Companies have been working for years on new ways to recycle plastics, and they think they have a breakthrough concept: chemical, or “advanced,” recycling. If the technology is perfected, it has the potential to increase plastics recycling and decrease solid waste. 

Naturally, environmental activist groups hate it. 

In the Legislature this year, a popular, bipartisan bill to speed the development of advanced recycling in New Hampshire drew little opposition — except from some green activists.

Why? They prefer to abolish the production of single-use plastics. It’s a classic case of the perfect being the enemy of the good.

A General Accounting Office report last fall concluded that advanced recycling created tremendous new opportunities for:

  • Resource conservation. Chemical recycling can produce raw materials of virgin quality, thereby decreasing demand for fossil fuels and other natural resources.

  • Reduced landfill use. A significant amount of plastic waste ends up in landfills. New technologies could reduce the need for landfills, which may reduce the release of harmful chemicals into the environment.

  • New markets. Developing advanced recycling technologies could promote domestic business and employment. Chemical recycling creates a market for plastic waste and a new way to reuse some plastics.”

A New York recycling investment fund last year concluded that the technology had real promise for investors and as a recycling technology. 

A McKinsey study out this week concluded that advanced recycling “could satisfy 4 to 8 percent of total polymer demand by 2030….”

Obviously, there are no guarantees. Some advanced recycling plants have struggled to make a profit and have closed within a few years of opening. It might never achieve its stated goals, as is true of any expensive new technology.

Among its obstacles are state regulations, which tend to classify such facilities as solid waste disposal operations.

Senate Bill 367 classifies advanced recycling facilities as manufacturing, subjecting them to laws and regulations that apply to manufacturers rather than to solid waste disposal centers. 

The Department of Environmental Services supported the bill and testified in favor of it. 

At the request of the department, the bill authorizes state inspectors to “enter and inspect any advanced recycling facility to ensure compliance with all applicable statutes and departmental rules relative to air, water, waste, and land use and take any enforcement actions necessary.” 

The bill received a unanimous 4-0 “ought to pass” recommendation from the Senate Environment and Agriculture Committee and passed the Senate unanimously on a voice vote.

Sen. David Waters, a passionate environmentalist from Dover, co-sponsored the bill along with Sen. Kevin Avard, R-Nashua. Senate Minority Leader Donna Soucy, D-Manchester, also was a co-sponsor. 

In the House, however, opposition appeared. The House Environment and Agriculture Committee split on the bill, voting 4-3 in favor. The House passed it by 70-vote margin, but still 128 members voted against it. 

Some environmentalists worry that the new recycling process could cause unforeseen environmental problems. They don’t want it allowed until exhaustive testing and research can be done to guarantee safety. 

But that would delay the development of a promising new recycling technology indefinitely, and possibly smother it in the cradle. 

And that is exactly the point, for some activists. The Conservation Law Foundation opposed the bill, saying in a statement that it “disguises burning plastic as recycling and will spread toxic pollution into New Hampshire’s communities while keeping single-use plastic in production.”

The group’s stated goal is to end the production of single-use plastic. Making more of it recyclable is seen as an obstacle to achieving the end goal. 

As with natural gas power generation, some activists are hoping to block an incremental improvement to speed the arrival of a hypothetically perfect outcome. 

A GAO analysis of U.S. Environmental Protection Agency data from 2018 found that 75% of plastics wind up in landfills. Advanced recycling might have the potential to decrease that percentage substantially. But it can’t do that if environmentalists block it with a web of regulations.

Advanced recycling might not live up to its promise. But it definitely won’t if it’s never allowed to start. 

New Hampshire could become one of the earliest states to enable low-cost legal assistance by loosening occupational licensing regulations on the practice of law. If House Bill 1343 passes, paralegals would be able to provide limited legal representation to lower-income individuals in district, circuit and family court. 

Paralegals have some legal training but are not attorneys and do not have law degrees. They are prohibited from practicing law or representing clients in court. 

Restricting the practice of law to attorneys only, no matter how simple the legal matter, creates a shortage of legal representation and increases the cost of that representation.

As a result, 80%-90% of people who appear in family court in New Hampshire have no legal representation, bill sponsor Rep. Ned Gordon, R-Bristol, testified before the Senate Judiciary Committee last month. 

Only 13% of alleged domestic violence victims have legal representation in court, according to the Domestic Violence Task Force.

