of Revenue that states cannot exclude religious schools from public education programs just because the schools are religious.  

“In light of Espinoza, states like New Hampshire cannot deny tuition to families who live in choice towns and who choose to send their children to religious schools,” said Tim Keller, senior at the Institute for Justice, which is representing the Griffins. “The Supreme Court could not have been clearer when it said that while ‘[a] State need not subsidize private education[, ] once a State decides to do so, it cannot disqualify some private schools solely because they are religious.’”

The Griffins hope the courts will recognize the state law as unconstitutional under Espinoza and allow the district to pay Clayton’s tuition. 

“We’ve chosen what we believe is the best school for our grandson,” Dennis Griffin said in a statement released by the Institute for Justice. “It’s not fair that we can’t receive the same support that other families in the town receive just because his school is religious. We hope that New Hampshire courts will follow the direction of the U.S. Supreme Court.”

Gov. Maggie Hassan vetoed a similar tuition bill in 2016, saying it was “unconstitutional” because it didn’t prohibit money from going to religious schools. In Espinoza, the Supreme Court reached precisely the opposite conclusion.

New Hampshire’s tax credit scholarship program, which lets businesses and individuals take business tax credits for donations made to certain approved scholarship programs, includes religious schools. 

The language prohibiting tuition money from going to “sectarian schools” was taken from a provision in New Hampshire’s constitution that prohibits tax money from going to such schools. That 1877 constitutional amendment, known as a Blaine amendment, was one of many passed nationwide in a wave of anti-Catholic fear after the Civil War. 

In Espinoza, the Supreme Court effectively nullified these amendments, holding that they amounted to unconstitutional religious discrimination. 

NOTE: This post, originally published Aug. 28, was updated on Aug. 31 to add the final numbers for the month. 

 

August has recorded New Hampshire’s lowest numbers of COVID-19 infections, hospitalizations and deaths since May. The dramatic, summer-long decline in all three metrics occurred as the state reopened its economy. But it has been hard to see by looking only at the daily reporting.

Media reports focused on daily snapshots or cumulative totals have masked the decline. Looking at the monthly trends shows just how sharply and quickly the state’s numbers have fallen.

As students return to school and restaurants expand indoor seating, New Hampshire has fewer than 1,000 infections for the month, fewer than two dozen hospitalizations, and fewer than 20 deaths. August saw large drops in all three categories, but especially in hospitalizations and deaths, which both fell by 90% since their peaks in April and May, respectively.

The state does not break down its numbers by month, so the Josiah Bartlett Center for Public Policy created month-by-month graphs to see how infections, hospitalizations and deaths were trending over the summer. 

We found that new infections peaked in May with 2,505. New hospitalizations peaked in April, with 213. New deaths peaked in May, with 176. 

Since May, the state has experienced a substantial decline in all three metrics. 

By the end of August, New Hampshire experienced a 72% reduction in infections and a 90% reduction in both hospitalizations and deaths since their peaks in April and May.

 

The drop since July has also been sharp. The state had 128 new hospitalizations in July. It recorded only 21 new hospitalizations in August. The state had 44 deaths in July. It has recorded only 17 deaths in August. The drop in infections was much smaller. They fell from 801 in July to 692 in August. In percentage terms, infections fell by 14%, hospitalizations by 84% and deaths by 61% from July-August.

The Sununu administration has acted cautiously by lifting economic restrictions in a slow and methodical manner, which may have helped to slow the spread of the virus during the reopening period.

The numbers trend shows that no additional restrictions are warranted at this time and that remaining restrictions should be reconsidered. 

It’s worth noting that as the governor began lifting economic constraints in May, many predicted a huge summer surge in infections, hospitalizations and deaths. Instead, the opposite happened. As the economy reopened, infections, hospitalizations and deaths all fell. 

As we pointed out last week, the state still has not experienced a single outbreak at a day care center, restaurant or shopping mall. As of August 31, only six people were hospitalized with COVID-19 in the state. 

