The Portsmouth Planning Board did something remarkable last week. It ever so slightly loosened its iron grip on a small portion of the city’s iconic downtown. And in the loosening, a lesson fell out. 

Local investors want to create at 238 Deer St. a mixed-use building with 21 micro apartments. These units would be no more than 500 square feet and would have no on-site parking. 

Though the location is a short walk from the city’s $26 million Foundry Place parking garage—built specifically to facilitate additional commercial activity downtown—the developers needed permission from the Planning Board, in the form of a Conditional Use Permit (CUP), to build those tiny apartments without on-site parking spaces.

A dispute over the need for private parking dragged on for two years, and last week the board voted, despite some member misgivings, to grant the CUP. 

That’s a huge decision, for many reasons. Among them, it separates housing from parking not just for this project but possibly for others in the future. Planning boards typically insist on maintaining minimum parking requirements that raise housing costs and occupy real estate that could be turned to more productive uses. 

It also allows tiny apartments to fill a huge market need in Portsmouth, where astronomical housing prices are driving away lower-and middle-income people.

During the board meeting, members kept asking about the rental price of the apartments. The developer’s attorney at one point answered, “…it’s going to be market rate, it’s not going to be affordable, that’s really all we can tell you at this point.”

This comment might not sound off to a lot of people, but it would be a strange thing to say about most products.

Why should there be a difference between “market rate” and “affordable?”

We don’t think of most other consumer goods in these terms. 

No one says, “the bananas are going to be market rate, not affordable,” or “are you pricing those chainsaws at market rate, or are they ‘affordable?’”

Sure, we browse clearance racks, wait for sales, clip coupons, buy generics or store brands, ransack the corner drugstore in protest of systemic oppression. (OK, maybe you do only some of these things.) But for most consumer goods, we don’t conceive of there being a market price and a separate “affordable” price. 

That’s because the market, if allowed to, will provide a gazillion options of most products at a wide range of prices.

If you need toilet paper, the market offers everything from wafer-thin sandpaper to quilted, pillow-soft rolls that smell like a flowering Alpine meadow in spring. 

If you need a car, you can pick up a no-frills Nissan Versa (MSRP: $15,700) or save up a little longer and spring for the slightly flashier Bugatti Chiron Super Sport (MRSP: $3.4 million).

If you need a cell phone, you can get a Nokia flip phone for $19 (less than the price of a 12 piece KFC bucket) or a Samsung Galaxy Z Fold 4 for around $1,800.

Sure, housing prices have a range, too. But in housing, government regulations have literally outlawed the construction of many options at the lower end of the range. So builders can’t offer the lower-price fare that manufacturers are able to offer in most other industries. 

And so we talk of “market rate” housing and “affordable” housing. That’s not because the market doesn’t want to provide less-expensive options. It’s because governments don’t want the market to provide those options. 

As Mark Perry has demonstrated, markets tend to lower prices and improve quality unless government gets in the way. Industries in which government regulations have prevented robust competition (health care, education, housing, child care) have experienced steady price increases, while less regulated industries have experienced price declines. 

Remove the regulatory barriers, and the market will be happy to provide micro apartments, tiny homes, duplexes, in-law apartments, single-family homes on half-acre lots and any number of other less-expensive options for people who want them. 

Once the supply catches up with demand, “market rate” will become “affordable” in housing just as in most other markets.

Since their adoption in 2021, Education Freedom Accounts (EFAs) have offered new educational opportunities for Granite State families.

An EFA is a government-approved savings account that can be used to access a wide range of educational opportunities outside a family’s designated public school district. If eligible, parents can direct their state funded per-pupil adequate education grant, an amount that averaged $4,857 as of 2022, toward their chosen alternative, provided those alternatives meet the state-set qualifications.

Instead of going directly to a student’s government-assigned public school, the student’s adequate education grant money is deposited into an account from which families can draw to pay for a variety of education-related expenses, including tuition, textbooks, technology, special education services and more.

To qualify, a student must be a New Hampshire resident eligible to enroll in a public elementary or secondary school. Additionally, the student’s family household income at the time of application for an EFA must be 300% of the federal poverty level or less, as established annually in the Federal Register by the United States Department of Health and Human Services.