HB 1334 bill would let paralegals who are directly supervised by licensed attorneys represent lower-income clients in family, domestic, stalking and landlord-tenant cases. Paralegals could serve clients whose family income is no more than 300% of the federal poverty level.  

Testifying in favor of the bill, Chief Justice Gordon MacDonald said that allowing paralegals to represent clients in these types of cases would be “one of the most meaningful steps” the state could take to increase access to justice in the court system.

Other states have begun making similar changes for the same reasons. 

  • Arizona allows “Legal Paraprofessionals” to represent clients in family law and some limited civil, criminal and administrative law matters.
  • The State Bar of California is moving forward with a plan to allow “Legal Paraprofessionals” to represent clients in family, housing and some other limited legal matters. 

The push to remove needless barriers to the practice of law is not restricted to the United States. In the United Kingdom, barristers are attorneys who represent people in court, and solicitors generally do legal work for people outside of court. In 2020, the Legal Services Board approved a proposal to reduce the entry-level requirements for solicitors and broaden the number of people who can take the solicitor’s qualifying exam. 

In many countries, law degrees are offered at the bachelor’s level. The United States is an outlier in making graduate school the standard path to a law degree. 

HB 1343 would take a small step toward allowing people to purchase qualified legal representation at a lower cost than is available now. That it is supported by N.H. Legal Assistance and the N.H. Coalition Against Domestic and Sexual Violence shows a general consensus that such representation is needed. No law firm testified against the bill. 

If this small step passes, two obvious next steps could follow:

  1. Removal of the income restriction so that qualified paralegals can represent anyone. 
  2. The creation of a University of New Hampshire bachelor’s or master’s degree in legal studies that would lead to passage of the state bar exam. 

The state’s tremendous budget surplus is a windfall that should be used wisely. The last budget restored funding to the Rainy Day Fund. This year, policymakers would be wise to shift a large portion of the ($252 million so far) budget surplus to the state’s pension fund. This would save taxpayers money in the long run and be a responsible use of these unexpected revenues.

The Josiah Bartlett Center for Public Policy teamed up with the Reason Foundation’s Pension Integrity Project to create an explainer (posted below) outlining why this move makes good financial sense this year. (You can download a pdf copy here: REASON_BARTLETT_PENSION_EXPLAINER.)

 

New Hampshire’s critical housing shortage has emerged as the No. 1 impediment to state economic growth, and the legislative session could end with no substantial progress on the issue. 

In Concord, there is broad agreement that housing is a serious problem. There is little agreement on solutions.

Paralyzed by a widespread reluctance to place legal constraints on local governments, legislators have killed or watered down bills drafted to address the primary cause of the shortage: local planning and zoning ordinances. 

Senate Bill 400, intended to be the major housing reform bill of the year, never offered the sort of sweeping changes that would fix the local regulatory problem. But the most significant changes it did offer were removed last week by the House Municipal and County Government Committee. 

The committee even added language designed to exempt suburban and rural communities from the state’s current mandate to allow housing for lower-income families. 

This follows the Legislature’s rejection of previous bills to prohibit excessive minimum lot sizes and allow small multi-family housing (up to four units) in places served by municipal water and sewer. 

Deference to local governments has not been the only obstacle. The House Municipal and County Government Committee removed from SB 400 a state program to reward communities that allow more housing. 

In the bill’s proposed New Hampshire Housing Champion Certification program, municipalities that adopt ordinances to promote new housing development would be eligible for increased state infrastructure funding. 

An absence of a substantial legislative fix would leave Gov. Chris Sununu’s proposed InvestNH Housing Fund as the only statewide plan. The governor has been a strong and passionate leader on the housing issue. Working within his authority to manage COVID relief money, he’s proposed spending $100 million in federal American Rescue Plan Act (ARPA) funds to create incentives for new housing development. 

That effort was stalled in the Executive Council after objections from affordable housing advocates that the money wasn’t reserved for below-market developments. 

This obsession with steering the housing market toward lower-priced units via government intervention is yet another factor that has contributed to the state’s critical shortage. 

Developers need to make a return on their investment. When government insists that a portion of a development be sold or rented at below-market rates, that discourages new construction. In New Hampshire, town boards even use “workforce housing” quotas to kill projects they don’t want, as they know that these quotas can make projects unprofitable. 

