On Thursday, Gov. Chris Sununu vetoed a Democratic bill to impose a $168 million wage tax on New Hampshire employees for the purpose of limiting their benefit choices and forcing them to accept a state-run paid family leave program. Here are five reasons why a veto was the only responsible action for the governor to take. 

  • The tax to fund a mandatory, state-run paid family and medical leave program was entirely unnecessary. The governor had proposed an alternative program that would allow businesses to opt in. With a voluntary option on the table, there was zero need to create a state-run program funded by a $168 million annual tax on workers’ wages, and which cost $6 million a year to run.  
  • The mandatory program in Senate Bill 1 limited employee and employer choices. By forcing employers to offer this one particular benefit, SB 1 would have prevented many employers from affording other benefits that their employees might prefer. As we have reported before, national polls show that employees tend to prefer many other benefits, such as more flexible schedules and more robust health care benefits, to paid family leave. The bill also forbade businesses from offering a smaller paid leave benefit in combination with other benefits employees might prefer.
  • Because SB 1 potentially overpromised benefits, it allowed a commissioner to raise taxes. Were the bill to become law, employees would expect 12 weeks of paid leave at 60 percent of their pay. But the bill acknowledges that these benefits might exceed program revenues. It authorizes the Employment Security commissioner to reduce benefits or raise the wage tax. It also authorizes the commissioner to reduce the tax or increase benefits if the program generates a huge surplus. A huge surplus would indicate that the tax rate is set too high. The bill in that case should authorize only a tax cut, not a benefit increase.   
  • SB 1 imposed a political preference on businesses and employees that in the long run could make New Hampshire less economically competitive. Paid leave is politically trendy, but trends change. Future employees may demand a different benefit. Passing a law compelling employers to offer this benefit freezes resources that could be used to respond to changing market conditions. This makes employers less nimble and less competitive. 
  • Even if Granite Staters overwhelmingly preferred paid family leave over other compensation options, SB 1’s approach would be economically foolish. But there remains no evidence that Granite Staters demand this benefit over others. Supporters of the bill have cited several University of New Hampshire surveys to claim that Granite Staters support paid family leave. But none of the surveys, including one released on the day of the House vote last week, gives respondents the option of choosing other benefits or higher pay. Nor do they inform respondents that a paid family leave program could mean lower pay raises or reduced benefit options in the future. It’s disappointing that these surveys continue to leave out important information that is regularly included in national surveys of employees’ benefit preferences. 

House Democrats insisted on incorporating a mandatory paid leave program — and its $168 million wage tax — into the state budget, knowing that this could trigger a veto by Gov. Chris Sununu. It’s a strange hill upon which to die, considering that there’s no evidence Granite Staters are demanding this specific workplace perk. 

This month the UNH Carsey Center for Public Policy released a report asserting that Granite Staters support guaranteed job protection for paid family and medical leave programs and a 60 percent wage rate while on leave. 

This is about as useful to lawmakers as a ping pong table is to the Night’s Watch. It’s nice to have, but when the real work starts its minimal utility quickly becomes apparent.  

Nowhere did the survey ask whether respondents would prefer paid leave to other benefits such as flexible schedules, more health coverage or higher pay. Nowhere did it ask whether employees would prefer paid leave if it led to lower pay raises or reduced benefits in the future. Nowhere did it ask how much employees would be willing to pay for such a benefit. 

The 2016 UNH poll that purported to show broad support for paid family leave in New Hampshire also left out crucial questions. It did not give respondents the option of choosing from a list of other possible workplace benefits. The only cost it included was $5 per week, which is on the low end of the cost scale for various paid leave programs.

Other polls have asked such questions, and their results do not support the theory that paid leave is so critically important for employees that the state must guarantee it via a mandate and wage tax.

  • A 2017 Pew poll found paid leave statistically tied with more flexible work schedules as the most preferred new benefit, with 28 percent preferring schedule flexibility and 27 percent preferring paid leave. (That poll also found, by the way, that most Americans were satisfied with their workplace benefits and thought their employers cared about them and their well-being.) 
  • A 2017 study by data research firm FRACTL found that employees ranked paid parental leave 8th among a list of 17 benefit options. More popular were better health benefits, more flexible hours, more vacation time, work from home options, unlimited vacation, student loan assistance and tuition assistance.
  • A 2017 survey by payroll and benefits firm JustWorks found that flexible schedules and remote work options were far more popular among employees than unlimited paid time off or parental leave. Fewer than half of employees said unlimited paid time off or paid parental leave were important. 
  • A Cato Institute poll last December found that support for paid leave crashes when people are given the option of considering the costs. In the abstract, 74 percent of Americans support paid leave. But 60 percent oppose paid leave if it would lead to lower future pay raises. 