That is not to say that the virus has disappeared or is not a concern for some people. Just over one fifth (21%) of infections have been traced to community transmission, according to the state, showing that there is some risk of catching it out in public.

It’s possible that Motorcycle Week changes the data or that cold weather brings a resurgence in infections and fatalities. But a realistic look at the data currently available shows cause for optimism and additional reopening measures, not pessimism and further restraints on economic and personal activity. 

 

 

For months, Democratic gubernatorial candidates Dan Feltes and Andru Volinsky have criticized Gov. Chris Sununu for not issuing an emergency order mandating that people wear face masks.

As new cases have declined, the Democratic primary rivals have continued to press for a mandate, with Volinsky even hinting at masses of infected outsiders streaming over the border and spreading the virus in New Hampshire.

“As Gov. Chris Sununu has chosen to open our malls, with hordes of Massachusetts shoppers coming from areas of concentrated contagion, we need to be even more careful to limit the spread of the virus. It is the cost of doing business. No shirt, no shoes, no mask, no service,” Volinsky wrote in May.

Yet state data tracking the dates people contracted the illness show a steady decline in new COVID-19 cases since early May, when shopping malls reopened. Though restaurants reopened for indoor dining a month later, new confirmed cases continued to fall.

May’s daily high was 73 new cases, hit on May 12.

June’s high was just under half that number, 36 new cases, hit on June 1 and June 12.

July’s high was 37, hit on July 22.

Since July 1, New Hampshire has had only a handful of days with 30 or more confirmed new cases, and in August cases have continued to decline overall. (August numbers could later be revised pending test results.)

As of August 20th, New Hampshire had a total of 255 confirmed, active COVID-19 cases and 11 hospitalizations.

Out of a population of 1.36 million people, 11 — or .0008% — are hospitalized with COVID-19 and 255 — or .02% — are confirmed to have the disease.

Not a single municipality in the state has even 30 confirmed cases. Only five have confirmed, active cases in the double digits: Manchester has 29, Nashua 17, Salem 11, Bedford 10, and Derry 10.

Of New Hampshire’s 234 municipalities, 95 (40%) have zero active cases, and 74 (32%) have between one and five active cases.

Without a statewide mask mandate, and with only eight municipalities having passed their own mandates, 72% of New Hampshire’s towns and cities have fewer than five active COVID-19 cases, and only five municipalities (2%) have more than nine active cases.

It’s possible that the warm weather has played a role. Yet New Hampshire has not reported a single outbreak at day care centers, restaurants or shopping malls, three indoor businesses that many people worried would facilitate rapid virus spread.

In New Hampshire, clusters have been the biggest health threats. The state has identified clusters as the largest source of infections (36%), hospitalizations (35.6%) and deaths (82.7%). Gov. Sununu’s order last week for mandatory mask use at planned events of 100 or more people was intended to reduce these clusters.

The case for an individual mask mandate in general, however, is much harder to make based on the state’s numbers.

Masks have been shown by multiple studies to be effective in slowing the spread of the novel coronavirus. The Josiah Bartlett Center for Public Policy has recommended voluntary mask wearing along with a state public relations campaign to encourage it.

But a statewide mask mandate is clearly unnecessary to achieve the state’s goal of maintaining enough hospital bed capacity to handle a surge in COVID-19 patients.

New Hampshire has more than 300 Intensive Care Unit beds (including surge capacity), and only 11 actively infected patients.

As the state’s economy has slowly reopened, infections, hospitalizations and deaths have fallen. State-imposed business restrictions may have played a role, along with businesses’ own rules and a general, voluntary acceptance of mask wearing as a social norm.

What played no role was an emergency order compelling citizens to wear masks. It seems strange that the demand for a mandate doesn’t fade along with the state’s dwindling infection and death rates.

Charter schools increase the average quality of traditional public school teachers by providing high-quality, unlicensed teachers an easier pathway into the field, a new paper published by the National Bureau of Economic Research concludes. 

