Free beer & no masks: How better vaccine incentives can help shorten the pandemic

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In late April, New Hampshire was No. 1 in the nation in the percentage of distributed vaccines administered. Nearing mid-May, the state has dropped to 24th (80%). 

As those who were most eager to get vaccinated have done so, the number of people signing up for their first dose has fallen sharply. Though Becker’s Hospital Review reports that 59% of the population has received at least one dose as of May 14, only 35% has been fully vaccinated. 

This slowdown in vaccine demand creates a public health concern because it threatens to prolong the spread of the pandemic.

The state has been encouraging people to get vaccinated for months. It has initiated a public awareness campaign with the message that getting vaccinated protects you and others. This has been the standard public messaging for COVID-19 vaccination campaigns. But recent research suggests that it’s not very effective at convincing those who remain reluctant to get vaccinated.

A recent YouGov poll found that 63% of Americans who do not plan to get vaccinated think it’s safe to gather indoors with other unvaccinated people without wearing a mask. A campaign that focuses on telling people they and their loved ones will be safer if vaccinated won’t resonate with unvaccinated people who already think they’re safe.  

Shift to incentives and a positive message

A better vaccination campaign would offer a combination of fun incentives and positive messages. 

A UCLA study found that people respond to cash and lifestyle incentives. Offering between $25-$100 raised people’s willingness to get the vaccine by between 13-19%. Cash was more effective with Democrats than Republicans.

Telling people that they won’t have to wear a mask after they get vaccinated also was effective at changing minds. For all respondents, the percentage who said they were more likely to get a vaccine rose by 13 points, from 50% to 63%. For Republicans, the gain was 18 points, from 35% to 53%.

That’s one reason the CDC’s newly announced guidance that vaccinated people don’t have to wear masks is so important. Requiring people to continue masking in public after vaccination undermines the government’s message that vaccination will make them safer and bring a return to pre-pandemic life. 

This confusing messaging is prevalent in New Hampshire. Dover, which has a public mask mandate, tells residents that they must continue masking after getting vaccinated. 

Its guidance reads: 

“WILL I BE ABLE TO STOP WEARING A MASK AND SOCIAL DISTANCING IF I GET THE VACCINE?

“No.”

Portsmouth and Nashua are among the New Hampshire municipalities that continue to mandate mask-wearing in public, including outdoors, which undercuts the state’s vaccine messaging. 

Instead of communicating the depressing, negative message that vaccination offers no escape from mask mandates and other government controls, government ought to be sending a message of hope and joy while offering people fun incentives to get the shot.  

Yes, the caveat is that businesses, local governments and other organizations might continue to require masks indoors for the time being. But governments aren’t effectively communicating that this should be a temporary, transitional practice rather than a permanent one.

A few jurisdictions, however, have tried creative, incentive-based initiatives to encourage vaccination, and the results are encouraging.

An Erie County, N.Y., program that offered free local craft beer and a pint glass to those who showed up to get vaccinated at a local brewery resulted in more vaccinations in one day than all of the county’s first-dose clinics for the previous week, The Buffalo News reported. 

New Jersey is partnering with the Brewers Guild of New Jersey to provide a free beer for anyone who gets vaccinated in May. 

Ohio is giving away $1 million each to five newly vaccinated people via a lottery, plus college scholarships to five students. 

Alabama is holding a mass vaccination event at the Talladega Superspeedway and letting people do two laps around the speedway (behind a pace car) after getting their shots. 

There is good evidence that unvaccinated people respond more to incentives such as free cash and beer — and the lifting of mask requirements — than to New Hampshire’s current messaging. The state could produce better results by changing its vaccine marketing as soon as possible to do the following:

  1. Partner with willing craft breweries, wineries, distilleries, restaurants, etc. to offer freebies in exchange for getting a vaccine. Businesses hard hit by the pandemic — such as movie theaters and restaurants — might make good partners. The state is receiving another $1.5 billion in federal COVID relief funds. Using some of that money to boost the state’s vaccination rate by partnering with local businesses to offer beer, coffee, doughnuts or movie tickets to reluctant residents would be a cost-effective investment in speeding the end of the pandemic. 
  1. Start communicating to people that mask-wearing and other restrictions, at least in public spaces and especially outdoors, can end when enough people get vaccinated. The confusing messaging on masking is suppressing interest in vaccination. A clear, positive message, effectively communicated, can help to reverse that. 