The governor’s plan would allocate $60 million to developers to encourage multi-family housing projects, $30 million to municipalities to encourage the issuance of new housing permits, $5 million to municipalities to study improvements to local planning and zoning ordinances, and $5 million for the demolition of vacant or dilapidated buildings. 

The money to municipalities is directed at overcoming real obstacles by changing the incentives local boards have. Right now there is very little incentive to approve new projects, largely because of vocal opposition fueled by misinformation about the impacts of new housing on local communities. These municipal-directed dollars would offer incentives to move town boards in the right direction.

The seed money for new development would not work the same way. Developers already have every incentive in the world to build, especially in the current market. Developer financing is not a major obstacle to new housing development. Municipal ordinances are. 

The $60 million could cover some lost profits of developments with below-market-rate units. But once that subsidy goes away, those rents will rise to market rate. In any case, subsidizing new development is not necessary, as financing for housing is readily available in the private sector. 

Local ordinances are the problem, and so far, legislators have proven reluctant to approve statewide solutions that limit local authority. Creating better incentives for local governments to approve more housing would be a good option. Unless legislators change course in the next three weeks, the governor’s proposal will be the last statewide solution available this year.

“While the talk is about free markets and private property—and it is more respectable than it was a few decades ago to defend near-complete laissez-faire—the bulk of the intellectual community almost automatically favors any expansion of government power so long as it is advertised as a way to protect individuals from big bad corporations, relieve poverty, protect the environment, or promote ‘equality.’”

— Milton Friedman, introduction to “The Road to Serfdom” 50th anniversary edition, 1994

 

The right-of-center movement in the United States is shifting toward statism in a way even many of its self-proclaimed liberty activists don’t realize. 

Responding to relentless left-wing provocation, people on the right think they’re defending liberty by using the state to block or punish private-sector actions they dislike. Instead, they’re expanding state control over private behavior. 

The “Live free or die” state is not immune to this shift. Here, lawmakers who believe themselves to be righteous champions of liberty are trying to extend state control over private contracts and decisions. 

To pick one example, consider House Bill 1210, relative to exemptions from vaccine mandates. The bill requires any employer that receives any public funds, including grants or contracts, to allow a “right of conscience” exemption from vaccination.

Framed as a defense of individual liberty, the bill actually would reduce liberty. 

If enacted, it would weaken the right of free individuals to associate only with others who accept their dedication to fighting infectious diseases through vaccination. 

Vaccination status is not an immutable characteristic like race or sex. It is a choice, and not a purely individualistic one. It can have profound, even life or death, consequences for others. 

Were the bill to pass, health care facilities such as nursing homes and hospitals would be required by law to hire employees who refuse to vaccinate themselves against any and all infectious diseases. The bill covers all vaccines, not just those for COVID-19.

The bill restricts freedom of association in the name of “bodily integrity.” But someone who refuses to vaccinate is making a choice to give up bodily integrity. 

A virus is a foreign living organism that invades a body and uses it as a host. Viruses cannot replicate by themselves. They infect host cells and use them for reproduction, usually killing them in the process. Vaccines are designed to protect cells against invasion and destruction by alien organisms. Their purpose is to preserve bodily integrity. 

Viruses aren’t libertarian. They’ll infect anyone they can. People have a right to choose to associate with others who agree to vaccinate. This bill would violate that right in pursuit of a non-existent right to join a group without agreeing to its terms.

Conservatives can easily see that it would be a violation of individual rights for the state to require religious employers or ideological organizations to hire anyone regardless of their beliefs. This bill violates the freedom of association in a similar way. 

Should HB 1210 become law, a cancer patient would be unable to seek medical care in New Hampshire in a facility with a fully vaccinated staff. That’s not protecting people’s rights. It’s forcing people to associate with others who might be a danger to themselves.

The libertarian saying that your rights end where my nose begins applies here. Going unvaccinated (or not) is not a lifestyle choice like getting tattooed or piercing one’s nose. It can have a direct, potentially catastrophic effect on others. And others have a right to protect themselves against that through their associations.

Like House Bill 1469, which seeks to restrict the free association rights of all New Hampshire businesses under the guise of regulating banks, HB 1210 would expand the power of the state to regulate economic transactions in new ways. 

Supporters of such market interventions honestly think they are taking steps to protect individuals. But they’re mistaken. Unwittingly, they are moving to empower collectivism and weaken the liberty of the individual. 