School choice supporters had high hopes of expanding EFA eligibility this session. Arkansas, Florida, Iowa and Utah all passed laws this year to make all K-12 students eligible for an education choice option. Arizona and West Virginia already had universal choice programs.

Several variations of EFA expansion bills were introduced in the Legislature this year, but after May 18, only one option remains.

House Bill 464, which passed the House, would have expanded EFA access by adding a list of eligibility criteria with no family income cap. Those criteria include being homeless, in foster care, in a family of migratory workers, in a military family, learning English as a second language, being persistently bullied or disabled, living within the geographic boundaries of a low-performing or persistently dangerous school, being eligible for free or reduced price meals, or having a documented educational hardship.

The Senate Education Committee voted 5-0 to recommend that the Senate kill HB 464, which it did on May 18. That leaves House Bill 367 as the last option for making EFAs available to more students.

As introduced, HB 367 would have expanded eligibility for an EFA to households making no more than 500% of the federal poverty level.

However, by a vote of 187-184 the House cut the income cap down to 350% of the federal poverty level. This version of HB 367 received a 3-2 “ought to pass” recommendation from the Senate Education Committee, and the Senate passed the bill on a 14-10 vote on May 18. It goes to the Senate Finance Committee next.

Expanding EFA eligibility to 350% of the federal poverty level would increase the eligibility level for a two-person household by $9,860, for a three-person household by $12,430, and for a four-person household by $15,000.

Below are the maximum eligible income levels under both versions of this proposed expansion vs. the current eligibility standard.

The bump from 300% to 350% of the federal poverty level represents a 16.6% increase in the EFA income cap. That’s a small bump, especially considering the huge gains made in other states this year. But it’s the only option that remains for New Hampshire in 2023.

In 2021, we published a landmark study that showed how local land use regulations drove New Hampshire’s housing shortage. That study changed the conversation on affordable housing in New Hampshire, from one focused on government subsidies to one focused on regulations. This week, the Center for Ethics in Society at Saint Anselm College set the next housing policy landmark when it released the New Hampshire Housing Atlas.

The New Hampshire Zoning Atlas is the most powerful tool Granite Staters have ever had for understanding local zoning ordinances. It catalogues—and maps—23,000 pages of zoning regulations in 2,139 districts in 269 jurisdictions. Never has this information been available in one place, much less open for public examination. 

In the atlas, users can quickly find the building and land use restrictions in one community, or search the state to see what restrictions are in effect across multiple communities. The search tool and maps reveal just how severely New Hampshire municipalities have restricted people’s housing options, and how much freer some towns are than others. 

The atlas shows that single-family homes are allowed by right on 90% of New Hampshire’s buildable land, and by public hearing on another 6%. Sounds good, right? 

A closer look, though reveals that single family homes on lots of less than one acre are illegal—yes, literally illegal—on most of that property. It is legal to build a home on less than one acre in only 16% of the state’s buildable land.

You might think of zoning as “allowing” certain types of property uses. In reality, zoning is a prohibition. It carves communities into areas in which most uses of private property are outlawed. Large minimum lot size requirements are the perfect example of a regulation that outlaws a once common housing preference. The result is a nearly statewide prohibition on the construction of affordable starter homes.  

People generally have no problem with municipalities using zoning to, say, keep industrial operations out of residential neighborhoods. The New Hampshire Zoning Atlas shows, however, that municipalities commonly use this power to outlaw small yards, duplexes, apartments and any mixing of commercial and residential activities. The maps show that it isn’t unusual for municipalities to take zoning restrictions to absurd extremes.

Lebanon’s rural lands 3 zone has a huge 10-acre minimum lot size for single-family homes, which we knew from previous research. But the atlas shows that Hanover isn’t alone. Meredith’s forest and conservation district also has a 10-acre minimum lot size. Marlowe’s rural lands district has a minimum lot size of 20 acres!

Neighboring towns can have huge discrepancies in the types of homes they allow. 

No portion of Bedford, Merrimack or New Boston has a minimum lot size of five acres or more. But significant portions of Mont Vernon and Amherst do. Two-family housing is allowed in most of Londonderry, but in only a small sliver of Derry. 

