This week, two bills that would take Education Freedom Accounts (EFAs) away from children enrolled in the program will be considered in the state House of Representatives. 

We previously summarized a group of bills that would heavily regulate the EFA program to the point that its functionality and growth would be severely curtailed. The House will vote on two of those bills on Thursday. They are House Bills 1512 and 1594. 

HB 1512 would limit funding for the EFA program from the Education Trust Fund to so-called budgeted amounts. Specifically, the bill states that Education Trust Fund payments for EFAs “shall not exceed $19,800,000 for fiscal year 2024, and in subsequent fiscal years shall not exceed the amounts appropriated for such purpose in the biennial state operating budget.”

In other words, regardless of actual enrollment, the bill would limit EFA appropriations to the sums that legislators estimate would be needed to cover EFA enrollment. Critically, the bill misrepresents the program as one whose funding is intended to be fixed annually by a set annual appropriation. It is not. Just like public schools, the EFA program’s funding is based on enrollment. 

The “appropriated” amount to which HB 1512 refers is an estimate. Existing law directs the governor to draw a warrant to cover any costs that exceed the estimate, should program enrollment prove larger than budget writers guessed. The bill would simply forbid that warrant article from exceeding the estimate, effectively capping EFA enrollment.

While presented as a measure to protect the Education Trust Fund from unanticipated withdrawals, HB 1512 is in fact an effort to prohibit the organic growth of EFAs. The bill does not address anything other than EFAs that might result in a larger-than-budgeted state education expenditure. Public schools experience fluctuating enrollment every year, and thus also pose a risk of draining more from the trust fund than was previously estimated. The number of students who have special needs or come from disadvantaged backgrounds also fluctuates annually, and increases in those numbers cause larger withdrawals from the Education Trust Fund.

The truth is that enrollment in all educational options fluctuates from year to year, and budgeted amounts are merely projections (educated guesses). Assuming that actual spending on any form of public education should align with previous budgeted guesses would be a little like assuming that election results should align precisely with pre-election polling. The budgeted amount is the guess. The actual enrollment numbers are reality. It’s not the other way around.

Lawmakers accounted for those annual enrollment fluctuations when they designed the EFA program. That’s why the EFA statute lets its funding shrink or grow depending on actual program participation. 

As written, HB 1512 would change the EFA program to a set line item in the state’s biennial budget, though that’s not what it was intended to be. Funding for the EFA program is based on enrollment, just like public school spending is. This is the appropriate way to fund both.

The main argument for this legislation is the claim that the EFA program is “way over budget.” That’s not accurate, in that the statute funds the program based on enrollment, not a set line item in the budget. HB 1512, however, would bind the program to a set budget line while failing to hold the state’s spending formula for public education to the same standard. 

Taking EFAs away from kids while costing taxpayers more

This fundamental change in EFA funding would forcibly revoke EFAs from some children who currently have them because the program has already grown beyond the bill’s proposed spending limit. 

In the current fiscal year, appropriations for the EFA program are upwards of $22 million. Those appropriations are to meet the needs of the 4,933 enrolled students, a number that’s increased by 201.7% since the program’s inception and is expected to only keep growing, as the program is popular among families who seek an alternative to their children’s assigned public school. 

The bill also would increase, not cut, total education spending. The EFA program provides a publicly funded education at a fraction of the average per-pupil expenditure for New Hampshire public schools, which is currently $20,323 from all sources, state, local, and federal. The average per-pupil adequate education grant for an EFA is $5,255. Every student who moves from an EFA back to their assigned public school costs taxpayers more money, not less. 

Finally, HB 1512 seeks to solve a problem that doesn’t even exist. The Education Trust Fund is growing, not shrinking. Despite funding both public schools and EFAs, the Education Trust Fund ended the 2023 fiscal year with a surplus of $161 million and is projected to finish this fiscal year with a surplus of $232 million. 

Moreover, since public school enrollment has been falling for the last two decades and is expected to continue declining, the resulting extra money in the trust fund (even with the budgeted limit) would simply sit there unused as more and more students leave their government-assigned district public schools and enroll elsewhere. EFAs change that, allowing those students to take their per-pupil grants with them.

Another way to take EFAs away from kids

As HB 1512 attempts to cap the finances behind the EFA program, HB 1594 would further limit those who can participate in the program.

HB 1594 would establish “an annual review and qualification to determine eligibility to participate in the education freedom accounts program.” If a participant’s household income goes over the income cap (currently 350% of the federal poverty level) in any year, then that participant would cease to be eligible for the program and would lose the EFA.

Existing law requires that the income limit be met only when applying. That was done to provide continuity for families and prevent children from being sent back to an educational environment that didn’t work for them just because their family’s income grew during their time in school. 

But HB 1594 would effectively remove an EFA student from the program if, for example, his or her single parent making the average teacher’s salary in the state earned a raise of just $5,000. 

Cloaked under the guise of reigning in a “fiscally reckless” program, these regulations are specifically designed to force children back into their assigned public schools, even though their families have decided that those schools are not the best educational environments for them. 

These bills would remove students currently using EFAs from the program, which could be a jarring or even traumatic experience for some. 

They also would reduce competition in a growing educational marketplace by hamstringing the state’s largest school-choice program—one that saves taxpayers money. (See “Bartlett report shows that Education Freedom Accounts will save taxpayer money, improve student outcomes” and  “As NH public school district enrollment fell by 30,000 students in 19 years, spending rose by nearly $1 billion.”

Ultimately, each of these bills would not just restrict the growth of the EFA program but kick children out of it who are currently enrolled. They would do this in the name of protecting the Education Trust Fund, which enjoys a healthy surplus that is projected to exceed $200 million.   

The rest of the proposed measures to restrict EFAs—HB 1418, 1592, 1610, 1654, and SB 525—are due out of committee next week.



 

Imagine you own a small entertainment venue in New Hampshire. What’s the value of an aisle seat in Row 37 on a Wednesday night in April?

Let’s say you printed the date, the time and a price of $100 on the ticket. Would that make the ticket worth $100? How about $200?

No idea, right?

You don’t have enough information to answer that question. You first have to know: 1.) Who’s playing that night, and 2.) How much are people willing to pay to sit in that seat in that venue at that time for that artist?