Paid leave is being pushed on Granite Staters as if it is universally acknowledged as the holy grail of workplace benefits. It isn’t. National polling shows that most employees prefer other benefits to paid leave. And even if it were the most popular benefit, that wouldn’t make it the right benefit for every employee or every employer. 

When employers are forced to offer this particular benefit over all others, employees are then forced to accept this particular benefit instead of others employers might have chosen. There is no compelling case for forcing this choice on all New Hampshire employees. Creating a budget showdown over an entirely unwarranted mandatory benefit would only compound the mistake.  

A new briefing paper from the Josiah Bartlett Center for Public Policy shows that the House’s 2020-2021 budget proposal spends $382.4 million more in state funds than Gov. Chris Sununu’s proposed budget and includes $417.7 million in new taxes and fees. 

The paper shows that the divergence in governing philosophies between the Republican governor and the Democratic House majority could hardly be more stark. 

Sununu’s budget would increase fiscal year 2021 general fund spending by 5.4 percent over fiscal year 2018. The House budget increases spending over the same time period by 14.8 percent.

The tax increases show an equally sharp philosophical divergence. 

Gov. Sununu’s proposed budget contains one expanded tax (extending the tobacco tax to cover electronic cigarettes) and a new fee (a charge on newly allowed sports betting). The House budget also expands the tobacco tax and includes the sports betting fee but also includes hundreds of millions of dollars in new taxes to cover the budget’s spending increases.

The House budget includes a sales tax on marijuana transactions ($4 million), business tax increases ($94.1 million), a new capital gains tax ($150 million), and a new wage tax (payroll tax) to fund a compulsory paid family and medical leave program ($168.6 million). 

Without those new taxes, the House budget does not balance. In fact, it also doesn’t balance without the surplus built up over the last two years.

Both Gov. Sununu and the House spend the current state budget surplus. But the governor treats the surplus as one-time revenue attributable primarily to the immediate stimulatory effects of the federal Tax Cuts and Jobs Act of 2017. He therefore dedicates the money to one-time appropriations rather than recurring spending. 

By contrast, the House treats the money as ongoing revenue and uses it to increase baseline state appropriations. Spending it this way requires future tax increases to sustain the higher level of spending, something the governor sought to avoid. 

The House budget would turn state taxation and spending sharply upward and put it on a rising trajectory into the foreseeable future.  

(A previous post in this space failed to account for a relocation of lottery revenues in the governor’s budget. That failure inaccurately put the House spending figure $584 million above the governor’s.)

A copy of the full report in pdf form is here: Budget Visions 2020-21-4.

 

New Hampshire’s Education Tax Credit Program is under fire from legislators who want to kill the program or reduce its funding. Unfortunately, much of the rhetoric accompanying these attacks is factually incorrect. Inaccurate and misleading statements have been used in testimony at legislative hearings, in public debate, and on social media in an attempt to discredit the program. This briefing paper corrects many of those misstatements and explains what the program is, who is eligible, and what little financial impact it has. 

Read or download the full report (pdf) here: The Education Tax Credit Program: Fact vs. Fiction.

 

Bartlett Brief:

Minimum wage increases hurt the lowest-skilled workers

Legislators on Thursday are preparing to vote on bills to mandate that employers raise wages to levels some politicians find morally appealing. These mandates will hurt the lowest-skilled workers. They also have the potential to raise costs for consumers and taxpayers.

  • House Bill 186 would raise the minimum wage by $2 to $9.50 an hour immediately, then to $10.75 in 2021 and $12 in 2022. Teens younger than 17 could be paid $1 per hour less than the statutory minimum. 
  • Senate Bill 271 would mandate that contractors on state public works projects pay all their workers the prevailing federal wage for the particular construction project. The federal prevailing wage for construction projects in New Hampshire is $10.60 an hour. 

Though intended to benefit low-wage workers, these bills together are likely to harm Granite Staters who are trying to grab that first rung of the economic ladder.