Though the New Hampshire Zoning Atlas is itself policy neutral (it’s just a presentation of data), it’s likely to lead to policy changes. It’s hard to justify zoning that allows rental housing of five units or more, but bans duplexes and triplexes, for example. This particular rule shows up in a surprising number of communities.

The atlas offers an invaluable tool for citizens who want to better understand how government regulations prevent the market from providing housing options that people want, even in times of sky-high demand.

Teachers unions and school officials regularly advocate for higher public school spending on the argument that teacher pay is too low. In fact, teacher pay in New Hampshire is relatively low compared to other states. But that’s not a product of low funding levels.

Average public school district spending in the Granite State is is 14.4% above the national average, while our teacher pay is 5.3% below the national average.

What explains that discrepancy? School districts have used huge increases in funding this century primarily to hire new personnel, particularly administrators and support staff, rather than raise teacher pay, even as enrollment sharply declined. 

Our new public school spending study found that real (inflation-adjusted) spending on public school districts rose by $937 million, or 40%, from 2001-2019. Student enrollment fell by 14%, or 29,946 students, during this same time.

On a per-pupil basis, current spending, which excludes debt service and capital expenditures, grew by 74% from 2001-2019, but teacher pay rose by only 12%.

In 2021 (the most recent data available allowing for national comparison), teacher salaries in New Hampshire averaged $59,182 per year, while the national average was 5.3 percent higher at $62,304 per year.

The cost of living in New Hampshire is estimated to be 9.9 percent higher than the national average, which makes the lower teacher salaries in New Hampshire even more noteworthy.

Teacher pay is significantly higher in Massachusetts, even after adjusting for cost of living. Since they do not have as much staffing, Massachusetts public schools are able to pay their teachers higher salaries.  

The raw difference is $82,042 in the Bay State vs. $59,182 in New Hampshire.  Taking into account the cost of living, Massachusetts teachers are paid $7,606 more on average than New Hampshire teachers, a difference of almost 13 percent.



Massachusetts public schools spend their monies very differently than New Hampshire public schools do.  New Hampshire public schools have more staffing.  New Hampshire public schools have 18.2 full-time equivalent (FTE) staff per 100 students vs. 13.9 per 100 students in Massachusetts public schools.  For a school of 500 students, New Hampshire would have about 21.5 more FTE staff than a school of the same size in the Bay State.

Comparing New Hampshire to the national average, a 500-student school in the Granite State would have 26 more FTE staff, 14 more special needs students, 38 fewer English language learner students and 50 fewer students in poverty than the average school nationwide.

The low teacher pay in New Hampshire relative to the national average is not a result of low spending. Taxpayers have spent $937 million more on public school districts since 2001 above the level needed to keep up with inflation. Spending per-pupil in New Hampshire public school districts was $2,383 (14.4 percent) above the national average in 2019.

Rather, districts have chosen to focus on hiring, even as enrollment has fallen. As a result, average public school district employment levels are well above the national average while teacher compensation is below the national average.

If this discrepancy persists, it will become increasingly challenging for New Hampshire districts to recruit high-quality teachers even as declining enrollments reduce the demand for new teaching positions.


Former Vice President Mike Pence headlines the Josiah Bartlett Center for Public Policy’s 2023 Libertas Award Dinner on Tuesday, May 16.

Join us for an elegant dinner and a conversation with Vice President Pence, focused on economic freedom and opportunity in America.

Mike Pence served as a member of Congress, representing Indiana, from 2001-2013, governor of Indiana from 2013-2017, and vice president of the United States from 2017-2021.

Our Libertas Award honoree is the Honorable Norm Major, former state representative from Plaistow and long-time chairman of the House Ways & Means Committee, where he put in years of public service dedicated to frugal and responsible state budgeting.

The event will be at the Grappone Conference Center in Concord. Enjoy a cocktail reception from 5:30-6:30 and dinner from 6:30-7:30.

For individual tickets, please visit our Eventbrite page.

For table reservations and sponsorships, please contact us at [email protected] or 603-715-0076.

From 2001-2019, New Hampshire public school districts lost 29,946 students, but increased spending by an inflation-adjusted $937 million, a new Josiah Bartlett Center for Public Policy study has found.

In percentage terms, inflation-adjusted spending rose by 40% while enrollment fell by 14%.