“Because the fixed costs to participating in the charter sector are low, teachers are able to explore their taste for teaching before committing to fixed costs (licenses). This in turn generates positive selection on the quality of teachers entering public school careers,” conclude economists Jesse Bruhn of Brown University, Marcus Winters of Boston University and Scott A. Imberman of Michigan State University. 

Looking at Massachusetts public charter schools, the economists discovered that charter schools exhibited a U-shaped teacher attrition pattern, with high-performing teachers and low-performing teachers both tending to leave at high rates. But the destinations of the high-quality and low-quality teachers were polar opposites. 

Unlike in traditional public schools, low-performing charter school teachers tended to leave teaching for other fields. By contrast, high-performing charter school teachers tended to pursue licensure and transfer to a traditional public school. 

The authors conclude that the low barrier to entry for becoming a charter school teacher attracts people who are interested in teaching but who are not ready to commit to getting a four-year teaching degree and a state license. 

By offering a quick on-ramp into the teaching profession, instead of a wall that takes years to climb over, charter schools are able to attract talented teachers who otherwise would never enter the field. Once they decide to stick with teaching, they then pursue licensure and move to traditional public schools, which typically offer higher pay and more generous benefits. 

In short, charter schools perform a valuable public education service by weeding out poor-performing teachers and channeling high-performing ones into traditional public schools. 

Bruhn, Winters and Imberman write that “charter schools tend to hire unlicensed teachers who are ineligible to teach in the public sector and then there emerges a mobility pattern such that the least effective charter school teachers are more likely to exit teaching while effective teachers are more likely to obtain a license and move into the traditional public school sector. This pattern of results suggests that charter schools create a positive externality for local public schools by increasing the average quality of the labor available to them.”

Charter schools are public schools that are operated under a contract, or “charter,” with the state or a local school district. They are not subject to district-negotiated teacher union contracts or many state regulations that dictate how public schools are to operate. That gives them the flexibility to pursue alternative management practices. 

The authors note that rigid employment restrictions at traditional public schools likely make traditional public schools less, not more, effective.

“Employment restrictions embedded in collective bargaining agreements, administrative policies, and legislation may inhibit public school effectiveness by limiting their ability to retain effective teachers and remove ineffective teachers (Goldhaber & Hansen, 2010; Staiger & Rockoff, 2010; Cowen & Winters, 2013),” they write.

By contrast, charter schools that aren’t subject to rigid employment restrictions have found ways to recruit very high-performing teachers into the profession while pushing low-performing teachers out. 

The two candidates seeking the Democratic nomination for governor are engaged in a heated dispute over natural gas. Though both support transitioning to 100% “clean energy,” state Sen. Dan Feltes would use natural gas in the transition; Executive Councilor Volinsky would not.

Feltes would rely on natural gas as a bridge fuel between dirtier-burning fossil fuels (coal and oil) and energy sources that emit no greenhouse gasses.

Volinsky opposes the use of natural gas in any circumstances. He portrays any use of natural gas as a win for fossil fuel companies and a loss for the environment. 

The historical record shows the opposite to be true. 

Last year, the International Energy Agency released a report on the environmental benefits of replacing coal with natural gas, showing that the switch has produced enormous environmental benefits. 

“Since 2010, coal-to-gas switching has saved around 500 million tonnes of CO2 – an effect equivalent to putting an extra 200 million EVs running on zero-carbon electricity on the road over the same period.” (EV = electric vehicle.)

Continued replacement of coal with natural gas would produce further emission reductions, the IEA report concluded. 

“Given the time it takes to build up new renewables and to implement energy efficiency improvements, this also represents a potential quick win for emissions reductions. There is potential in today’s power sector to reduce up to 1.2 gigatonnes of CO2 emissions by switching from coal to existing gas-fired plants, if relative prices and regulation support this potential. The vast majority of this potential lies in the United States and in Europe. Doing so would bring down global power sector emissions by 10% and total energy-related CO2 emissions by 4%.”