The number of people interested in renting that seat for two hours on a Wednesday night would vary along with the popularity of the artist. That number would be lower for a Dead Kennedy’s show than for a Dua Lipa show. (Yes, we know who Dua Lipa is. Kind of.)

Everybody understands that the value of sitting in that particular seat for any given two-hour period is not fixed. It depends on who is on the stage, when, where, for how long, etc. In other words, the value depends entirely on demand. It doesn’t matter what price you print on the ticket if that price doesn’t reflect the actual demand for that seat at that time. 

So why do so many lawmakers (and consumers) assume that ticket prices set by venue operators reflect actual market value?

Venues have a lot of information that helps them set ticket prices. But ticket prices are not the same as ticket values. And extensive research into ticket prices has shown that venues and artists routinely underprice tickets relative to their market value for many reasons, including the desire to encourage sellouts (which maximizes concessions revenue) and avoid annoying fans.

“To maximize profits a promoter wants a sell-out as this maximizes complementary revenues and introduce the ‘crowd effect,’ meaning that consumers who believe a concert will be a sell-out are more attracted to the event and demand for tickets will intensify,” Hofstra University music industry professor Terrance Tompkins wrote in the International Journal of Music Business Research in 2019.

Industry professionals confirm what researchers have found.

“Average secondary ticket prices remain close to double that of a primary ticket, continuing to show the extent to which concerts and other live events remain priced below market value,” Music Business World, an industry publication, quoted Joe Berchtold, Live Nation’s President and Chief Financial Officer, as saying in a recent earnings call.

That huge gap between the retail price of event tickets and their market value drives the growth in the secondary market. People and policymakers like to hate on “scalpers.” But there wouldn’t be much of a secondary market if retail prices better reflected market value.

Concert ticket prices have risen dramatically in recent decades, reflecting a rise in demand and a rise in disposable income among the concert-going public. But generally speaking, retail prices often remain below market value, particularly for the most popular shows.

Senate Bill 328 would try to address this gap between price and value by imposing a price cap on the secondary market. Deceptively presented as a bill to ban deceptive resale practices, its last section forbids the resell of event tickets above face value.   

That’s a price cap, and price controls are bad. Banning the resale of tickets for more than face value won’t change the actual market value of tickets for popular events. It will create shortages in legitimate secondary ticket markets and stimulate a separate black market for event tickets. 

The Federal Trade Commission looked into ticket reselling in 2019 and organized a presentation by University of Chicago economist Eric Budish, who concluded, as so many other researchers have, that this market was driven by low retail ticket prices. 

“The structural economic issue is artists/teams sometimes want to ‘underprice’ their tickets relative to what the market will bear,” Budish concluded. “This creates an incentive for rent-seeking behavior.” (That means it creates an incentive for people to buy tickets at their obviously low prices and make a profit by selling them at the market price.)

The FTC suggested that only three ticket-selling options exist:

1. Set a market-clearing price in the primary market.

2. Set a below-market price in the primary market. Much of the “real” allocation will happen in the secondary market.

3. Set a below-market price in the primary market + ban resale.

Option 2 describes the current market, which is obviously not ideal. 

Option 3 describes the market as imagined in SB 328. This is also not ideal, as it would not solve the underlying problem but would expand the unregulated black market for tickets. It also likely would do little to curtail high markups in the secondary market, as law enforcement agencies rarely waste valuable officer time pursuing ticket resellers, which resellers know. 

The best option is Option 1: setting a market-clearing price in the primary market. There’s research to show that this has highly positive effects.

Budish, the Chicago economist who presented to the FTC in 2019, later worked with Bank of America economist Aditya Bhave to study Ticketmaster’s short-lived experiment in auctioning a portion of tickets for concerts in the early 2000s. In a study published last year, they compared set prices and auction prices in the primary market to the prices for comparable tickets to the same shows in the secondary market. 

Not surprisingly, they found that auctioning tickets instead of selling them for a set, below-market price all but eliminated the gap between retail and secondary market prices. And instead of scalpers collecting the difference between the set price and the market price, the artists did. 

When fans paid the market price directly to the venue, rather than to a reseller, “artist revenues roughly doubled,” they found.

The auctions allowed fans to find the market-clearing price before resellers could, which “eliminated or at least substantially reduced potential resale profits for speculators.”

Unfortunately, Ticketmaster discontinued its auctions. Fans, unaccustomed to paying market prices at the retail level, didn’t like it. And so the secondary market continued to grow, and resellers, rather than artists, enjoyed the benefits of selling tickets for their true market value.

Auctions would be the most efficient way to find the true market value of an event ticket, but venues could get close to that value in other ways. They could raise prices for the most valuable seats at the most popular shows, charge significantly higher prices when tickets first go on sale to discourage mass reseller purchases, or delay sales until closer to the show date. 

Venues also could choose to ban resales and require purchasers to show a photo ID at the door. But this doesn’t go over well with fans. It’s much easier to demand that lawmakers prevent resellers from making a profit. 

Lawmakers certainly can pass laws making it illegal to sell tickets at market prices. But they can’t ban the laws of economics. People will find ways to sell tickets at market value. It’s better that venues do this in the primary market. If they choose not to do this, ticket purchasers will–even if legislators tell them not to. Moving market-priced tickets from the legal market to the black market isn’t good for anyone and would be the worst of all options.

As pressure builds for local and state policymakers to address New Hampshire’s severe housing shortage, some activists and lawmakers are again blaming developers rather than regulators for the state’s high rents. 

Developers are building “too many” apartments for higher-income renters, some claim. This raises rents, hurting the poor, so government must intervene to make builders reserve a certain percentage of new construction for lower-income households, the argument goes. Some also want the state to give subsidies to low-income renters. 

The idea that building more apartments raises rents has achieved the status of conventional wisdom in some activist circles. It’s done so despite it being untrue, and confirmed untrue by growing stacks of economic evidence. 

Even academics repeat the claim. A California political science professor, in a February opinion column for New Hampshire Bulletin, wrote that “construction in the high-end ‘luxury’ rental market, which drives up rents for everyone else, remains in an upward trend.”