Minimum wage

  • A 2015 Federal Reserve Bank of San Francisco review of minimum wage studies confirmed that “the most credible conclusion is a higher minimum wage results in some job loss for the least-skilled workers—with possibly larger adverse effects than earlier research suggested.” 
  • The authors of Seattle’s famous minimum wage study reported last fall that the city’s wage hike raised pay for the most experienced workers but produced a significant reduction in employment among the lowest-skilled workers. “The entirety of these gains accrued to workers with above-median experience at baseline; less-experienced workers saw no significant change to weekly pay.”
  • A recent follow-up to the Seattle study found that the higher minimum wage raised the price of day care. “Providers’ most commonly responded to higher labor costs by raising tuition and reducing staff hours or headcount—strategies that may negatively impact low-income families and staff.” 
  • This podcast interview with University of Washington professor Jacob Vigdor provides a great analysis of the negative effects the wage increase had on Seattle’s lowest-skilled restaurant workers and those trying to enter the job market for the first time.  
  • A 2013 study for the National Bureau of Economic Research showed how minimum wage increases harm lower-skilled workers by eliminating many job opportunities for them. It found that “the minimum wage reduces net job growth, primarily through its effect on job creation by expanding establishments.” Businesses hire fewer people in the long run after governments mandate that they pay low-skilled employees an artificially high wage. 

Prevailing wage

Prevailing wage laws mandate that construction companies pay higher hourly wages to low-skilled employees than they otherwise would. Research on the effects of these laws on total construction costs are mixed. But much of the research is consistent with minimum-wage research showing that the mandates lead to a preference for higher-skilled employees. 

  • Some studies find increased costs for public works projects, as did a recent University of Kentucky study on West Virginia’s repeal of its prevailing wage law and a 2005 study of low-income housing construction costs in California.
  • Other studies, however, show that contractors adjust to mandated labor cost increases by hiring more high-skill, high-productivity employees and using capital to reduce the need for lower-skilled workers. Similar findings have been produced in minimum wage studies of specific industries. Many businesses respond to mandatory labor cost increases by hiring more productive workers and finding ways to reduce their need for the lowest-skilled labor. 
  • As automation takes off in the construction industry, government-mandated higher wages could increase the incentives for contractors to replace lower-skilled workers with machines. A study last year suggested that automation could replace 49 percent of America’s blue collar construction workforce. Self-driving graders and brick-laying robots are among the technologies already making their way onto construction sites.  

Summary 

By artificially inflating the price of low-skilled human labor, prevailing wage and minimum wage laws have the unintended effect of reducing employment opportunities for the lowest-skilled workers while artificially raising pay for people who have had the good fortune to have greater workforce experience. 

Though these wage mandates are intended to be a forced wealth transfer from businesses to low-income employees, they wind up creating a forced wealth transfer from the lowest-skilled workers to higher-skilled competitors. 

A pdf version of this brief can be downloaded here: JBC – Minimum Wage Warning.

Executive summary: Funding for the state’s Division of Children, Youth and Families has become a contested political issue in this year’s state elections. Framing the debate, former state Sen. Molly Kelly, the Democratic nominee for governor, asserts that the 2018-19 state budget signed by Gov. Chris Sununu prioritized tax cuts for the wealthiest corporations over child protection, thereby draining state revenue and leaving the division with less funding. This briefing paper takes a look at those claims. 

We find that the 2018-19 state budget signed by Gov. Sununu provided DCYF with its largest general fund spending increase in at least a decade. We find as well that the business tax cuts included in the budget were not targeted to the wealthiest corporations and did not cause DCYF funding reductions.  

DCYF Funding

NOTE: Until the 2014-15 state budget, the Division of Children, Youth and Families was a separate division of the Department of Health and Human Services, listed as a single category in the state budget. Starting in that biennium, DCYF was no longer listed in the state budget as a division. Its funding was divided into DCYF’s two primary component parts, “Child Protection” and “Child Development.” To make sure we were comparing apples to apples over the past decade, we asked the Legislative Budget Assistant to verify what budget categories constituted DCYF funding during that time period. The spreadsheet accompanying this brief (attached at the bottom of this post) is the LBA’s breakdown of DCYF’s core Child Protection and Child Development funding over the past decade, with the Sununu Youth Services Center budget shown separately. 

As with other state agencies, state general fund appropriations for the Division of Children, Youth and Families have fluctuated with the state’s financial fortunes. In the last decade, both political parties have cut state general fund spending on DCYF in leaner times and increased it when more money was available.