The IEA report found that “on average, coal-to-gas switching reduces emissions by 50% when producing electricity and by 33% when providing heat.”

In New Hampshire, coal is still used to produce electricity during periods of peak demand in summer and winter. The state has two of the only three remaining coal-fired plants in New England. Relying on natural gas instead of coal for those peak-use plant firings would bring a quick 50% drop in emissions during those periods. 

This emissions reduction would not require waiting for green energy production to scale up. It can be had just by increasing the use of natural gas, which emits almost 100 pounds less carbon dioxide per BTU than the cleanest-burning coal. 

Aside from electricity generation, more natural gas would help New Hampshire reduce its reliance on heating oil, which emits 44 pounds more carbon dioxide per BTU than natural gas. Two-fifths of New Hampshire homes are heated with oil, the second-highest portion in the nation (Maine is first.) 

More natural gas distribution lines would provide more homes with the ability to switch from oil to gas, which is both cheaper and cleaner. Consumers would save money and reduce emissions. But these distribution lines are routinely opposed by environmental activists.

Natural gas was made cheap and plentiful by the fracking revolution, which was a private-sector innovation no government regulator had thought to prevent. Yet the cleaner fuel often can’t get to consumers because of regulations and political activism, forcing New Hampshire to rely on dirtier coal and gas. 

Sen. Feltes is right that using more gas now would reduce both emissions and consumer costs. This is not theoretical. Government data show that it’s already happened.

From 1990-2017, New Hampshire’s energy-generated carbon emissions fell by 8.4% and the carbon intensity of the state’s energy supply fell by 29%, U.S. Energy Information Administration data show. 

The market-based transition to natural gas explains the bulk of that reduction, with a slower growth in renewable generation explaining a smaller portion. 

As regional power grid operator ISO New England states in its most recent report on New England’s energy mix:

“When the wholesale markets opened to competition, private companies invested billions of dollars in the development of natural-gas-fired power plants because they used advanced technology that made them run efficiently; were relatively inexpensive to build, site, and interconnect; and their lower carbon emissions compared to coal and oil helped the region meet state environmental policies. As nearby shale gas emerged as an inexpensive and plentiful fuel resource in the 2008 timeframe, natural gas generators became the go-to resource for New England, clearing as the largest resource type in the market year after year. Nearly half of the region’s electric generating capacity uses natural gas as its primary fuel (about 15,000 MW), and natural-gas-fired power plants produce about 40% of the grid electricity consumed in a year.”

The chart below, from ISO New England’s report, shows how natural gas grew into the region’s dominant energy source, pushing out dirtier-burning coal and oil. 

Aspiring to end the use of fossil fuels is fine. A realistic approach will get us there faster than one based on green fantasies. 

Innovation is making alternative energy sources cheaper and is improving battery technology. Some day, we might have the ability to generate large amounts of wind and solar power and store it for use in cloudy and windless periods. But tomorrow won’t be that day. 

In the meantime, natural gas is reliable, storable, affordable, and cleaner than other fossil fuels. There is a lot to dislike about Feltes’ energy plan, but to his credit he recognizes the practical environmental gains that can be made by relying on natural gas for now. 

In the centuries since its capital was dubbed the Cradle of Liberty, Massachusetts has decayed into a nest of Puritanism brimming with monarchical arrogance and colonial pretensions. Its corrupted culture breeds scolds, meddlers and progressive tyrants with a boundless evangelical zeal to reform — and tax — the great, unwoke masses. And every time they look north to New Hampshire, they see land ripe for colonization.

In 1976, Massachusetts sent tax agents onto New Hampshire’s sovereign (and sacred) territory — our liquor store parking lots — to intimidate its own residents into paying taxes on the “use” of N.H.-bought liquor. 

In 2009, Massachusetts tried to force Town Fair Tire stores located in New Hampshire to collect and remit Massachusetts sales tax on tires bought by residents of the Bay State.