In fact, building more market-rate apartments reduces rents for middle-and lower-income households. This has been well established in academic research for years. And recent studies have provided more detailed confirmation of the effect.

A review of recent research on the subject finds:

  • Researchers at the Upjohn Institute and Federal Reserve Bank of Philadelphia found in 2019 that new market-rate apartment buildings “decrease nearby rents by 5 to 7 percent relative to locations slightly farther away or developed later.” They made a point of stating that the evidence ran against common complaints about market-rate apartment construction. “Contrary to common concerns, new buildings slow local rent increases rather than initiate or accelerate them,” they wrote.
  • A 2020 study by the National Multifamily Housing Council Research Foundation found that a “substantial flow of new construction apartments, largely targeted to middle- and higher-income groups, has enabled the ‘filtering’ process to create affordable housing opportunities for low-income households,” as a summary of the report put it. 
  • NYU researchers in a 2018 paper sought to answer claims that building market-rate apartments raised rents. “We ultimately conclude, from both theory and empirical evidence, that adding new homes moderates price increases and therefore makes housing more affordable to low- and moderate-income families.” They also noted that housing shortages are caused by regulations, not new construction. “Despite the arguments raised by supply skeptics, there is a considerable body of empirical research showing that less restrictive land use regulation is associated with lower prices. The evidence takes many forms. A large number of cross-sectional studies show that stricter (less strict) local land use regulations are associated with less (more) new construction and higher (lower) prices.
  • A 2021 UCLA review of recent studies on the effects of building market-rate apartments found overwhelming evidence that new construction of market-rate units lowers rents. Referencing the NYU paper cited above, the authors wrote: “Since that article came out two years ago, at least six working papers have been released that examine the connections between market-rate housing production and affordability at the neighborhood level. Four of the papers conclude that market-rate development makes nearby housing more, not less, affordable. The fifth paper looks at rents across entire cities rather than at the  neighborhood level, but finds that new development causes rents to fall for units across the income distribution. Findings in the sixth paper are mixed, and offer some reason to think new development makes nearby housing more expensive. Although the papers await peer review, and readers should bear that in mind, the importance and near-unanimity of their findings makes discussing them worthwhile.”

Building luxury or higher-end apartments draws higher-income renters out of yesterday’s luxury apartments and into the new luxury apartments. Increased vacancies in yesterday’s luxury apartments attract higher-income residents who’ve been living in mid-level apartments. As new construction creates more vacancies, rents come down. That effect filters throughout the housing supply, lowering rents all the way down. Economists call this “filtering,” and it’s an effect thoroughly established in academic and industry studies of rental housing markets. 

There’s no doubt that filtering occurs when enough new apartments are built. It can’t occur, though, if government prevents developers from creating those new high-end apartments. The problem in recent years has not been the creation of too many high-end apartments, but too few.

Harvard’s Joint Center for Housing Studies pointed this out in 2020: 

“What is different about the recent dynamic is that new construction is accommodating a growing number of high-income households, but just barely. Indeed, despite the relatively high rents, the number of new apartment units being added each month is scarcely keeping up with growth in units rented out, or ‘absorbed’ by new renters. When new construction is only just meeting demand from new high-income renters, it means that, in effect, new high-end units are being rented out by new, high-income renters, rather than by current high-income renters trading up to a newer unit, and therefore fewer old units are left to ‘filter down’ to a lower-income renters.”

In other words, when developers are allowed to build more market-rate apartments, rents come down for everyone. When they aren’t, rents stay high. 

Legislators are again considering a proposal to raise the state’s minimum wage through a series of automatic annual hikes. The House of Representatives will vote Thursday on House Bill 1322, which would institute an immediate 31% increase in the state minimum wage, then compel additional increases over the next five years.

HB 1322 would require employers in the state to pay their employees no less than the following wages, or the federal minimum wage (currently $7.25 an hour), whichever happens to be higher at the time:

  • $9.50 an hour starting September 1, 2024
  • $11.00 an hour starting January 1, 2025
  • $12.50 an hour starting January 1, 2026
  • $14.00 an hour starting January 1, 2027
  • $15.50 an hour starting January 1, 2028
  • $17.00 an hour starting January 1, 2029

The bill further requires that the minimum wage be adjusted starting January 1, 2030, according to the increase in the cost of living per the Northeast Consumer Price Index put out by the Bureau of Labor Statistics in the U.S. Department of Labor. (This means, in all likelihood, the minimum wage would only keep increasing.) 

New Hampshire doesn’t have its own minimum wage. The state defaults to the federal minimum wage of $7.25 per hour. Nineteen other states either have not adopted their own minimum wages, have a minimum wage set below $7.25, or default to the federal minimum wage. All said, the federal minimum wage applies in 20 states, while 30 states and D.C. have adopted minimum wages above the $7.25 federal minimum.

With HB 1322, New Hampshire would join those 30 states and D.C. But the consequences would not be as rosy as supporters suggest.

How to make an $18 Big Mac

California and Connecticut are two of 22 states celebrated by advocates of higher minimum wages for setting high wage floors this year. It’s only February, and Californians are already bracing for their fast-food prices to jump thanks to a bump in the minimum wage to $20 an hour for fast-food workers. Business Insider reports, “To compensate for the extra cost of labor, restaurants like McDonald’s, Chipotle, and Jack In the Box plan to raise menu prices at their California stores.”

On January 1, Connecticut’s minimum wage was raised to $15.69 per hour and will adjust annually according to the federal employment cost index. Just three days later, Yahoo! Finance reported, “The recent uproar over a McDonald’s location in Darien, Connecticut, charging $18 for a Big Mac combo meal has sparked a nationwide debate on the escalating prices in the fast-food industry. Sam Learner’s viral post on X showcasing the exorbitant prices, including $19 for a Quarter Pounder meal and $17 for two cheeseburgers, has raised questions about the sustainability of such pricing in the industry.”

A 2021 New Hampshire Employment Security, Economic and Labor Market Information Bureau study found that raising the state’s minimum wage would generate similar increases in food prices here. Increasing the minimum wage to $15 an hour would lead to price levels rising by 7% in the food services and drinking places industry and 3.4% in the retail industry, the study found. 