The state has both a public-health and an economic interest in bringing the vaccination rate up to the highest possible level. Giveaways and better messaging won’t convince everyone to get a vaccine, but there is evidence that they can produce a large enough change on the margins to make a significant difference. Available evidence suggests that this would be more effective than the standard messaging being used by New Hampshire and most other states. 

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Low labor force participation is holding back N.H.’s economy

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As a few lawmakers engaged in a publicity stunt last Saturday to press for a state-imposed $15 minimum wage, New Hampshire employers were raising wages and offering cash incentives in desperate efforts to attract workers.

A Portsmouth restaurant is hiring line cooks for $22 an hour, with a $500 signing bonus. A Salem cafe is offering up to $22 an hour and a $600 signing bonus.

The pandemic has worsened New Hampshire’s already challenging labor shortage as thousands have dropped out of the workforce for a variety of COVID-related reasons. Employers have responded by raising pay.

Average hourly earnings in New Hampshire are up more than $2 an hour, coming to an increase of $87 a week, since last March, state data show.

And still, thousands who left the workforce when the pandemic hit are staying home.

There are 28,600 fewer people in New Hampshire’s workforce than there were a year ago, though thousands more jobs are available.

Federal data show 33,000 job openings in the state as of this past December, the latest month for which official data are available, according to New Hampshire Employment Security. That’s up from 31,000 the year before.  

“If you looked at the job openings line, you wouldn’t detect that there was a pandemic,” Annette Nielsen, economist at New Hampshire Employment Security, said in an interview.

“My analysis is that it’s definitely the labor force participation rate, it’s down by a couple of points and that’s definitely the big reason” for the labor shortage, Nielsen said.

There is no single cause of this reluctance to rejoin the workforce. Several circumstances are working together.

One factor cited by employers is the $300 increase in federal unemployment benefits. 

In fact, the co-owner of the restaurant where the lawmakers held their minimum wage publicity stunt, Madear’s Southern Eatery & Bakery in Pembroke, told the New Hampshire Union Leader that the extra federal money was keeping people on the sidelines.

“It’s also the idea with stimulus and the unemployment extension, that does not help at all,” said Robb Curry, the progressive activist and restaurant owner.

About 4.6 million Americans dropped out of the labor force last year for COVID-related reasons, according to a May analysis from Bank of America economists.

That analysis concludes that extended Unemployment Insurance benefits and fear of Covid are the top two factors depressing labor market participation.

“Our estimates suggest that those who previously made less than $32,000 would be better off in the near term to collect UI benefits than work,” the analysis concluded.

The previous $600 additional unemployment benefit “definitely would be for some people an incentive to decide not to work,” Nielsen said. 

The current $300 in additional benefits would not be as strong a disincentive to work, she said, however she noted that its effects could be larger in New Hampshire, where the workforce is older. One fifth of New Hampshire’s labor force was between the ages of 55 and 64 in 2009. By 2019, it was up to a fourth, or more than 130,000 employees.

“The thing is that there are a lot of people in New Hampshire aged 55 to 64, so if you change that just a little it can make a big difference,” she said. 

A high proportion of New Hampshire’s labor force qualifies for Social Security, even Medicare (starting at age 65), so an additional $300 can tip the scale toward not working, she said. 

Then there were school closures. In states where schools went remote, women dropped out of the labor force at much larger rates.

It’s not clear how much each factor (fear of COVID, higher unemployment benefits, remote schooling) has contributed to the lower labor participation rate. But it is clear that reluctance to return to work is COVID-related and continuing.

New Hampshire unemployment claims remain well above their pre-pandemic levels, state data show. In February of 2020, individuals filed 15,068 weeks’ worth of benefits claims. That number rose to 58,630 one month later. This march, it was 59,313.

Unemployment claims have remained stubbornly high — at roughly four times the pre-pandemic rate — since last November. 

With COVID cases falling and the economy booming again, the most significant drag on New Hampshire’s economy is the reluctance of thousands of people to return to work. 

There is no quick fix, but a few developments could help. One is the state’s return to a work-search requirement for unemployment benefits. Another is getting all schools and summer camps fully reopened. 