In 2018, the U.S. Supreme ruled in Wayfair v. South Dakota that states could collect sales taxes on purchases made remotely in other states, a practice Massachusetts had been striving to pioneer. 

Now, in 2020, Massachusetts has determined that it can and will collect income taxes on New Hampshire residents who work from home for Massachusetts-based employers, provided they are working from home to comply with the Bay State’s own coronavirus emergency order. 

In each of the cases before 2020, New Hampshire officials fought back. 

Gov. Mel Thomson sent state troopers to the liquor stores to harass Massachusetts tax collectors. 

Gov. John Lynch declared that Massachusetts wouldn’t turn our businesses into its tax agents, and legislators passed a law to that effect. 

Gov. Chris Sununu said in 2018: “If they think we are just going to take this without a fight, well then they have another thing coming” and called a special legislative session to protect New Hampshire businesses. Legislators failed to act, only later passing a watered down law, sadly. 

But now, the reaction is not nearly so bold. Gov. Sununu announced an investigation, and Democratic gubernatorial candidate Dan Feltes issued a joint statement with Senate Finance Committee Chairman Lou D’Allesandro that reads like a petition to the king from two submissive courtiers. 

Feltes and D’Allesandro write that “we respectfully encourage you to withdraw the tax rule change penalizing New Hampshire residents who now work remotely due to COVID-19.”

Respectfully encourage? Massachusetts is reaching over our border to tax our residents’ income. For a state with no income tax, that cannot stand. Things that cannot stand must be stopped, not asked politely to please consider no longer standing.

As tax attorney Bill Ardinger told New Hampshire Journal this week, Massachusetts is on shaky legal ground here. Even if Massachusetts revenue officials had a stronger legal case, New Hampshire should challenge it immediately on the elementary grounds that New Hampshire residents working in New Hampshire owe not one red cent to the Colonial Empire of Massachusetts.

And any Massachusetts pooh bah who says otherwise can take a swim in the Charles. 

Massachusetts’ long history of aggression against New Hampshire’s sovereign territory leaves no doubt about the proper action. New Hampshire needs to punch it in the face and tell it to scram. (Metaphorically, of course.) 

No one will defend New Hampshire but New Hampshire. And there’s only one way to do it: swiftly and forcefully. 

After 45 days of study, the governor’s Commission on Law Enforcement Accountability, Community and Transparency on Friday recommended that New Hampshire spend a lot more time studying police practices and accountability. 

The anti-climactic report did contain some immediate action items, including:

  • Increase the N.H. Police Standards Training Council staff 
  • Abolish the part-time police academy; 
  • Create memoranda of understanding between school districts and law enforcement agencies that would guide the behavior of school resource officers;
  • Standardize the state’s required annual police training;
  • Double the minimum hours of annual training and including issues such as bias and diversity and use of force training;
  • Increase scenario-based training;
  • Provide the Ethical Policing is Courageous (EPIC) and Active Bystandership Law Enforcement (ABLE) training developed by the New Orleans Police Department;
  • Adopt uniform training for SWAT teams that includes mental health and de-escalation training;
  • Adopt nationally accepted standards for school resource officer training.

However, the report stopped short of recommending broader reforms such as repealing laws that grant police immunity from civil lawsuits, barring union contracts from including procedural protections not afforded average citizens accused of crimes, making police discipline files public, and mandating the use of body cameras. 

It’s surprising and disappointing that such relatively obvious and uncomplicated fixes, some of which we recommended in our police reform proposal this month, were left out.

The commission recommended further study of six issues, including the collection of non-biased data during police interactions, the use of qualified immunity, the use of choke holds, and the provision of mental health service responders instead of law enforcement for 911 calls.

To pursue the ongoing study of these important issues, it’s critical that the state lean heavily on community members who do not have law enforcement backgrounds. There’s a real risk that study committees peopled largely with law enforcement professionals would lack the outside perspective necessary to conduct impartial and unbiased reviews. Law enforcement input is essential, but it should not dominate the process. 