For example, the 2010-2011 budget was signed by Democratic Gov. John Lynch and written by a Democratic legislature, with Democratic Sen. and future Gov. Maggie Hassan taking the lead in the Senate. It cut state funding for Child Protection by 12 percent from 2009-2010 and for Child Development by less than a percentage point. 

The Republican-led Legislature cut state DCYF funding further as part of its broad spending reductions in the 2012-13 budget, which Gov. Lynch let pass without his signature. In the 2014-15 and 2016-17 budgets, DCYF state funding inched slightly higher. 

Then in the 2018-19 budget, Gov. Sununu and the Republican Legislature substantially increased state funding for DCYF. State general fund spending on Child Protection rose from $39,855,790 in 2017 to $45,857,006 in 2018, then to $47,688,777 in 2019. State General Fund spending on Child Development rose from $10,886,714 in 2017 to $11,391,914 in 2018 to $11,849,106 million in 2019. 

In total, state General Fund spending on DCYF was increased in the 2018-19 budget by $8,795,379, or 17.3 percent. 

No other budget in the last decade comes close to increasing DCYF funding by as large a percentage as the budget Gov. Sununu signed in 2017. Far from neglecting or underfunding DCYF, the 2018-19 budget treated it like a favored child. 

Business Tax Cuts

Legislators in 2015 passed business tax cuts to take effect on Jan. 1, 2016. They dropped the business profits tax rate from 8.5 percent to 8.2 percent and the business enterprise tax rate from 0.75 percent to 0.72 percent. A provision in the budget provided that the rates would fall again for fiscal year 2018 if general and education fund revenues hit at least $4.64 billion by the end of fiscal year 2017. Revenues hit $4.865 billion, easily exceeding the target, and on Jan. 1, 2018 the business profits tax fell to 7.9 percent and the business enterprise tax to 0.675 percent. 

The 2018-19 budget signed by Gov. Sununu introduced another round of business tax rate reductions. The business profits tax is scheduled to drop to 7.7 percent on Jan. 1, 2019 and 7.5 percent on Jan. 1, 2021. The business enterprise tax is scheduled to drop to 0.6 percent on Jan. 1, 2019 and 0.5 percent on Jan. 1, 2021.

Opponents of these business tax cuts have for more than a year floated a talking point which asserts that the 2018-19 budget contained $100 million in tax breaks reserved exclusively for the state’s wealthiest businesses. In some cases opponents have asserted that the tax cuts were for the richest 3 percent of businesses. 

Former Sen. Kelly has combined this attack with her claim that the budget shortchanged DCYF. For example, in an Aug. 30 opinion column for the New Hampshire Union Leader, she wrote:

“Sununu became governor knowing that DCYF and the state’s obligation for the safety of our children was in jeopardy. He has not done enough to fix it. Instead, his priority in his 2017 budget was giving away $100 million in tax breaks to the wealthiest corporations, when he should have ensured DCYF had every resource needed to protect our children.”

As detailed above, the budget Gov. Sununu signed in 2017 increased DCYF funding dramatically. Did it give away $100 million to the wealthiest corporations?

Neither the governor’s proposed budget nor the final state budget projected business tax revenue reductions. On the contrary, both counted on a growing economy to increase business tax revenue, which is exactly what has happened so far.

The governor’s proposed budget counted on business tax revenue growing by $31.7 million over the biennium (it also increased DCYF funding by $7.6 million). Rather than cut DCYF funding to account for lost business tax revenue, it proposed using increased business tax revenue to increase DCYF funding. The final state budget did the same thing.

The Committee of Conference that agreed on the final state budget projected business tax revenue of $662 million in 2018 and $672 million in 2019.  Available data suggest that these were conservative projections. Business tax revenues for fiscal year 2018 were $776.6 million, according to unaudited state figures. That’s 17.3 percent above plan and 22.4 percent above the prior year. 

How can one claim that the budget lost $100 million because of business tax cuts when it increased business tax revenue by $114 million — more than the supposed revenue loss — in only its first year?   

The $100 million figure likely comes from revenue projections presented by the Legislative Budget Assistant’s Office during the budget negotiations.  

The Legislative Budget Assistant provided an estimate of the cumulative value of the 2018-19 budget’s business tax cuts, which projected a revenue loss of $96 million through 2021 with another $86 million in 2022. It further estimated a $9.7 million annual loss from the budget’s expansion of allowable business profits tax deductions from $100.000 to $500,000. 