When the government makes the cost of labor more expensive, employers have to compensate in the form of raising prices for consumers. And as prices increase at fast-food restaurants, grocery stores, and retail chains, the most vulnerable consumers are the most negatively affected. 

Who earns the minimum wage?

According to Bureau of Labor Statistics data, only about one million workers, or 1.3% of all hourly paid workers in the country, earned wages at or below the federal minimum in 2022. Unsurprisingly, minimum-wage workers tend to be young and just starting out, as workers under the age of 25 make up roughly 45% of those paid at or below the federal minimum wage, despite accounting for only 20% of all hourly paid workers. 

Proposals to raise the minimum wage typically incorporate the assumption that all workers currently making the minimum wage are stuck there for life. Given that most minimum-wage jobs are entry-level, however, it’s hardly surprising that two-thirds of minimum-wage workers earn more within a year of employment, according to the Heritage Foundation and the National Bureau of Economic Research

In 2022, according to BLS data, 1,000 Granite Staters made the federal minimum wage (almost certainly all service industry employees earning tips or individuals with severe disabilities who can’t reach productivity levels employers would typically demand). Another 4,000 made below the minimum wage. Federal law allows certain employees, such as vocational education students and full-time students working in certain fields, to be paid below the federal minimum wage. These 5,000 workers amounted to just 0.5% of the New Hampshire workforce and 1.2% of all hourly paid workers in the state. 

This small group is highly atypical in today’s job market. According to the New Hampshire Employment Security, Economic and Labor Market Information Bureau, the average entry-level hourly wage in the state is $15.36 as of June 2023. What’s more, among the bottom 10 wage-earning occupations in New Hampshire, the lowest-paying jobs are dining room and cafeteria attendants and bartender helpers, earning an average of $11.69 as of May 2022. 

The story of the minimum wage in New Hampshire is the same as it’s been for years, which is that the market has done what legislators wanted to do: lift wages in the lowest-paid occupations. In other words, raising the minimum wage in New Hampshire is the epitome of a “solution” in search of a problem. 

Increase in unemployment

Fundamentally, minimum-wage laws are a form of government-mandated price controls, which have real consequences on supply and demand. Just as price ceilings in the form of rent control lead to a decrease in the supply of housing but an increase in demand, price floors in the form of minimum-wage laws lead to an increase in the supply of labor but a decrease in the demand for it. 

As economist Thomas Sowell put it in Basic Economics, “By the simplest and most basic economics, a price artificially raised tends to cause more to be supplied and less to be demanded than when prices are left to be determined by supply and demand in a free market. The result is a surplus, whether the price that is set artificially high is that of farm produce or labor.” 

And a surplus of labor inevitably means higher unemployment. Of the 20 states (plus D.C.) with the highest unemployment rates, 16 of them have adopted minimum wages that are higher than the federal minimum wage. When the U.S. Congress was considering a bill to raise the federal minimum wage to $15 an hour in 2021, the Congressional Budget Office estimated at the time that 1.4 million workers nationwide would be put out of a job as a result. 

Such a strong correlation makes sense when you remember that a government’s edict doesn’t change basic economics. In the case of a minimum wage, just because the government forces employers to pay a certain amount of money for an hour’s worth of work doesn’t mean that the employer magically has enough money to pay all his or her employees that new government-imposed wage, nor does it mean that all his or her employees’ productivity is even worth that new wage.

The most disadvantaged workers—employees who were gainfully employed before the government made it illegal to pay them below a certain amount—are the most negatively impacted by raising the minimum wage. That’s an unavoidable tradeoff of a policy that forces employers to decide which employees he or she can afford to keep.  

High minimum wages also favor big corporations, which have deeper pockets, over small businesses. They also limit all employers’ abilities to create entry-level jobs by making it more expensive to hire lower-skilled workers.

New Hampshire boasts the lowest poverty rate (7.2%) and the sixth-lowest unemployment rate (2.5%) in the country, but those figures would worsen if the state makes it more expensive to hire. This was demonstrated by the state’s own study just three years ago. 

The state’s 2021 study on the effect of a $15 minimum-wage hike concluded that raising the minimum wage to $15 an hour would have significant negative effects. A $15 minimum wage would, by 2031, cause employment in New Hampshire to be 5,847 lower, New Hampshire’s GDP to be $800 million lower, and the state’s population and labor force to drop by 9,630 and 6,023 people, respectively, due to fewer job opportunities, than if the minimum wage had not been increased. 

The same study found that such an increase would cost employers $1.08 billion over 2019 wage costs—a 3.1% increase throughout the New Hampshire economy—borne heavily by an 18.6% increase in wage costs in the leisure and hospitality industries and a 20% increase in the food services and drinking places industry. The end result is that the lowest-wage workers would experience the highest number of job losses, concentrated mostly in the food services and drinking places, leisure and hospitality, and retail trade industries. Such reductions in employment would all but offset the mandated wage increase, as any immediate aggregate increases in personal income would eventually cancel out and begin declining due to job losses.

So, when considering raising the minimum wage, state lawmakers should ask themselves the following: What’s preferable for an employee, a job that pays less than $15 (or $17 or $20) an hour, or no job at all?

Enticing people to buy electric vehicles does not fit comfortably into the core duties of state government. And yet it’s among the list of pet causes legislators will consider subsidizing with other people’s money. 

The latest effort comes in House Bill 1472. The bill, as amended, would confiscate $1.5 million that belongs to electric utility ratepayers in New Hampshire and give it to people who buy or lease electric vehicles. The money would come from Regional Greenhouse Gas Initiative (RGGI) funds currently rebated to ratepayers. 

The bill would facilitate this wealth transfer by creating a program through which EV buyers could claim rebates of $2,000 per fully electric vehicle and $1,000 per plug-in hybrid vehicle. Eligible vehicle sticker prices would be capped at $50,000 for cars and $80,000 for trucks, SUVs or commercial vans. 

Rebates would be available to individuals making no more than $75,000 a year, heads of household making no more than $112,500, and married couples making no more than $150,00 a year. The median household income in New Hampshire, according to the U.S. Census Bureau, is $90,845. So HB 1472 would create a program through which moderate-and lower-income Granite Staters subsidize pricier-than-average car purchases for higher-income households. 