The published record of the commission’s work reveals that members affiliated with law enforcement offered informed and insightful proposals for improving training and standards. Without their input, these positive reforms might have been overlooked. Yet many of the more aggressive proposals for achieving large gains in accountability were made by members not affiliated with law enforcement. Unfortunately, a lot of those proposals were not included in the commission’s final report. That leaves a large opening for lawmakers in next year’s session and for local governments starting this summer.  

If you want to become a police officer in New Hampshire, you have to undergo 684 hours of training at the N.H. Police Academy. That’s less than it takes to become a licensed barber, and less than half as long as to become a cosmetologist. 

Most people probably don’t think of police as being subject to occupational licensing, but that’s what the training and certification process amount to. And the level of training required to become a police officer is much less than is required for people entering many other occupations, none of which carry a gun and have the authority to use lethal force.

State law requires barbers to have 800 hours of training at barber school or 1,600 under the supervision of a licensed barber. We could be wrong, but we’re pretty sure no one’s ever been gunned down on the street by a hair dryer.

To become a cosmetologist requires “1,500 hours of training in a school of cosmetology” or 3,000 hours over two years under a licensed cosmetologist. 

That is, it takes 220% more hours of training to become a licensed cosmetologist in New Hampshire than it does to become a police officer. 

It takes a bachelor’s degree and 900 internship hours to become a licensed dietician.

It takes a four-year degree and three years of supervised professional experience to become a landscape architect. 

It takes 600 hours to become an esthetician, just 88 percent of a police officer’s required hours.

Either the required training period for police officers is low, or that of many other licensed occupations is far too high. Or both. 

One prospective to keep in mind when thinking about these requirements is that the state has an interest in maintaining a relative low barrier to entry for police officers. It’s hard enough to recruit officers in some communities. Raise the bar too high and artificial shortages will result.

Established and licensed occupations, on the other hand, have a strong incentive to erect high barriers to entry to reduce competition and artificially inflate wages. They regularly petition the Legislature to increase licensing requirements to produce these two effects. 

Additional hours of police training may or may not be needed. But when those hours are compared to training requirements in other occupations, it’s obvious that the discrepancy cannot be explained by the relative danger to the public posed by the particular occupation. The state needs to do more than rethink police training requirements. It needs to rethink the way it approaches all occupational license requirements.

Gov. Chris Sununu signed a bill this week to make permanent the emergency changes expanding telemedicine services. The restrictions on telemedicine were not primarily to protect patients. They were to protect medical providers from competition. When the state makes it illegal to see a Boston doctor via video, patients have to see their local physicians. 

Prohibitions on the practice of telemedicine are an extension of occupational licensing laws. Everyone knows you have to have a state medical license to practice medicine. But licensing laws also have prevented people from consulting online with doctors who are licensed in other states, even though technology makes this easy.

The percentage of occupations that require a state license has exploded, going from about 5% in the early 1950s to about 20% today. Economists have suspected that the growth in state occupational licensing laws has contributed to the decline in American mobility. If you’re licensed in one state, moving to another state can mean starting the licensing process all over again, as many states don’t recognize other state licenses. 

A study published this week by the National Bureau of Economic Research supports that theory, concluding that licensing could account for about 8 percent of the decline in mobility. 

Researchers Morris Kleiner of the University of Minnesota and Ming Xu of Queens University studied occupational license requirements in U.S. states from the 1980s through 2016. They found that “licensed workers are 24% less likely to switch occupations and 3% less likely to become unemployed in the following year.”

As they wrote, “occupational licensing has a strong and negative effect on worker labor market flows, but is associated with higher wage growth, whether a worker is staying in a licensed occupation or switching into a licensed occupation.”

The connection to higher wages has been well established. When the state erects a large barrier to entry for an occupation, thus restricting the supply of practitioners, compensation for that occupation rises. Who pays for that? Consumers do. And the costs outweigh the benefits.