But probably the largest single factor would be hitting the vaccination threshold at which COVID spread collapses. That’s around approximately 70-80% of the population, though estimates vary.

Israel, with more than 70% of its population fully vaccinated, seems to have subdued the virus. 

With the virus controlled via vaccination, all of the factors keeping people from returning to work vanish. 

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House budget cuts state spending, taxes

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The 2022-23 state budget passed in the state House of Representatives on Wednesday would reduce state general and education fund spending by 1.4% below actual 2020-21 state spending. The reduction from what legislators approved in the last session is even larger. 

There is always some discrepancy between legislative appropriations and actual spending, as governors make adjustments when managing state operations. In the 2020-21 budget cycle, Gov. Chris Sununu took emergency measures, including a hiring freeze, to save money after the pandemic caused a dip in revenues last spring. 

As a result, the state has spent less money in the current budget cycle than legislators allotted. The 2022-23 budget approved by the House Republican majority Wednesday spends 1.4% less than actual state spending in the current budget (which still has a few months to go).

But when compared to total appropriations as approved by the previous, Democratic-controlled Legislature, the reduction totals 2.3% of general and education fund spending.

The general and education funds are the portions of the state budget funded by state tax and fee revenues. They do not include federal funding.

On taxes, the budget:

  • Reduces the Business Enterprise Tax rate from 0.6% to 0.55% and increases the filing threshold to $250,000 for both of the tax’s two threshold levels, gross receipts and enterprise tax base. Current thresholds are $200,000 for gross receipts and $100,000 for enterprise tax base. The budget thereby reduces both the BET rate and the number of businesses that have to pay it;
  • Reduces the Business Profits Tax from 7.7% to 7.6%;
  • Phases out the Interest & Dividends Tax by 1% a year over five years;
  • Reduces the Meals & Rooms tax from 9% to 8.5%;
  • Changes the triggers for unemployment insurance tax rate adjustments. Current law triggers rate cuts of 1% if the Unemployment Insurance Trust Fund reaches $275 million and 1.5% if it reaches $300 million. Those triggers are raised to $350 million and $400 million, respectively.

Those are the top-line state spending and tax changes. Josiah Bartlett Center will have a more detailed breakdown of the budget next week. 

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N.H. 1st New England state to make vaccine available for half, then later 2/3, of residents

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On Monday, March 29, New Hampshire became the first New England state to make at least half its population eligible for a COVID vaccine, according to an estimate by the Josiah Bartlett Center for Public Policy. Two days later, on the last day of March, it became the first New England state to make at least two-thirds of its population vaccine eligible.

In March, New Hampshire and Connecticut quickly accelerated their vaccine eligibility, trading places for the most rapid expansion. Connecticut made approximately 45.7% of its population eligible on March 19 when it allowed sign-ups for people aged 45 and older. New Hampshire opened registration for residents aged 40 and older 10 days later, then opened registrations for ages 30 and older on March 31. 

Since state vaccination programs began, they typically have been ranked by the percentage of their population that has been fully vaccinated. Another method is to measure the percentage for whom a vaccine is available. Both measures have problems, and both offer useful insights into a state’s vaccine rollout. 

The biggest problem with judging a state by the percentage of its population fully vaccinated is that state governments don’t mandate vaccination; their responsibility is to make vaccines available. 

Another problem is that a sizable, though declining, level of vaccine reluctance persists, particularly in more rural and Republican-leaning states, some data suggest. 

Measuring a state government’s success by the percentage of the population that got the vaccine is to give credit or lay blame in part for factors that are beyond the state bureaucracy’s control.

Judging states by the percentage of the population that has access to a vaccine could be a better measure of the state government’s distribution program. However, this measure also is affected by public behavior and demographics. 

If large portions of the earliest eligible groups decline vaccination because they are skeptical or fearful of the vaccine, that can make more doses available more quickly for later groups. If a state’s population is heavily skewed toward one end of the age spectrum, that will also affect the percentage eligible. 

New Hampshire’s median age is 42.9, almost two years higher than Connecticut’s (41). That gives New Hampshire an edge over Connecticut on this metric. But Maine’s median age is 44.7. Vermont’s is the same as New Hampshire’s (42.9). Rhode Island and Massachusetts are the youngest New England states, with median ages of 39.9 and 39.5, respectively. 