The increase in spending is even more dramatic when capital and debt spending are removed. Current spending (operational spending that excludes capital projects and debt service) increased by 74% from 2001-2019.

On a per-pupil basis, New Hampshire public school spending increased by 66.8%, adjusted for inflation. In nominal dollars, New Hampshire spent $8,245 per student in 2001. That figure reached $18,905 in 2019, representing a 129% increase before accounting for cost of living increases. Adjusting for inflation, the increase was a stunning 66.8%.

The increase was so large that New Hampshire went from being 4% below the national average in per-pupil expenditures in 2001 to 25.7% above the national average in 2019.

A large portion of this increased spending went to hire new staff. While the number of students in New Hampshire district public schools fell by 14%, staffing increased by 15%. (Teacher pay rose by 12%, indicating that the emphasis was on hiring, not raising pay.)

Parents might assume that nearly $1 billion in additional spending above the rate of inflation bought improvements in performance on national metrics. That did not happen. As current spending rose by 74% and staffing levels rose by 15%, New Hampshire’s National Assessment of Educational Progress Reading and Math scores fell by 4 points. Nationally, scores rose by 15 points, which means that New Hampshire fell behind relative to other states despite a massive increase in spending.

The big picture is that during the first two decades of this century New Hampshire spent 40% more to educate 14% fewer students, and those students wound up doing slightly worse in reading and math.  

The massive increase in resources devoted to K-12 public schools was not repeated in other areas of state and local government. From 2001-2019, employment in New Hampshire public schools increased by 3,359 FTE (Full Time Equivalent) employees.  Employment in public colleges and universities increased by 478 FTE employees. All other state and local government added just 332 FTE employees. 

While total spending on district public schools rose by 40% from 2001-2019, the percentages varied by level of government—local, state, and federal.  And inflation was an important factor. 

Total state taxpayer funding to district public schools increased in nominal dollars from about $878 million in 2001 to approximately $1 billion in 2019. However, much of that increase was consumed by inflation. When adjusted for inflation, total state appropriations to district public schools shrank from an inflation-adjusted $1.2 billion in 2001 to $1 billion in 2019—a decline of 17 percent. Most of this decline, 83.9%, is due to declining student enrollments. The remaining 16.1 percent was due to actual increases in state appropriations coming close to, but not quite keeping up with, inflation.

Total local appropriations, adjusted for inflation, doubled, going from $1.09 billion in 2001 to $2.19 billion in 2019. That’s a 101% increase in spending as the number of students served fell by 14%.

Local and federal spending increases per pupil were also large, even when adjusted for inflation. Inflation-adjusted federal spending per student increased by 84%, going from $500 in 2001 to $920 in 2019, and local spending per student increased by 135%, going from $5,223 in 2001 to $12,279 in 2019.

State spending per student, however, was fairly flat during this period, when adjusted for inflation. Inflation-adjusted state spending per student was 3 percent lower in 2019 relative to 2001, a decline from $5,791 to $5,604 by 2019.

The full report, executive summary, and tables can be downloaded below. The tables contain detailed spending numbers for individual school districts. 

Executive Summary: 01-19EdFundingReportExecSummary

Full Report: EducationSpending01-19Report

Appendix Tables: Ed Spending Report District Tables



The New Hampshire Legislature, in its wisdom, has decreed how much an adequate education costs. It’s right there in statute, RSA 198:40-a. 

Legislators wrote in three concise paragraphs that the cost of an adequate education totals precisely $3,561.27 in 2015 dollars, plus an additional $1,780.63 for students eligible for a free or reduced price meal, $697.77 extra for English language learners, $1,915.86 extra for special education students, and $697.77 extra for third graders who score below proficient in reading. (The statute requires those figures to be adjusted for inflation, which they have been.)

Four school districts, led by Contoocook Valley, have sued the state, claiming that an adequate education actually costs much more than the state provides. Fourteen additional districts have joined the lawsuit. 

When the state Supreme Court trial began on April 10, the attorney for the districts said “there’s no place in the state where an adequate education can be provided for less than $4,000 per student.”

In New Hampshire, public school districts spend, on average, more than $23,000 per student in local, state and federal funds on all expenses, including transportation, construction and interest. On average, 60% of that funding comes from local property taxes and 27% from state adequate education aid, state figures show. 