There are multiple problems with using those projections as the basis for claiming that the budget took money from DCYF to give to rich corporations. 

First, those estimates apply to tax law changes that take effect in 2019. If those rate reductions do materialize, they would have no effect on DCYF funding for the 2018-19 budget, which is already set.

Moreover, this theoretical future revenue loss is inconsistent with the results of the preceding business tax rate reductions. 

Business tax revenue exceeded projections by $132.8 million (23.4 percent) in fiscal year 2016 and by $72.7 million (12.9 percent) in fiscal year 2017, as recorded in the state’s official Comprehensive Annual Financial Reports for 2016 and 2017. Unaudited figures for fiscal year 2018 show business tax revenues coming in $114 million (17.3 percent) above state budget projections and 142.3 million (22.4 percent) above fiscal year 2017.

Since fiscal year 2016, when the business tax rate reductions took effect, revenues from state business taxes have risen, exceeding state projections by $319.5 million.  

The state has three years of data to show that business tax rate cuts did not starve the state of funding, but instead likely contributed to the increased economic activity that fueled an unexpected $319.5 million business tax windfall.

The revenue loss projections were made using static scoring, which does not take economic growth or changed business behavior into account. They represent a simple mathematical calculation of state tax receipts assuming that lower tax rates have no effect on anyone’s behavior. The state’s experience since 2016 shows why this is a bad way to project tax revenue. 

Moreover, neither the projections nor the rate cuts themselves support the claim that the budget’s business tax cuts were targeted to the wealthiest corporations. The rate cuts are not targeted to wealthy corporations but apply to all businesses that have to file New Hampshire business taxes. 

Conclusion

There is no factual basis for the claim that DCYF funding in the 2018-19 state budget was neglected or diminished because of reduced business tax collections. Because business tax revenue has been significantly higher than projected since rate cuts began in 2016, legislators were able to increase DCYF funding by 17.3 percent in the 2018-19 budget. The first year of that budget brought in an additional $114 million in unanticipated business tax revenue, more than making up for the alleged $100 million in hypothetical future business tax losses. Those hypothetical future losses have not caused reduced DCYF funding and are inconsistent with the results of business tax rate cuts from 2016-2018. 

SYSC-DCYF Budgets

 

Download a pdf copy of this brief here: JBC DCYF Biz Tax Brief

As of July, the average hourly wage for private employment in New Hampshire was $26.22, according to Bureau of Labor Statistics data compiled by the Federal Reserve Bank of St. Louis.

In February, New Hampshire recorded its highest average hourly wage on record, $26.89. (The Federal Reserve data show New Hampshire wages regularly peaking in winter, dropping a bit in summer.)

Even counting for inflation, New Hampshire’s real per capita personal income is up more than $4,000 since the recession.

Hillsborough County was in the top ten counties in the country for wage growth last year, and New Hampshire was among the top five states, according to Federal Bureau of Labor Statistics data released in August.

Amid all of this good news, activists and some politicians are telling everyone that things are bad for the simple reason that state law doesn’t mandate a higher entry-level wage.

This fixation on government mandates rather than the actual economy is a really telling difference in the way some people view the world. On one side, people look around and say, “things are good!” On the other, people bury their heads in statute books and say, “things are terrible!”

The “things are terrible” crowd is pushing again to raise the state minimum wage to $15 an hour. As always, the central assertion is that $7.25 an hour (New Hampshire’s minimum wage is the federal minimum) is not a ‘living wage.”

This is where the gap between the actual economy and economic notions expressed in law grows very wide.

The state Labor Market Information Bureau has compiled U.S. Census estimates for the number of people working at or below the minimum wage in New Hampshire. (Tipped jobs can pay below the minimum.) The data (based on surveys) show only 8,004 Granite Staters working at the minimum-wage or less in 2017.

That’s really low. In fact, it’s a 48 percent decline from the 15,284 Granite Staters estimated to have worked a minimum wage job in 2016. (The number for 2015 was 15,845.)

Why the drop? We don’t know yet. And because of the small sample sizes, it’s possible that a sizable chunk of the decline is a measurement error. Next year’s data will help fill out the picture. But even if 50 percent of the drop is a reporting error, New Hampshire would still have only about 11,600 people working at or below the minimum wage. That’s out of a working-age population of around 913,000, according to Census figures.