Another potential complication is that declaring eligibility is not the same as making the vaccine available. States can open sign-ups, but those are good only if the system is granting quick and easy access to appointments where vaccines are available.

Ultimately, states are responsible for creating a functioning distribution system that provides residents with the opportunity to obtain a vaccine. Once that system is functioning efficiently and effectively, states can encourage vaccination, but they do not conscript people into the vaccination program. 

That being the case, looking at the percentage of the population that has access to the vaccine can be a useful way of assessing a state’s competence in getting doses to people who want them. At this core task, New Hampshire has done extremely well. Sign-ups have proven relatively easy, wait times are not long, and vaccines are readily available for those who want them.

Though no state’s distribution system has been flawless, New Hampshire’s has managed to avoid major failures while providing relatively easy and effective access for eligible groups. 

By basing eligibility primarily on age, followed by vulnerability, the state has prioritized high-risk individuals while maintaining an uncomplicated sign-up system. 

Connecticut designed and maintained a similar priority system, based primarily on age and vulnerability. Both states have stuck with these systems amid criticism from some that race, ethnicity and income should be weighed more heavily. 

At the close of the first quarter of 2021, Connecticut and New Hampshire led New England in making vaccines rapidly available for most of the population. Other New England states have lagged weeks behind.

Connecticut’s vaccine eligibility remained at age 45 and older until April 1, when it became the first New England state to offer vaccines to all residents ages 16 and older.

New Hampshire ended March with vaccine appointments available to anyone 30 or older, with its schedule set to open vaccine sign-ups for ages 16+ on April 2, just one day after Connecticut.

Every other New England state is scheduled to expand eligibility to ages 16+ more than two weeks later, on April 19. 

Using U.S. Census data, the Josiah Bartlett Center for Public Policy estimated the percentage of each New England state’s population that was eligible for a COVID vaccine on March 31, the end of the first quarter of 2021. Based on the age groups that were being offered vaccines on that date, New Hampshire was in the lead, with 67% of its population eligible, followed by Connecticut at 45.7%, Vermont at 42%, Maine and Rhode Island at 25%, and Massachusetts at 23%.

In addition to prioritized age groups, states have made first responders and other “essential” workers eligible for vaccines. We used only age groups to estimate the vaccine-eligible percentage of the population because we did not have good data for dividing these workers by age.

Adding essential workers without adjusting for age would boost each state’s figures by a few percentage points, but adding those numbers without knowing the workers’ ages would double count many, if not most, of them, particularly in Connecticut and New Hampshire. 

Discrepancy between eligibility and vaccination rates

Becker’s Hospital Review ranks states by the percentage of the population that’s been fully vaccinated. On March 31, the New England states ranked by that metric were:

Rhode Island 20.7%

Connecticut 20.5%

Maine 19.31%

Massachusetts 18.5%

Vermont 18.4%

New Hampshire 17.1%

Why would New Hampshire rank first in New England in eligibility but last in vaccinations?

A likely reason is that a relatively high percentage of the population has reported being reluctant to get the vaccine. 

The most recent U.S. Census Bureau Household Pulse survey for late March found that 57.5% of Granite Staters who have not yet been vaccinated say they will do so. That is the 15th highest rate in the country. Yet it puts New Hampshire below every other New England state.

Looking into the survey’s data tables shows that 15% of Granite Staters said they definitely or probably would not get the vaccine. That is below the national average of 17.2%, but it’s the highest percentage in New England. Rhode Island is next at 14.3%, followed by Maine at 13.2%, Connecticut at 10%, and Massachusetts and Vermont tied at 7.4%.

Although New Hampshire has rapidly expanded eligibility, making the vaccine available to more than two-thirds of the population by the end of March, a relatively high portion of the state’s population, relative to the rest of New England, is reluctant to be vaccinated.

The importance of persuasion

And that brings us to a point the Josiah Bartlett Center made last year about the importance of building trust for public health measures. Regarding business closures and mask mandates, we cautioned that mandates and restrictions can backfire if they cut against public opinion. They can cause resistance, making it harder, rather than easier, to achieve public health goals. The first step in pursuing public health goals during a pandemic is to explain to the public why changes in behavior are needed.