The large gap between actual spending and the state’s decree forms the basis of this lawsuit.

The state says the cost of a adequate education is whatever the Legislature says it is.

The districts say the cost is determined by how much the districts spend.

Economically, they’re both wrong.

Or more precisely, they’re both using the wrong measure. No one can know the true cost of an adequate education because no market exists to find it. 

There is no functioning K-12 education market in New Hampshire. By law, students are assigned to public schools based on where they live. Spending levels are set by government formulas, not by parents making choices among competing options.

Without a market in which competition spurs innovation and creates efficiencies, there’s no way to know how much an adequate education should cost.  

The districts’ spending levels are a poor measure because each district is its own regional monopoly. The small amount of competition from chartered public schools isn’t enough to trigger the sort of large-scale efficiency gains that drive prices down and productivity up. 

The state’s method of determining costs—legislative debate—also relies on what districts spend in the absence of a competitive market. Legislators looked at what was spent and calculated costs based on that. 

So we have a debate between government entities, each of which thinks it can set prices accurately on its own. Nowhere along the way have consumers been empowered to do what consumers do: improve quality and lower prices. (Case study: Wisconsin.)  

Imagine if grocery stores were provided by government in the same way public schools are. Each community got a government-determined number of stores, and people were assigned to shop at the store closest to their home. The government sent your grocery money directly to the store, not to you. If you wanted to buy from a different store, you could, but the government-provided store got to keep your government-allocated grocery money. What would happen to prices?

At the state Supreme Court, each of these two sides will argue that it has the authoritative method for determining the true cost of an adequate education. But what’s missing is the voice of the consumer.

The truth is that the only authoritative method for discovering the cost of an adequate eduction is the creation of an open and competitive educational marketplace. Government formulas are no substitute for individuals empowered to make their own choices. 

Granite Staters entering the job market often face government-imposed barriers to entry. State-required licenses can come with onerous fees, arduous training requirements and a lack of reciprocity for individuals already licensed by another state in their field of practice.

Gov. Chris Sununu has proposed a major overhaul of New Hampshire’s occupational licensing bureaucracy. The governor’s proposal would establish universal license reciprocity, streamline the license approval process, consolidate licensing boards and eliminate 11 of them, and eliminate 23 permanent and 11 temporary licenses.

How would changing the state’s licensing bureaucracy and eliminating nearly two dozen licenses affect New Hampshire consumers?

Join us at Stark Brewing in Manchester on Tuesday, April 11, for a drink and a discussion to learn how unnecessary licensing regulations make it harder for Granite Staters to achieve the American Dream and how New Hampshire can work to break down these barriers.

Panelists are:

Drew Cline, Josiah Barlett Center for Public Policy

Ross Connolly, Americans for Prosperity

Jessica Poitras, Institute for Justice


Time & Location: 6-8 pm, Stark Brewery, Manchester, N.H.


AFP-NH is generously providing one drink ticket per attendee

Dinner will be provided.


The big story of the 2024-25 state budget has lurked just below the surface of most media coverage. It’s not the $99.6 million in employee pay raises, the increase in adequate education aid or the shifting of some Education Trust Fund line items to the General Fund. 

The big story is that lawmakers and the governor have incorporated at least $850 million in new revenues into the budget — and spent it. 

For the last decade, state revenues have exceeded projections in every fiscal year except for the pandemic year of 2020. Gov. Chris Sununu and legislative leaders have tended to categorize most of these annual surpluses as happy accidents (“one-time money”) rather than permanent funds to be counted on for future budgets.

That has changed. 

Legislative leaders and the governor this year incorporated the higher revenues into future revenue projections, and into the budget. 

The governor’s 2024-2025 budget projects revenues that are $912 million higher than those in the 2022-2023 budget. The House Finance Committee projects revenues $850 million above the previous budget. 

In Fiscal Year 2022, revenues were $435 million above budget. So far in Fiscal Year 2023 (through March), they are $323.7 million above budget. Lawmakers made quite conservative revenue estimates for the 2022-2023 budget. When the large surpluses materialized, most of the money found its way into appropriations.

Based on actual spending levels, then, the final 2024-2025 budget might not be that much bigger than the one before it. But measuring from one official budget to the next, the increase is very large. In practice, the main difference between the two budgets is the increase in baseline revenue assumptions, which are then used to fund ongoing spending. 