Using pressure tactics or government regulations, progressives have sought to banish from the market business activity they dislike. Some Republicans have responded in kind.

In New Hampshire, House Bill 1469 showcases a Republican effort to cement culture war preferences in law. It offers a case study in regulatory overreach.

The bill creates a list of “prohibited acts for banks, credit unions, and businesses.” The list is long, vague and broad. And despite the title, the bill regulates every New Hampshire business, not just the financial industry.

HB 1469 labels as “discrimination” many non-financial reasons for not doing business with someone. 

Among the prohibitions: No financial institution may “discriminate against, impose as a precondition, advocate for or cause adverse treatment of, any person, business, or organization in their business practices” based on “ideological, philosophical, or political views and opinions” or other enumerated non-financial criteria.

The non-financial criteria include “social media posts; Internet browsing history, dietary habits, medical status, participation or membership in any clubs, associations, or unions, etc.; political affiliation; or place of employment or source of legal income.”

The bill would write similar language into the state’s Consumer Protection Act. The Attorney General’s Office testified that this  would “regulate all businesses” in the state, something sponsors did not appear to intend.

Thus every decision not to transact business would be open to potential civil rights litigation on the grounds that it might have been tainted by a non-financial consideration. 

In going after “woke” global corporations, HB 1469 would treat small New Hampshire businesses the way the Colorado Civil Rights Commission treated a Christian cake baker — as pawns in a broader culture war. 

Such a sweeping regulation of private business activity could be seen as justified if Granite Staters had access to only one bank. But they can choose from hundreds of financial institutions. 

New Hampshire has 16 state-chartered banks, eight state-chartered credit unions and 34 state-chartered trust companies. That’s in addition to 783 federally chartered banks, including many that are online-only and process applications in minutes. 

If one or 10 or 50 banks decide not to do business with center-right customers in a center-right country, competitors would immediately take up that business. Fear that conservatives will lose all banking privileges is overblown.

There is no shortage of financial institutions willing to take Americans’ money. And there is no shortage of entrepreneurs who would be happy to get rich by lending money to gun owners, meat eaters and other practitioners of great American pastimes. 

But there is a shortage of states where legislators resist the temptation to let people resolve their differences peacefully in a free and open marketplace. New Hampshire is one of the few places where leaving people alone is a cultural value. Kill that here, and the consequences will be a lot worse than some bank deciding to lose money by shrinking its customer base. 

Some Republicans think they need a law to protect them from businesses run by Democrats. But the market already does that via competition. Expanding business regulations so broadly will only give left-wing activists another tool with which to control businesses once their allies return to power, which is inevitable.

When that happens, conservatives will want to be able to argue against such proposals on free-market grounds. Regulating the political motives of every business transaction will do more than topple Republicans from that moral high ground. It will amount to abandoning the hill and destroying it. 

The state banking commissioner testified that the department has received no complaints of political discrimination in banking. Given that, a less burdensome alternative is obvious, if lawmakers feel that they have to “do something.” Task the department with collecting consumer complaints about discriminatory practices and reporting those complaints annually to the Legislature. 

If financial institutions begin to systematically turn away right-of-center customers and business partners, this will show up in the data. If those customers are unable to find other institutions willing to take their business, then lawmakers could consider an appropriate legislative remedy. 

In the meantime, legislators might want to consider the wisdom of a recently departed Granite Stater who cautioned that “there are just two rules of governance in a free society. Mind your own business. Keep your hands to yourself.”

If the Burgess Biopower plant in Berlin closes, New Hampshire electricity customers will save money. The state’s shrinking timber industry (and the City of Berlin) will lose money. 

The Legislature is again faced with the prospect of choosing sides. And again a proposed bill would side with the timber industry, not ratepayers. 

It’s a long and complicated story. Let us explain. No, that is too much. Let us sum up. 

The plant burns wood pulp, largely but not entirely from New Hampshire. Eversource buys power from the plant at above-market rates mandated by the state. 

These higher payments are not to support “green energy.” The plant is just a conduit for funneling money to the timber industry. It exists to create a market for New Hampshire wood pulp. It’s a jobs program, not an environmental program.

But it’s a jobs program funded by a mandatory rate increase on Eversource customers. That’s highly regressive and economically harmful. Low-income families pay more for electricity, as do employers.