In a democratic republic, persuasion is the primary political currency. Where people pride themselves in being free to live their own lives on their own terms, government dictates can backfire, causing resistance and making it harder to achieve desired goals. This is true in public health as in all other areas of public policy.

New Hampshire has done its job on the distribution end, making the vaccines widely available and easy to obtain. To get the vaccination numbers up, the state next should devote additional resources to persuading Granite Staters to get vaccinated. 

Mass vaccination is the path out of the pandemic. Though the state has made this point, the federal government’s conflicting messages have caused confusion and delay. A more energetic and high-profile state campaign to encourage vaccination would help bring up our vaccination rates and move us more rapidly back to normal, or as close to normal as we can get.

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Two ways to to decide whether Right to Work is right for New Hampshire

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Most U.S. States (27) have Right to Work laws, and that includes a growing number in the industrial Midwest. Indiana, Michigan and Wisconsin have them, and every state bordering Ohio, save Pennsylvania, has one.  

As Right to Work laws have spread North and West in recent decades, they have hit a hard wall in the Northeast. Were New Hampshire to become a Right to Work state, it would not only be the first in New England, but the first on the East Coast above West Virginia.

That has made the fight over a Right to Work law here particularly bitter. Both sides understand that New Hampshire’s adoption of a Right to Work law could change the game in the entire Northeastern United States.

With such high stakes, it’s not surprising that facts often have been lost amid all the heated rhetoric. So it’s important to start by understanding exactly what these laws do.

Right to Work laws simply require an employee’s consent before an employer can redirect any portion of the employee’s pay to a labor union as dues, fees or other charges. 

Senate Bill 61, currently being considered in the Legislature, puts it this way:

“It shall be unlawful for any employer to deduct from the wages, earnings, or compensation of any employee any dues, fees, assessments, or other charges, to be held for, transferred to, or paid over to a labor organization, unless the employee has first presented, and the employer has received, a signed written authorization of such deductions, which authorization may be revoked by the employee at any time by giving written notice of such revocation 30 days in advance of its effective date.”

In pursuit of that goal, the bill further prohibits employers from entering into labor contracts that compel non-members to pay dues, fees or charges to a union. And it prohibits employers from discriminating against employees based on their union membership status. 

This isn’t extreme language. Michigan’s Right to Work law is phrased similarly. 

The core issue is individual employee rights. These laws do not prohibit collective bargaining, ban union organizing, or in any way prevent employees from unionizing or employers from signing union contracts. All they do is prevent such contracts from compelling non-members to contribute financially to unions.

But this primary purpose of Right to Work laws — the protection of individual freedom — tends to get lost in the political debate as the focus shifts to the economic effects. 

There is a wide variation in the quality of research on Right to Work laws, and therefore there is some confusion about what they show. Simplistic sloganeering often gets in the way of a clear look at quality data.

For example, opponents shout that Right to Work means “the right to work for less,” and they present charts that show lower average wages in Right to Work states. But of course, Right to Work laws for many years were primarily concentrated in Southern states with a much lower cost of living than the Northern states that did not have such laws. Simply controlling for cost of living and education levels erases much or all of that gap. 

Furthermore, such simplistic attacks divert policymakers’ attention so that they don’t spend time looking at the long-term effects of Right to Work laws on the economy as a whole. There, the research is much stronger — and much more favorable to proponents. 

A useful summary of the academic research on Right to Work laws comes from the West Virginia University College of Business and Economics. In 2015, West Virginia legislators were considering whether to adopt a Right to Work law. To help with that decision, researchers at the College of Business and Economics examined decades’ worth of past economic research on Right to Work laws. That study wound up being a good guide to thinking about whether a state should adopt a Right to Work law. (West Virginia legislators did pass a Right to Work law.)

The researchers went through academic studies that found both positive and negative effects of Right to Work laws. They summarized all those findings, then ran their own analysis of the data, controlling for outside influences to try to isolate the effects of Right to Work laws themselves, not of other factors such as overall regulatory climate, cost of living, etc. 

They found that Right to Work laws are strongly associated with higher levels of economic growth, higher levels of employment, and lower levels of union membership. On wages, the results were inconclusive.