The idea behind this subsidy plan, as with most subsidies, is to use some people’s money to manipulate other people’s behavior. The beneficiary group in this case is middle-income car buyers. The victim group is everyone who uses electricity. To give middle-income car buyers up to $2,000 toward the purchase of a car that runs on electricity (mostly generated by nuclear fission or natural gas in New Hampshire), the scheme takes about $2 per year from the average residential electricity user. 

If timing is everything, then this bill is a party guest who arrives not three hours—but three years— late. The wealth transfer scheme comes amid a rapid decline in EV prices. 

Cox Automotive and Kelly Blue Book reported this month that EV prices fell 10.3% between January of 2023 and January of 2024. Prices for the Tesla Model Y, the best-selling EV in America, fell by 21% last year, from $63,000 to less than $50,000. 

EV prices are rapidly approaching price parity with conventional gas-powered vehicles. The price gap between EVs and conventional vehicles fell from 15% in 2022 to 8% in 2023 to just 4% at the start of 2024, according to industry news site CarEdge. At this rate, average EV prices could reach parity with conventional vehicle prices this year, which undermines any argument in favor of a subsidy. 

Federal subsidies and policies so distorted the EV market that automakers have built far more electric cars than consumers wanted. Though demand for EVs is rising, supply has risen far faster, leading manufacturers to slash prices to move excess inventory. Pushed to generate more EVs than consumers want at the moment, auto makers are losing billions of dollars on these government-favored vehicles. 

“Buyers looking to get a bargain on a new car might want to consider an electric vehicle,” The Wall Street Journal wrote in a news story on EV prices last November.

As a JD Power auto analyst explained to Newsweek in December: “Eventually manufacturers will achieve scale and profitability, but they are being pressured to accelerate the production of EVs at an unnatural rate due to various government initiatives.”

This is a cautionary tale about the unintended consequences of market manipulation. As lawmakers consider proposals to add a state subsidy for EVs, and subsidize other favored products or activities, it’s one worth heeding. 

A surprising divide has arisen this year over how the state should respond to increasing volumes of public records requests. On one side, we see discord and anger. On the other, unity and progress. The split shows the value of a win-win approach to solving problems.

Many officials responsible for providing access to public records say requests for such documents have become burdensome and costly. They say that gadflies and for-profit companies are filing such large requests, with such frequency, that something must be done to reduce the burden on public employees.

Two bills in the Legislature attempt remedies. The solutions they offer are diametrically opposed. Both would lighten the work load of public employees. But how they propose to do so makes all the difference.

House Bill 1002, which we wrote about previously, proposes to solve the problem by making it harder for citizens to obtain public documents. It would allow government agencies to charge up to $25 an hour for records requests that take more than 10 hours to fulfill, with the billing kicking in after the 10th hour begins. 

House Bill 1696, as amended, takes a very different approach. The bill would make it easier for municipalities to store, and the public to retrieve, public records. It would create a system for municipalities to have their records stored at the state Division of Archives and Record Management. To manage those records, and requests for them, it would fund a Local Government Records Manager position at the archives. 

HB 1696 would create a digital repository of government records that would work like “a slightly more boring version of Netflix for public records,” New Hampshire Municipal Association Government Affairs Counsel Natch Greyes told the House Judiciary Committee in January. 

State Archivist Ashley Miller told the Judiciary Committee that the bill “streamlines our record-keeping processes statewide but it allows… for quick retrieval of information.’

She went on to say that the bill would create “a convenient digital repository where their records can be both preserved and accessible to the public.”

This version of HB 1696 was sponsored by Rep. Josh Yokela, who is well known for championing broad and easy access to public records. Yet the bill has the support of the New Hampshire Municipal Association and the director of the Division of Archives and Records Management. The House Judiciary Committee unanimously recommended its passage. Why?

Rep. Yokela offered a solution that satisfied both sides. Municipal officials received help with storing public records and fulfilling requests for them. Advocates of government transparency got a searchable, always-accessible database of public records.

By contrast, HB 1002’s win-lose approach imposed costs on open-government advocates and gave government employees a new, easily abused power. Pitting the two sides against each other led to bad feelings, acrimonious debate and reconsideration of the bill. 

HB 1696 doesn’t resolve all of the concerns public records custodians have. But it points toward constructive solutions.

Instead of discouraging records requests by punishing citizens when they ask for large batches of public documents, a win-win approach would encourage better records management practices, offer help in complying with large requests, and create a less labor-intensive process for making records available. 

Creating a better way to redact non-public portions of public documents remains a challenge. But suppressing records requests is not the solution. 

As with so many problems, the answer can be found through innovation and cooperation, not power and punishment. 

By Andrew Cline and Jason Bedrick

Nearly 1 million American students participated in a school-choice program last year, according to data compiled by EdChoice. Across the country 72 choice programs operate in 32 states. And who has the most popular program in the nation? New Hampshire.

With an Education Freedom Account (EFA), parents can customize their child’s education. Families can use EFA funds for private school tuition, tutoring, textbooks, special-needs therapies and more.

According to EdChoice, New Hampshire’s EFA policy is the most popular education choice policy in the nation. It has had the most growth per capita nationwide over the past academic year—a whopping 58%. The number of ESA students has grown from 3,025 in 2022–23 to 4,770 scholarships awarded in 2023–24.

Those numbers show that a lot of New Hampshire families want an education that better fits their children’s individual needs. No New Hampshire student who needs a better educational fit should be denied access to this popular and effective program, especially because of politics.

Unfortunately, politics is keeping most students out of the program right now.

Expanding Education Freedom and Choice to All

Though EFAs were intended to be accessible to all students, legislators agreed initially to enroll only children from lower-income families. That was necessary to address concerns that the program would struggle to succeed in its early years or, conversely, would prove too popular to manage effectively.

Now that New Hampshire’s EFAs are an undeniable success, it’s time to take off the training wheels.

Currently, fewer than half of students in the state are eligible for an EFA, which is limited only to students from families that earn no more than 350% of the federal poverty level. That comes to $109,200 for a family of four—less than the average annual household income of a firefighter married to a registered nurse in New Hampshire. Three House bills this year would expand access to the program. One, House Bill 1634, would remove that income cap so that any student eligible to enroll in a K-12 public school in the state could qualify for an EFA.