The question is not whether budget writers should accept, with caution, a higher baseline budget. It’s whether to spend that money or cut taxes. The follow-up question is how to prioritize those dollars if spending is the chosen option. 

Both the governor’s proposal and the House Finance Committee budget opt primarily for spending, though both contain some additional tax relief.

There are clear inflation-related reasons to raise state spending in some areas. The Department of Administrative Services notes, for example, that since 2018, state employee cost of living raises have totaled 5.4% while inflation has totaled 20.7%. With large vacancy rates in many departments (51% for entry-level positions at the Department of Corrections, according to the department), the market is sending a signal that state employee pay is too low. 

The state’s rates for medical providers who offer services through Medicaid also have been eroded by inflation, as has state adequate education aid. 

But both budget proposals raise General Fund and Education Trust Fund spending (money that comes from state taxes) above the rate of inflation.

The governor’s budget increases General Fund and Education Trust Fund spending by $889 million over the biennium, or 16.6%. General and Education Trust Fund spending under the governor’s plan totals $6.285 billion.

The House Finance Committee budget increases General Fund and Education Trust Fund spending by $981.4 million, or 18%. General Fund and Education Trust Fund spending under the House Finance Committee budget totals $6.37 billion. (Again, those represent increases from the approved 2022-2023 budget, rather than from actual appropriations.)

House Finance Committee Chairman Ken Weyler said during a budget presentation on Tuesday that the committee strives to keep spending below the combination of the inflation rate and population growth, which is best practice. The current budget, he acknowledged, exceeds that combined growth.  

The House Finance Committee used an inflation rate of 12.7% and a population growth rate of 1.5% to reach an optimal maximum budget growth rate of 14.2%, Weyler said. 

Had the committee kept spending to that level, the growth would be approximately $765 million. Instead, the committee proposes increasing spending by $981.4 million, which is $216.4 million above the combined inflation and population growth rate. 

The final percentage increase over the current state budget remains subject to negotiation. But the big takeaway is that a decade-long growth in state revenues plus a huge inflation spike have combined to ratchet state General Fund and Education Trust Fund spending to a level in excess of $3 billion a year. 

Going forward, this will be considered the new normal. Experience suggests that once a new baseline budget level is reached, returning below that level is extraordinarily difficult. 

“Very heavy taxes, are hurtful, because they lessen the increase of population by making the means of subsistence, more difficult.”

— John Adams, 1780

Last November, Massachusetts voters approved a so-called “millionaire’s tax.” It raises the state income tax from 5% to 9% for incomes of $1 million or more, an 80% tax increase. 

Four months later, the Massachusetts Society of Certified Public Accountants is sounding an alarm.

After surveying 270 member CPAs, the society in March released a paper titled “Massachusetts is Losing Residents and it’s Getting Worse: Can Tax Policy Changes Mitigate Outmigration?”

The survey of Massachusetts certified public accountants found that:

  • 82% of CPAs surveyed indicated that their high-income clients have expressed plans to leave Massachusetts in the next 12 months. Florida and New Hampshire are overwhelmingly the most popular choices for relocation. While some may argue that a move to Florida is driven by a desire for better weather and a different lifestyle, the fact that the second most popular destination is New Hampshire suggests that people want to stay in the area but may be motivated instead by a lower cost of living, including a lower tax burden. Furthermore, New Hampshire is set to repeal its Interest and Dividends Tax by 2026, which would make a decision to relocate even more appealing.

  • 61% of respondents indicated that tax policy is the primary reason their clients are considering leaving the Commonwealth in the next 12 months. 

  • An additional 39% of CPAs indicated that tax policy is a consideration for relocation. 

  • 0% of respondents indicated that tax policy is not a factor in the decision for high-income taxpayers to relocate.

  • More pointedly, half of CPAs said that the new Millionaire’s Tax specifically is the primary reason their clients are considering a move in the next 12 months.

“Some may have been willing to bear Massachusetts’ tax policy in the past, but moving from a five to nine percent income tax rate is an unprecedented 80% rate increase,” the report concluded. “That will undoubtedly inspire affected Massachusetts residents to reconsider their primary residence.”