“Existing studies have yet to find a definitive link between licensing restrictions and their stated purpose of improving service quality,” Utah State University researchers concluded in 2018. 

Though improved quality is not evident, the barrier to entry created by licensing laws is significant. Kleiner and Xu find that “occupational licensing represents a barrier to entry for both unemployed workers (1.2% lower entrance rate) and workers who enter from other occupations (24.1% lower entrance rate).”

So not only are occupational licensing laws increasing consumer costs without demonstrating improvements in service quality, they’re also harming the broader economy by reducing economic mobility. 

This hurts New Hampshire, which relies on migration for economic and population growth. New Hampshire has the second-lowest fertility rate in the nation (behind only Vermont). A UNH Carsey Institute analysis of Census data earlier this year showed that New Hampshire would have lost population in recent years were it not for people moving here from other states. 

Occupational licensing laws, both in New Hampshire and elsewhere, make it harder for people to move here and to find work if they do. That has a negative effect on our economic growth. 

We can add this to the long list of reasons why lawmakers should reform the state’s occupational licensing laws. 

Cigarette smokers and flavored tobacco scavengers from Massachusetts produced a surge of New Hampshire tobacco tax revenue that almost single-handedly prevented a business tax increase, preliminary, unaudited state figures suggest.

State tobacco tax collections rose significantly in March, April and June, putting tobacco tax revenue $14.5 million (7.3%) higher than budgeted and $13.7 million (6.9%) higher than last year, according to the Department of Administrative Services’ June revenue report. 

Revenue from the federal tobacco settlement was $2.9 million above plan, for a total tobacco-related increase over budget projections of $17.4 million. Preliminary, cash figures suggest that the state missed triggering an automatic business tax hike by $15.35 million. 

In the last state budget, lawmakers included a provision that would trigger automatic business tax hikes if state general and education fund revenue fell at least 6% below projections. Based on June’s cash figures, revenues appear to have fallen 5.4% below projections. These are preliminary figures, however, and are subject to revision when adjustments are made based on the state’s later, more thorough accounting of the year’s revenues.

If these figures hold, business owners could reasonably thank smokers and Massachusetts lawmakers for helping to prevent those automatic tax hikes. Tobacco tax revenue was 34.6% above budget in June, 34.9% above budget in April, and 10% above budget in March.

Department of Revenue Administration staff say those increases are most likely caused by smokers stocking up for the first lockdown and in anticipation of a second lockdown, combined with Massachusetts residents crossing the border to buy flavored tobacco. 

Massachusetts banned the sale of flavored tobacco products, including flavored snuff and chewing tobacco, effective June 1. In addition to a cigarette sales surge, state tobacco tax data show a large increase in smokeless tobacco sales, particularly snuff, in June. 

Sales of what the state classifies as “other tobacco products,” meaning everything excluding cigarettes and premium cigars, have spiked in recent months, surpassing 7% of all tobacco sales in June. 

A sizable portion of that is likely related to the Massachusetts ban on flavored tobacco products. In addition to flavored smokeless tobacco, the ban also includes menthol and other flavored cigarettes as well as flavored vaping products. 

New Hampshire budget writers expected to supplement state revenues this year by applying the tobacco tax to electronic cigarettes. Last year, legislators expanded the tobacco tax to cover e-cigarettes, even though there is no tobacco in e-cigarettes. 

The tax went into effect on January 1, but it has produced less revenue than expected. By the end of the state’s 2020 fiscal year on June 30, taxes on e-cigarettes had generated just $1.2 million. 

Legislators budgeted $5.7 million in revenue from e-cigarette sales for Fiscal Year 2021, which began on July 1. Based on the first six months of collections this year (covering the final half of Fiscal Year 2020), that projection seems unrealistic. Collections so far suggest that the state could expect to bring in less than half what it projected to take from e-cigarette sales in FY 2021.