That income cap suppresses participation. Though New Hampshire’s EFA program ranks first in the country in administration and popularity, it ranks just 42nd in eligibility nationwide.

Other states have been expanding educational opportunities. Over the last three years, Arizona, Arkansas, Florida, Iowa, North Carolina, Ohio, Oklahoma, Utah, and West Virginia all either enacted new universal education choice policies or expanded existing choice policies to all K-12 students.

Some people fear that universal education choice will cause a mass exodus from public schools. But that’s not what’s happened in other states. Though roughly 20 million students nationwide are eligible to participate in a school-choice program, fewer than 1 million students do.

The two largest school-choice programs in the country are Florida’s and Arizona’s. In both states, 100% of students are eligible for school choice. But only 10% of Florida students and 9% of Arizona students participate.

Here in New Hampshire, where 48% of students are eligible for EFAs, only 3% of students participate.

Education Freedom Accounts Save Taxpayers Money

Critics claim that making EFAs available to every student is unaffordable. That’s not true. U.S. Census estimates from 2022 (the most recent available) put the state’s school-age population at 189,600. How many of those students can be expected to use an EFA if all students become eligible?

Florida has the highest school choice take-up rate in the country, at 10%. Every other state with an education savings account or scholarship program has a lower take-up rate. New Hampshire’s rate of EFA use is about 3%. If we use New Hampshire’s current rate as the baseline and Florida’s as the high end, we could see a range of somewhere between 5,688 and 18,960 students enrolling in the program, though the higher number would take years to achieve and certainly would not happen overnight.

Currently, about 28% of EFA users were previous public-school students. As they received their per-pupil allotment from the Education Trust Fund before taking an EFA, they are not a new cost. Assuming the same switch rate if EFAs are expanded, a reasonable cost estimate would run somewhere between $21.5 million (at a 3% take-up rate) and $71.7 million (at a 10% take-up rate).

That might sound like a lot, but New Hampshire taxpayers spend $3.4 billion a year on K-12 public schools, and the state’s current Education Trust Fund ended the 2023 fiscal year with a surplus of $161 million. State budget officials project the Education Trust Fund to end the current fiscal year with a surplus of $232 million. Even at the high-end estimate, New Hampshire can easily afford universal EFA expansion.

And those figures don’t include local taxpayer savings. New Hampshire spends an average of $20,322 per pupil, with more than 60% of that coming from local taxation. That local portion will not be spent to educate students who use an EFA to purchase an education elsewhere.

Based on take-up rates between 3-10%, taxpayers can roughly estimate local government savings of between $86 million-$286 million were all students to become eligible for EFAs. Subtract the state costs of $21.5 million-$71.7 million and taxpayers would be looking at a net annual savings of somewhere between $64.5 million and $214 million.

Those are back-of-the-envelope calculations, but they give a general idea of the size of taxpayer savings possible if New Hampshire educates students for $5,255 per pupil instead of $20,322 per pupil. Far from a net loss for New Hampshire, Education Freedom Accounts are clearly a net gain.

School Choice Improves Public School Performance

Critics also falsely claim that school choice harms students who remain in traditional public schools. In fact, of 29 studies on the academic outcomes of public school students whose schools were faced with competition from policies, 26 found a net positive outcome for those students, one found no visible effect, and only two found a negative effect.

Moreover, the families of lower-performing students tend to be more attracted to school choice programs than those of higher-performing students. Florida State University research on Florida’s tax-credit scholarship program found that students who chose to enter the scholarship program had lower test scores in the year before they took a scholarship than did their classmates who opted not to participate. But after just a few years of using the scholarship, those students were out-performing their demographic peers.

Claims that school choice programs “cream” the best students and leave low-performing students behind in under-funded schools are false. Indeed, the reality is the very opposite: school choice benefits disadvantaged students most.

Fulfilling the Promise of Public Education

When they aren’t fear mongering about empty public schools, EFA opponents demagogue the issue by shouting that EFA expansion would have taxpayers foot the bill for educating the children of “millionaires and billionaires.”

But, of course, that’s exactly what public schools do. Every child, regardless of income, is eligible to attend his or her district public school. No one argues that the public education provided by district schools should be means tested.

Neither traditional public district schools nor public charter schools have income caps. Education Freedom Accounts shouldn’t either.

The promise of public education is that every child should have access to an education that meets his or her individual learning needs. Education Freedom Accounts help fulfill that promise by empowering families with the freedom and flexibility to choose the learning environments that work best for their children.

Expanding this opportunity to every child would improve outcomes for students, including those who prefer traditional public schools, while saving taxpayers money. For families, students and taxpayers, it’s the best option.

Andrew Cline is president of the Josiah Bartlett Center for Public Policy.

Jason Bedrick is a research fellow at The Heritage Foundation’s Center for Education Policy.

All power residing originally in, and being derived from, the people, all the magistrates and officers of government are their substitutes and agents, and at all times accountable to them.  Government, therefore, should be open, accessible, accountable and responsive.  To that end, the public’s right of access to governmental proceedings and records shall not be unreasonably restricted.

— New Hampshire Constitution, Part 1, Article 8

 

Some local government officers in New Hampshire (and elsewhere) have reported being burdened by what they view as unreasonable requests for massive caches of records. 

House Bill 1002 attempts to address these complaints. It would allow public bodies to charge up to $25 an hour for the time taken to fulfill a public records request when a request lasts more than 10 hours. The fees would not apply to the first 10 hours, but would kick in at the start of the 11th hour.

In effect, the bill would tax any public record request that public officials say takes longer than 10 hours to fulfill. 

The perverse incentive created by HB 1002 is obvious. If it becomes law, public officials would have a new incentive to take as much time as possible to answer public records requests. By expanding the estimated time taken to fulfill requests, government agencies could discourage requests they view as burdensome or annoying.

Government officials who testified in favor of the bill in Concord said it was needed to discourage frivolous, harassing and financially motivated records requests. Legislators were told that out-of-state companies request data that is then monetized, and that citizens file requests just to harass government employees.