New Hampshire Business Review reached a similar conclusion after interviewing New Hampshire real estate agents.


The Massachusetts CPAs call Massachusetts an “outlier” in the region for its extremely high tax rates and complex tax code. 

“Being an outlier makes it more difficult for the Commonwealth to compete with its regional neighbors and on the national landscape when it comes to attracting jobs, residents and capital investment, but it also violates basic tax principles of neutrality and economic efficiency,” the CPAs wrote.

“The current tax code introduces complexity and incentivizes opportunities to use a domicile change as a tax planning tool, which creates a host of unintended consequences for the state. Before the Millionaire’s Tax Massachusetts maintained a competitive edge in our region with the relatively low, flat individual income tax rate, which helped mitigate other issues such as the uniquely burdensome short-term capital gains tax rate and estate tax. Unfortunately, that is no longer the case.”

Those are words New Hampshire policy makers should always remember. 

New Hampshire is an outlier too, in the other direction. Our lower tax burden has helped to make our state the economic envy of the region, a continental marvel and a haven for tax refugees.

New Hampshire ranks 47th in state tax collections per capita, just a hair worse than Florida, according to a Tax Foundation ranking released this month. 

How do the other New England states fare? They’re all in the top 20. 

Vermont is No. 1, Connecticut 3, Massachusetts 7, Maine 15, and Rhode Island 16. 

New Hampshire collects very little tax revenue per person, compared to our neighbors, and yet we have the region’s lowest poverty rate and a booming economy. And we’re stealing population from the high-tax jurisdictions around us. Funny how that works. 

WalletHub, in an analysis also released this month, ranked New Hampshire 48th (third best) in tax burden. Maine and Vermont ranked in the top five, and the rest of the New England states were in the top 20. 

Migration patterns don’t precisely align with tax burden rankings because people aren’t 100% economically motivated, but there’s a tremendous amount of overlap. In 2022, Americans did tend to move from high-tax to low-tax states, as usual, according to several different data sets, including the Census’ own. 

The top in-migration states in 2022 were low-tax Florida, Texas, North Carolina, South Carolina and Tennessee, while the top out-migration states were high-tax California, New York, Illinois, New Jersey and Massachusetts, according to the list compiled by the National Association of Realtors.

Just-released Census data show that six of the top ten counties in the United States for population growth from July 2021-July 2022 were in Texas. The counties that lost the most people were Los Angeles County and Cook County, Illinois, Axios reported. 

The Massachusetts CPAs note in their report that a huge tax rate increase on people who are most able to move, passed right as the rise of remote work has made people less tied to their location, is a recipe for exodus. 

Likewise, a big tax rate cut on the same people, at the same time, would be a strong attraction. Strategically, this year would be the perfect time to accelerate the phase out of New Hampshire’s Interest & Dividends tax. 

Scheduled to phase out over the next four years, the tax remains for now a signal to high-wealth individuals that Florida would be a better relocation destination. 

Like any number of high Massachusetts taxes, the I&D tax is a disadvantage. It weakens New Hampshire’s competitive position and serves as a disincentive to move, or stay, here. 

It’s currently on schedule to be phased out by 2027. The House Finance Committee has recommended moving that date to 2025. Were the state to do that, or nix the tax entirely this year, it would not be lost on high-income individuals, retirees and anyone else with income from interests or dividends that New Hampshire’s tax burden is falling as Massachusetts’ is rising. 

New Hampshire is not listed among the seven states that truly have no income tax. Eliminating the I&D tax would put us on that list and make New Hampshire an even more attractive destination. 

Some might say that we don’t have to make ourselves more competitive if Massachusetts is making itself less competitive. But state tax competition is no longer just regional. 

The rise of remote work makes it even easier for people to shop for a low-tax place to live, regardless of where their employer is located. And the world’s increasing wealth makes it easier than ever for investors, entrepreneurs, retirees and others to move to favorable jurisdictions. 

The Massachusetts CPAs point out that when high-income residents leave Massachusetts, they take their community involvement and charitable giving with them. Making New Hampshire more attractive to these increasingly mobile people benefits not just New Hampshire’s economy, but our communities too. 

While Massachusetts is pushing higher-income residents out, New Hampshire has an opportunity to turn their attention away from Florida and toward the Granite State.