To reassure the public that this wealth transfer scheme wouldn’t get too out of hand, the state capped total above-market customer payments to the plant at $100 million. Whenever the customer overpayments pass the $100 million mark, the plant has to reduce its prices so that ratepayers recover the difference within the next 12 months.

Thanks to falling natural gas prices, the cap was hit several years ago. So the Legislature intervened again and suspended the cap for three years. That suspension ends this November, at which point the plant will have to lower its rates to let customers recoup the last three years’ worth of overpayments.

Uh oh.

Eversource estimates the three year total to be $58.8 million by the end of November. If the plant must repay that within 12 months, it will have to close, its officials have testified.

The state has a few options. 

It could amend the agreement to let the plant repay the money over a longer period of time. This might not save the plant in the long run, but it could buy time (assuming the plant can afford to rebate the money at all). 

It could directly subsidize the plant with payments from the General Fund. 

It could let the plant close. That would save ratepayers an estimated $2.50 to $3 a month, according to the Department of Energy. Large customers (employers) would save much more.

Or it could pass a law to basically forgive the $58.8 million in customer overpayments. That’s what Burgess Biopower says Senate Bill 271 would do. 

The bill might do more, though. It states that “any and all legislative relief provided to the Burgess BioPower plant shall be deemed to be reasonable, legitimate, and in the public interest….”

Any? 

Through the end of 2021, Eversource customers have already paid more than $150 million in above-market rates for electricity generated by the Burgess Biopower plant. The plant cost a reported $275 million to build. But ratepayers don’t own 54% of a power plant. They just threw their money away. Well, the state threw it away on their behalf.

It’s likely that by the end of the 20-year contract, the overpayments will total more than the plant cost to build. And that doesn’t include the above-market payments for Renewable Energy Credits that are mandated by the agreement.

Burgess representatives say the plant supports 240 industry jobs. If we accept that number for argument’s sake, ratepayers have already spent more than $640,000 per “job saved,” with years left in the contract. 

This is a huge transfer of wealth from Eversource customers to a few hundred people (at most) in an industry that is economically declining but politically well-connected.

Burgess Biopower officials say the plant won’t need any more handouts if the $58.8 million in overpayments is forgiven. But the contract that forces customers to pay above-market rates continues. That’s a handout. 

The state’s scheme to subsidize the plant will continue to cost ratepayers more than $20 million a year through the life of the 20-year contract, according to the Department of Energy. The plant began operations in 2014.

And when all of these subsidies are done, what will the ratepayers have to show for it? Probably nothing. If these above-market payments were actually “investments,” they would have purchased shares in the plant’s parent company. Then, at least the ratepayers might have gotten something in return.

Granite Staters could gain a little more freedom this year to make extra money from home.

The COVID-19 pandemic has reshaped the American workforce, probably permanently. A Pew poll in February found that 59% of people who say their jobs can be done mostly from home are working from home all or most of the time, with another 18% working from home some of the time. 

What’s more, 61% of them say they are working from home by choice. 

A study published by Stanford University in March concluded that “about half of the US workforce currently works remotely at least one day each week.”

Millions of Americans are choosing to convert their living rooms, dens, bedrooms, play rooms, basements, etc. into home offices. 

But for those who don’t type on laptop computers all day, working from home is trickier. Regulations often prevent homes from being monetized in more traditional ways. 

Two bills in the Legislature would relax some restrictions that make it harder for people to generate extra income from their homes. 

RSA 143-A:12 allows Granite Staters to operate a “homestead food operation” from their kitchens. (It excludes foods the require refrigeration.)

To prevent these kitchen businesses from scaling up to full commercial operations, allowable sales are capped at $20,000. 

House Bill 314 would increase that cap to $35,000, letting people make a living, or at least a really strong side-income, from homestead food preparation. The bill would increase a homestead food operator’s maximum allowed weekly sales from $384.60 to $673.

For those who wish to monetize the rest of their home, Senate Bill 249 would prohibit municipalities from banning short-term rentals. 

According to a new analysis by the state Office of Planning & Development, 27 New Hampshire jurisdictions regulate short-term rentals in some way. These range from Franconia’s registration requirement to Bedford’s ban. 

SB 249 would allow short-term rentals statewide while authorizing municipalities to “generally regulate parking, noise, safety, health, sanitation” and apply “other related municipal ordinances” to short-term rentals. 