But this bill does not narrowly target those problems. It applies a fee to any request that a governing body can stretch into 10 hours worth of work. 

The inevitable effect will be to reduce government accountability by reducing public access to public records. 

A study of high records request fees published last fall in Government Information Quarterly found that “fees are particularly problematic for certain requester types, notably average citizens and those seeking records in the public interest, and that fees may therefore obstruct the public’s ability to become informed and better self-govern.”

Lawyers and companies seeking data for commercial purposes did not see high fees as an impediment to making public records requests, according to the survey.

This suggests that the approach taken by HB 1002 would reduce government oversight while doing little to discourage financially motivated documents requests.

If harassing or overly broad records requests really are a serious problem in New Hampshire (all we have are some anecdotes), legislators can devise a more narrowly tailored remedy that does not suppress legitimate records requests made in the public interest.

Fees that apply only to data sought by commercial actors for strictly commercial purposes (which would exempt news media and citizen requests) might be an option, though it’s not at all clear that such requests are so burdensome that they require a legal remedy. 

Requests made for the purpose of disrupting government work or harassing government employees should be addressed through statutes prohibiting harassment, not by imposing fees on citizens who want access to records that, after all, belong to them.

One reason public records requests can take many hours to fulfill is that government agencies often have poor records retention practices. Citizens shouldn’t be punished for disorganization in government bureaucracies. 

Providing ready access to public records is a core government function, not an add-on. Good management involves properly organizing and staffing the agencies tasked with storing, managing and producing public records. Charging people extra for the time it takes to produce poorly organized documents will do nothing to improve the organizational efficiency of government bureaucracies and might actually discourage it. 

The core conceptual flaw in HB 1002 is that it treats public records as government property and access to those records as a burden on government employees. 

In fact, public records belong to all citizens, and government employees are merely custodians of those records on behalf of their citizen owners. 

Currently, public agencies can charge for making copies of public records. That distinction is important. Copying fees are permitted because the charge is for the duplication, not for access to the record.

HB 1002 crosses an important line. It imposes a fee just for accessing the records. That upends the relationship between citizen and government. It gives government the ability to withhold public records from any citizen who can’t afford to pay. 

“A system that puts a price on it is on its face discriminatory,” Rep. Marjorie Smith said when opposing the bill a House Judiciary Committee hearing earlier this month. “It is going to, on its face, hurt people at the lowest end of the income scale. It is going to set up different classes of people as to whether or not you’re entitled to get information.”

The decline of print journalism has decimated newsrooms in New Hampshire. With fewer reporters covering local and state government, sometimes the only people providing any government oversight are citizens who watch public meetings and file public records requests. Empowering government to charge for access to those records would further shrink the already tiny level of government oversight that remains.  

New Hampshire is less than a year away from eliminating its income tax. 

Maybe. 

A bill up for consideration in the House Ways & Means Committee on Tuesday would bring it back.

It’s a myth that New Hampshire has no income tax. The state’s Interest & Dividends Tax is a levy on income derived from dividends or interest. Under current law, this tax expires on Dec. 31 of this year. That would make New Hampshire the eighth U.S. state with no direct tax on personal income. 

Joining that elite club won’t happen if the Legislature endorses a plan by state Reps. Susan Almy and Mary Jane Wallner. Their House Bill 1492 would bring the income tax back from the dead. 

The current I&D Tax, long set at 5%, was phased down to 3% this year and disappears on Dec. 31. HB 1492 would resurrect it, but with some changes. Instead of exempting the first $2,400 of interest income, as in current law, HB 1492 would exempt the first $7,500. The bill keeps the practice of raising that exemption by 50% for filers who are age 65 or older, blind, or disabled and unable to work.

Almy and Wallner, former chairs of the House Ways & Means and Finance Committees, respectively, seek to address complaints about the impact of the Interest & Dividends Tax by shrinking the pool of people who must pay it. 

The argument against repeal has always been that the tax brought in a good bit of revenue and applied primarily to the very wealthy. Ultimately, those were not effective in preventing its repeal. First, surging business tax revenues in the last decade have weakened the case that the state needs the revenue. Second, it was never exactly true that the tax affected only the super rich. 

The largest single group of I&D Tax filers are those who owe between $1 and $500. In Fiscal Year 2021, 28,061 Granite Staters (39.4% of the tax’s filers) fell into that category, Department of Revenue Administration data show. 

To pay $500 at a tax rate of 5%, one would need to earn $10,000 in interest or dividend income. At current interest rates, that $500 payment would come from someone who was able to sock away $200,000 in a CD or similar interest-bearing account. That’s certainly a tidy sum to have saved, but one does not have to be a millionaire to own an investment of that size. 

A $500 payment is the top end of that group. The bottom end is $1, which would be the payment on $20 in interest (after the $2,400 exemption).

Add those who paid between $500-$1,000, and more than half (52.4%) of I&D Tax filers in FY 2021 paid between $1-$1,000 in applicable taxes. Another 23% paid between $1,000-$10,000. That would mean that nearly three-quarters of I&D Tax filers earned between $20-$200,000 in taxable interest income (after exemptions).

Raising the exemptions, as HB 1492 does, will lower the tax bill for some earners and exempt others entirely. It’s unclear how many people would be affected, but it’s safe to assume that a higher percentage of I&D Tax payers would fall into the upper income categories than have in the past. 

However, that does not change the fact that many thousands of Granite Staters (and potential Granite Staters) who aren’t super-rich earn interest and dividends income and would see the reinstatement of this tax as a financial threat. People who begin building small sources of investment income hope to grow those into large ones.

Reviving this tax (which is already deceased under current law) would mean literally creating a new income tax and applying it only to a certain class of higher-income residents. Anyone not convinced of this need only read the text of current law, administrative rule and HB 1492.

Current statute (RSA 77:1) refers to the I&D Tax as an “annual tax upon incomes.” The Department of Revenue Administration refers to it as a “tax on interest and dividend income.” HB 1492 refers to it as an “annual tax upon interest and dividend incomes.”

It is unmistakably an income tax, which means that HB 1492 would do in New Hampshire what the Massachusetts millionaire’s tax did in the Bay State in 2022. It would target a specific group of residents with a punitive tax merely because the group is too small to vote out the tax’s supporters and too unpopular to convince a majority to defend it. 