This is generally consistent with a large body of research on Right to Work laws. Studies tend to find that Right to Work laws are associated over time with large gains in both employment and Gross Domestic Product. 

A good example of how Right to Work laws can improve employment and economic growth comes from research that looked at manufacturing employment in counties near the border between states that have Right to Work laws and those that don’t.

Manufacturing employment has been shown to experience large and rapid gains along the borders of Right to Work states when the neighbor is not a Right to Work state.

Right to Work states tend to grow faster and add jobs at a faster rate than states without Right to Work laws. As state competition for employers and employees becomes more acute, those higher growth rates will become increasingly more important. The data show pretty convincingly that over time states without Right to Work laws will fall further behind their faster-growing Right to Work competitors.

After the right to free association, that positive effect on the economy overall is where policymakers ought to be focused. 

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Bartlett report shows that Education Freedom Accounts will save taxpayer money, improve student outcomes

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A new study from the Josiah Bartlett Center for Public Policy finds that the Education Freedom Account program in Senate Bill 130 would save taxpayers $6.65 million in its first two years, decrease state aid to district public schools by only 0.024% by its second year, and decrease district public school enrollment by an average of only 0.8% in its first year and 2% in its second year.  (In the last decade, public school enrollments in New Hampshire have fluctuated by more than 9% a year, on average.)

It also would produce $30.6 million in higher lifetime earnings for students who take an EFA in the program’s second year, generate $12.9 million in economic benefits to the state by creating more high school graduates, and generate a savings to society of $163,000 from reduced felonies among the second year EFA class alone.

Below is the report’s executive summary. You can find the full report here: Analysis of SB 130 EFA Program. We post the tables for the appendices separately here: (appendix table C1) (appendix table c2) (appendix table c3)

Executive Summary:

Two bills introduced in the New Hampshire Legislature in January of 2021, House Bill 20 and Senate Bill 130, propose the creation of Education Freedom Accounts (EFAs) for NH families.  The EFA program would allow any NH resident eligible to attend a public school in grades K-12 to use his or her per-pupil state education grant to pay for a variety of educational services chosen from a state-approved list.  The Senate bill (SB 130) is moving forward after HB 20 stalled in the House.  This report analyzes the Senate version of the bill.

As amended in the Senate Education Committee, SB 130 limits eligibility to families whose household income is less than 300 percent of the federal poverty line (FPL), adjusted for household size.  If a family prefers their child’s assigned public school, then nothing changes.  State adequate education grant money is automatically sent directly to the school district, as happens currently.  If an eligible family prefers an alternative to their assigned school, parents could apply to create an EFA.  The state would deposit the student’s adequate education grant (plus any qualifying differential aid) into the EFA.  The family could then choose to spend that money on a number of pre-approved educational services, such as tuition at another public school, tuition at a private school, tutoring, special education services, tuition at a community college, and online education, among others.

This report provides a fiscal and economic analysis of this legislation, as well as a review of New Hampshire public education spending and academic outcomes in recent years.  It finds that:

  • The percentage of New Hampshire students eligible for EFAs is estimated to be 31.26 percent overall, and 31.1 percent for private school students.
  • The state can expect approximately 966 students to use an EFA in the 2021-22 academic year and 2,335 to use an EFA in the 2022-23 academic year.These estimates are based on take-up rates of similar programs in Indiana and other states, as well as a review of take-up rates of other government aid programs.
  • For the 2021-22 academic year, the average cost of an EFA would be $4,578.The projected cost to the state of the proposed EFA program would be $2.4 million, while local school districts would save an estimated $4.2 million, leading to a projected taxpayer savings of $1.85 million (with rounding).
  • For the 2022-23 academic year, the average cost of an EFA would be $4,803.The projected cost to the state would be $5.9 million, while local school districts would save an estimated $10.7 million, for a net taxpayer savings of $4.8 million.
  • The average reduction in state adequate education aid to local school districts would be $12,247 in the first year of the program and $32,126 in the second year, absent provisions in law that delay those reductions.  That is an average of just 0.048% of district revenue in the first year and 0.049% in year two.  But districts receive funding based on prior-year enrollment.  Therefore, there is no reduction in state aid to districts in the first year.  SB 130 requires that districts receive 50% of any lost EFA funding in year two as a “phase out grant.”  With that grant in place, district revenue would fall by only $16,063 on average in year two, which is just 0.024% of average district revenue.
  • The enrollment reduction per school district is projected to average 2.65 students (0.8%) in the first year of the program and 6.63 students (2%) in the second year. From 2010-2019, NH districts experienced an average annual enrollment change of 54 students, or 9.41% of their student populations.  Enrollment changes caused by EFAs would fall well below the average fluctuation for which districts budget on an annual basis.
  • Local school district savings would average $26,694 in year one and $68,005 in year two.
  • The average EFA grant is only 23% as large as the cost of educating a student in a traditional NH public school, so the taxpayer cost of educating a student through an EFA is 77% less than the cost of educating a student in a traditional public school.
  • The EFA program would result in a $28,744 increase in lifetime earnings per student for 1,063 public school students who choose an EFA in the second year of the program. That would generate a cumulative total of $30.6 million in higher lifetime earnings.
  • The EFA program would result in 43 more high school graduates among its second year class, generating an additional $12.9 million in economic benefits for those students.
  • The EFA program would cause a reduction in crime, generating a savings to society of $163,000 from reduced felonies among its second year class alone.
  • Adjusted for inflation, total expenditures in New Hampshire public schools increased by 66 percent between the 1994-95 and 2017-18 school years, while public school enrollment fell by 9 percent.
  • The number of teachers in New Hampshire public schools increased by 23 percent between 1994-95 and 2018-19, as the number of students fell by 9 percent.In addition, NH public schools increased their employment of non-teachers (all other staff) by 80 percent.
  • While current spending per student (a figure that excludes capital and some other expenses) increased by 77 percent between 1994-95 and 2017-18, average teacher salaries increased by only 1 percent (both adjusted for inflation).
  • Despite this large increase in spending per student and tremendous increase in staffing, New Hampshire public schools’ performance trends on the National Assessment of Educational Progress (NAEP) lagged the nation between 2003 and 2019. NAEP gains in New Hampshire have lagged the national average in Mathematics, and NH’s average Reading performance has fallen.
  • NH students’ academic performance has lagged behind the performance of the two states with the highest percentage of students enrolled in school choice programs, Arizona and Florida. In 2019, 6.7 percent of Arizona students and 4.9% of Florida students were participating in a state taxpayer-funded private school choice program.  Only two-tenths of one percent of New Hampshire students were participating in New Hampshire’s town tuitioning program (to attend a private school) or the state’s Education Tax Credit Program.  As shown in Section IV of this report, Arizona and Florida’s gains in NAEP scores far exceeded national changes and changes in New Hampshire’s average scores between 2003 and 2019.  Both Arizona and Florida have child poverty rates about 2.5 times higher than New Hampshire’s rate, and both states spend about 70 percent less per student than New Hampshire’s public schools.

In summary, the EFA program in SB 130 can be expected to save NH taxpayers $6.65 million in its first two years, educate students at less than 25% of the cost of a traditional public school, increase the number of high school graduates, and create $30.6 million in higher lifteime earnings for its first students, $12.9 million in economic benefits for students who otherwise wouldn’t graduate high school, and $163,000 in benefits to the state from a reduction in felonies.  In addition, evidence from other states suggests that the proposed EFA program is highly likely to improve outcomes for public school students who do not choose an EFA.

 

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Amid enrollment decline, N.H. school spending has risen sharply

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

Analyzing official state data, we found that:

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

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

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

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

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

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

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Merrimack Station, coal power and moral responsibility

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

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

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

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

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

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

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

But are they?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

That brings us back to the question at the beginning.

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

The answer is pretty clearly no.

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

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

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Why are we still debating school openings?

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

But that’s not true. 

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

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

The New York Times summarized the CDC guidance this way: 

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

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

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

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

Aa we pointed out in January:

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

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

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

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

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

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

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

Among the quotes:

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

— Archana Chatterjee, Dean, Chicago Medical School

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

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

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

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

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

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

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

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

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

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

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

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

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

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Spending restraint, stable tax base, strong economy save budget from worst 2020 fears

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

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

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

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

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

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

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

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

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

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

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

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

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