Municipalities could require registration, and they could revoke that registration if a property is associated with more than one ordinance violation. 

There is some concern that short-term rentals could raise rents and home prices. Studies have found that these rentals are associated with a short-term bump in prices.

But over the long run, short-term rentals have been found to stimulate housing construction.

A study released last fall looked at the effect of Airbnb rentals on housing construction over a decade. It found that a 1% increase in Airbnb listings led to a 0.769% increase in permit applications. 

The authors found that short-term rentals stimulate the construction of new housing units, leading to increased property tax revenue, and that “restricting STRs can have a significant, negative impact on local economic activity.”

It’s not surprising that people will try to build more housing if they can use it to generate extra income. 

These practical considerations aside, regulations on the use of property (particularly for generating income) have grown so strict that they’ve caused a significant erosion of private property rights. 

Historian Edmund S. Morgan wrote that “widespread ownership of property is perhaps the most important single fact about Americans of the Revolutionary period. . . . Standing on his own land with spade in hand and flintlock not far off, the American could look at his richest neighbor and laugh.”

Today, a Granite Stater standing on his own land looks at his neighbor and worries, as the neighbor can call the town planning department and report him for a dozen potential ordinance violations.

Instead of balancing competing private property interests, state and local regulations have long trended against property owners. Regaining that balance will take decades. It can start with small changes that grant a little more discretion to property owners while maintaining rules that allow neighbors to assert their own property rights. 

With inflation at a 40-year high and March approaching the highest one-month gas price increase on record, this would be a strange moment for legislators to purposefully inflate public works costs for taxpayers. But that could happen, started by a Senate vote this week. 

Senate Bill 438 would raise costs on New Hampshire taxpayers for the sole purpose of protecting jobs in Pennsylvania, Michigan, Ohio, Illinois, Indiana and New York. It has 14 co-sponsors, 58% of the Senate. 

The bill would require all state-administered public works projects of $1 million or more to use American-made steel. Similar bills are being pushed by the steel industry in state legislatures around the country. It is a classic example of protectionism masquerading as patriotism.

The effect would be a politician-imposed transfer of wealth from New Hampshire taxpayers to the $100 billion American steel industry. 

The bill’s fiscal note states that the cost is indeterminable “due to wide-ranging price fluctuations for these goods, supply-chain shortages, and US imposed tariffs.” 

But it’s well-established that the effect of such protectionist laws is to increase prices. 

“Buy America rules prohibit customers from buying less expensive steel from overseas suppliers for use in public works projects,” the Congressional Research Service concluded in 2015. 

Compliance costs for “buy America” laws also raise end prices, the Congressional Research Service pointed out.

“Other direct costs associated with Buy America are mainly related to administering and enforcing its requirements, costs that are mostly absorbed by state and local government project sponsors. These costs include the effort required by contractors to document the national origin of iron, steel, and manufactured products and agency administration of the certification process. Extra work may also be required of contractors to put together two bids for a given project, one incorporating domestic products and one with foreign products. Waiver requests, another cost, may be prepared by the state or local government project sponsor alone or in cooperation with the contractor.”

Then there are the project delays, which also increase costs.

“Buy America may make it more time-consuming to complete transportation projects, ultimately causing higher project costs. Delays can arise from domestic supply problems and the waiver application process.”

Federal “buy America” requirements for rail cars led to municipal rail systems providing commuters with inferior cars at inflated prices.

It’s also well-established that industry protectionism costs more jobs than it saves and hurts domestic industries in the long run.

A 2017 study by Australian economists found that buy America requirements protected 57,000 U.S. manufacturing jobs while reducing overall U.S. employment by 363,000. According to that study, ending federal Buy America provisions would increase employment in New Hampshire by more than 800 jobs. 

Studies have detailed how protections for specific industries at the national level just transfer wealth from consumers to politically favored industries, sometimes costing consumers millions of dollars per job saved. 

They do so in the name of protecting manufacturing jobs from foreign competition, when in fact manufacturing job losses are primarily the result of productivity gains. 

That is particularly true for the steel industry. In 1980, it took 10.1 man hours to produce a ton of steel. By 2017, it took just 1.5 man hours.

U.S. steel industry productivity since the 1960s has been driven by two primary factors: technological gains and competition. Contrary to protectionist dogma, competition helps U.S. industries by making them more productive and more competitive. 

The U.S. steel industry is no exception, having been helped by imports.