Within months of its passage, the millionaire’s tax was already sending wealthy Massachusetts residents to New Hampshire and Florida. Enacting a similarly punitive income tax targeting these same individuals will have the predictable effect of reducing immigration to New Hampshire and increasing immigration to Florida (from both Massachusetts and New Hampshire). 

When the tax vanishes at the end of this year, New Hampshire will be the only state in the Northeast without an income tax. Today the closest one to New England is Tennessee. Under the HB 1492 plan, the Northeast would go back to being the only U.S. region without a no-income-tax state. For New Hampshire’s economic competitiveness, this would be a stumble backward, just as the state is about to stick the long-awaited landing. 

School choice in New Hampshire has become increasingly popular, with more and more Granite State families accessing Education Tax Credit (ETC) scholarships and Education Freedom Accounts (EFAs) to shop the best learning environments for their children in the state’s growing educational marketplace. 

But as the program becomes more popular, the governmental instinct to impose controls is growing. This year, legislators will consider more than half a dozen bills to layer new regulations on the state’s young EFA program. 

Of the 13 EFA-related bills filed for this year’s legislative season, seven would impose new state controls on the program or its participants:

  • HB 1418: “This bill prohibits the use of education freedom account funds to purchase school uniforms.”
  • HB 1512: “This bill limits the amounts of funds appropriated from the education trust fund to the education freedom account program to budgeted sums.”
  • HB 1592: “This bill prohibits the use of education freedom account funds at religious schools or for religious education or training, and repeals provisions relating to independence of and legal proceedings concerning education freedom account providers.”
  • HB 1594: “This bill requires annual determination of eligibility for awarding of education freedom account funds.”
  • HB 1610: “This bill requires all students to participate in standardized statewide assessments.”
  • HB 1654: “This bill requires the state board of education to annually review education freedom account service providers for continued compliance with all state and federal anti-discrimination laws.”
  • SB 525: “This bill changes income eligibility and reporting requirements for the education freedom account program and modifies the program’s administration and oversight.”

How the bills would impose new controls on the EFA program

House Bills 1418 and 1592 seek to restrict the type of schools EFA participants can use. HB 1418 would prohibit participants from purchasing school uniforms with their EFA funds. HB 1592 would forbid EFA families from using their funds to pay for religious education or training of any sort, including paying tuition at a religious school. HB 1592 is clearly unconstitutional. The U.S. Supreme Court ruled against a similar Maine law in 2022’s Carson v. Makin

In addition to its unconstitutional exclusion of religious education from the EFA program, HB 1592 repeals entirely the independence of the EFA program’s education service providers. The bill would strike provisions under RSA 194-F:7 that prohibit EFA providers from becoming extensions of the state education bureaucracy. Specifically, it removes the following from the law:

II. Education service providers shall be given maximum freedom to provide for the educational needs of EFA students without governmental control.

III. Nothing in this chapter shall be construed to expand the regulatory authority of the state, its officers, or any school district to impose any additional regulation of education service providers beyond those necessary to enforce the requirements of the EFA program.

IV. Any education service provider that accepts payment from an EFA under this chapter is not an agent of the state or federal government.

V. An education service provider shall not be required to alter its creed, practices, admissions policy, or curriculum in order to accept payments from an EFA.

These protections exist to clarify that EFA money belongs to parents, not the state, and that EFA providers are independent organizations rather than agents or extensions of the state. Providers include vendors ranging from local tutors to Amazon.com. These protections make clear that vendors are providing products and services to parents, who are purchasing those products and services with their own money. Erasing these provisions allows the state to treat providers as extensions of the state bureaucracy.

In a similar vein, HB 1512, 1610, and 1654 would limit EFA growth, add rules to the program, and increase governmental oversight of the program and its service providers. 

HB 1512 would limit appropriations to the EFA program from the Education Trust Fund to a maximum of $19.8 million for fiscal year 2024 and allotted amounts in the state budget for subsequent fiscal years, regardless of actual enrollment figures. 

For context, appropriations for the program are upwards of $22 million to meet the needs of the more than 4,000 enrolled students this academic year based on average per-pupil adequate education grants of $5,255. 

Enrollment has increased by 158% since the program first began. Limiting the program to set dollar amounts, regardless of future demand and enrollment, would hamstring the program’s ability to meet the needs of the many current and future Granite State families seeking educational opportunities outside of their government-assigned district public schools.

HB 1610 would require all New Hampshire students, including those enrolled in the EFA program, to take standardized statewide tests. Parents may choose alternative educational environments specifically because those environments assess student progress with measures other than standardized tests. Those tests wouldn’t be aligned with the curricula or program of every provider, so they wouldn’t necessarily provide an accurate measurement of every student’s learning. 

Education service providers in the EFA program are required by state law to comply with state and federal anti-discrimination laws. HB 1654 would subject providers to annual reviews for compliance with those laws. This would further discourage provider participation by adding an additional layer of compliance costs.

HB 1594 and Senate Bill 525 would apply to participants, not providers. Both proposals would require participants’ household incomes to remain at or below 350% of the federal poverty level each year during their participation in the program. Existing law requires that this income threshold be met at the time of application. Under these bills, an EFA student would be removed from the program if their single parent making $68,000 a year received a Christmas bonus.

SB 525 would also impose reporting requirements and annual income verification audits. Reporting mandates include annual reporting on the number of EFA students to the Legislature. Income verification would be pursued by subjecting ⅓ of EFA families to “randomized annual EFA income verification auditing” by the legislative budget assistant audit division. 

The EFA program is succeeding to a significant degree because it was structured to give families a large degree of autonomy while maintaining state oversight of expenditures through basic financial tracking and reporting requirements. 

The regulatory expansion in these seven bills would have the cumulative effect of discouraging participation of both families and providers, shrinking the variety of options available through the EFA program, and burdening all players (the state, families, and providers) with costly and unnecessary compliance costs. 

This legislative season offers a reminder that the existence of lightly regulated public education alternatives is no guarantee that such alternatives will continue to exist. Pressure will always come from lawmakers who distrust markets and parents to expand bureaucratic control and limit or even eliminate access to alternatives.