The bill anticipates increased costs. It allows a waiver for the following conditions:

(1)  Application of the project would be inconsistent with the public interest;

(2)  The product is not produced or fabricated in the United States and that it would be in the public interest to provide a waiver;

(3)  The item for which a waiver is being requested is not produced and fabricated in the United States in sufficient and reasonably available quantities and of satisfactory quality; or

(4)  Alternate bidding procedures were used and the lowest overall total bid based on using domestic fabricated structural steel was at least 25 percent more than the lowest overall total bid based on using foreign steel.

Exception No. 4 indicates clearly that costs are expected to rise. It would write into law the presumption that cost increases of up to 24.99% are acceptable to legislators. That’s remarkable. 

If that weren’t enough, SB 438 could lower employment in New Hampshire for the purpose of increasing it in Pennsylvania. 

The effect of the law would be to raise the price of raw materials for public works projects. If those costs are large, contractors could seek to recoup them by hiring fewer employees. The result would lower employment in New Hampshire. 

American industries grow strong through competition, not coddling. If American steel is competitive, New Hampshire contractors will use it. If it isn’t, then forcing them to use it only raises costs and lowers quality. 

If other countries subsidize their industries, that should be addressed at the federal level. Preventing New Hampshire public works projects from using Canadian steel won’t have any effect on China’s state industrial policies. It will just make it harder for New Hampshire projects to be completed on time and at the best possible price. 

Rising gas prices have prompted calls for a state gas tax holiday. Though a gas tax holiday would provide some immediate relief from high prices, the cost would have to be paid later, possibly through higher taxes or deteriorating road conditions. 

In New Hampshire, the gas tax is not a general tax. It’s a user fee. Part 2, Article 6-a of the New Hampshire Constitution requires that it be used exclusively for road construction and maintenance.

State gas tax revenues have not kept up with inflation this century. In the fiscal year ending in June of 2000, total unrestricted gas tax revenues were $116 million. That would equal $182 million in 2021 dollars. But in FY 2009, unrestricted gas tax revenues were $131.6  million before falling back to $116.5 million in FY 2021. 

While the state’s population grew by 13% since 2000, gas tax revenues have remained essentially flat in nominal terms and have fallen in real terms. 

Because the gas tax is a user fee, a holiday would stop charging people for use of the public roads for its duration. But it wouldn’t stop the wear and tear on the roads. If that funding is not made up later, the state would have to forego repairs and maintenance, replace the lost revenue with higher taxes or transfers from somewhere else, or find some way to reduce costs. 

Given current inflation, it’s not clear how the DOT would reduce costs, leaving the other two options as the most likely long-term effects of a gas tax holiday. 

Legislators have floated the revenue transfer idea. But two proposals to do that were rejected this week in the House Finance Committee. The first would have had motorists fill out a rebate form to receive checks from the state. Motorists would have had to keep their gas receipts. 

The costs of administering that scheme prompted the amendment to be replaced with a plan to send every owner of a registered motor vehicle a $25 check for each vehicle. The cost was estimated at $40 million. The money would come from the general fund, not the highway fund, so it wouldn’t be a gas tax rebate. It would simply be a check from the state to help people cover the cost of paying for fuel. 

At this week’s prices, $25 wouldn’t cover even half the cost of filling a 12-gallon gas tank.

Such one-time tax rebates are not good tax policy. They don’t have the kind of stimulating effects that tax rate cuts do. 

“The tax code should not be used like an appropriations bill to dole out benefits, effectively putting a chicken in every pot,’” as the Tax Foundation put it in a 2001 policy brief. “The primary purpose of the tax system is to raise revenue, not to micromanage the economy with subsidies. It should create a level playing field in which individual and business decisions are made to achieve the best economic outcomes.”

In this case, the general fund should not be used to dole out benefits. It should pay for necessary public services. 

If the state has a surplus of federal COVID money or other one-time revenues, it would best be used to cover state obligations that are difficult to cover with recurring revenues, such as reducing the shortfall in the state pension system. 

If the state has an ongoing surplus of recurring revenues, it should consider another tax rate cut.

As the Tax Foundation has pointed out regarding a federal gas tax holiday, it would do nothing to change the underlying causes of gas price increases and could create other problems.

Though it sounds like a nice way to give consumers some short-term relief, a gas tax holiday is not sound policy.