At the current estimate of 8,004 people, less than 1 percent of New Hampshire’s working-age population makes the minimum wage or less.

The data further show that 73.5 percent of Granite Staters making the minimum wage or less work in “food preparation and serving-related occupations.”

Tips, commissions and overtime pay are not included in the minimum wage figures, so the actual take-home pay of about three-fourths of New Hampshire employees who are classified as minimum-wage workers will be considerably higher than the minimum wage.

The Census estimates also show that 3,951 people, or 49.4 percent, of Granite Staters who make the minimum wage or less are between the ages of 16-24. These are high school and college-age employees with fewer skills and limited experience.

And experience, as in axe throwing or being Jose Canseco, is a key factor. Looking at the lowest-paying sector, food preparation and serving-related occupations, we see an entry-level wage of $8.36 an hour, a mean wage of $10.55 an hour, and an experienced wage of $13.76 an hour —just $1.24 an hour less than the $15 an hour wage some activists and politicians are demanding.

This tells us that wages are not a measure of a person’s moral worth or dignity, but of economic value. Employers pay inexperienced teens less than experienced adults for reasons that ought to be obvious to anyone who’s ever had a job or waited in line at a McDonald’s. And they pay higher wages to attract better employees.

Even in the fast food industry, competition for good employees is driving up wages so that the minimums in many paces are $10 an hour or higher.

More than doubling the minimum wage to $15 an hour would have a relatively small effect on the pay of experienced employees even in the lowest-paid industries. But it would have a big effect on entry-level positions, effectively pricing younger, less-experienced people out of those jobs.

In an economy in which employers are voluntarily raising wages, we are being told that the government must mandate a very high wage floor, which gets us back to the point about markets vs. laws.

Laws are expressions of moral values. Markets are expressions of economic values (mostly). Even when markets are pushing pay rates higher, people who view the world a certain way find this unacceptable precisely because it does not come from a moral directive.

For the conspicuously virtuous, everything all the time has to be an expression of moral values. Markets don’t operate that way. They consider tradeoffs, which the conspicuously virtuous rarely do. Everything is black and white, good or bad.

So even if markets are driving wages higher, society must act collectively to mandate that wages never fall below whatever the virtuous wage floor of the moment is. Refusal to pass such a mandate is considered a society-wide moral failure.

Or to put it in the contemporary vernacular, minimum wages are virtue signaling.

Every time you pay your electricity or heating bill, you’re lighting your money on fire. That is, you’re trading money for the energy released by burning some combustible material — natural gas, home heating oil, wood pellets, etc. So in effect, you’re burning your money.

That’s OK, it’s how a market economy works. You don’t make your own clothes or slaughter your own food or build your own home by hand, you pay other people to do those things. (Excepting some of you in the North Country.) When you trade money for energy, you’re basically burning money. The priority, then, is to burn as little of it as possible.

In New Hampshire, politicians keep preventing you from doing that. In fact, they continue to force you to burn more money for electricity than you would otherwise choose to burn.

On Thursday, legislators overrode Gov. Chris Sununu’s veto of Senate Bill 365. The bill forces electric utility companies to buy power at above-market rates from the state’s six biomass power plants and municipal solid waste incinerators.

The bill’s own fiscal note projected that it would cause electricity rates to rise by between $15 million and $20 million a year. So legislators knew exactly what they were doing. They knowingly voted to make you burn more of your money than necessary when buying electricity.

They’re very practiced at this. Over the years, legislators have passed one law after another to prohibit electric utilities from buying power at the lowest available price.

All of these costs add up. Here are just two examples.

A 2015 study by the Beacon Hill Institute found that New Hampshire’s Renewable Portfolio Standards would raise electricity prices by 3.7 percent by 2025, for a total impact of $70 million.

A previous biomass subsidy bill passed just last year, SB 129, also forced utilities to buy additional power from biomass plants. Its costs were estimated at around $75 million to $100 million.

To understand how these mandates make electricity more expensive, imagine you’re a cave man who needs to build a fire. Og is willing to offer you a bundle of wood he chopped himself for one rabbit pelt. Unk is offering you a bundle of organic, cured, and deodorized buffalo chips for one rabbit pelt and a handful of arrow heads.

You just need a fire. You’ve got a fresh squirrel in your deer-skin sack, you’re hungry, and you’ve got to make a new spear to replace the one you lost when that mammoth ran off with it dangling from its side. (WHY WON”T THOSE THINGS JUST DIE??) So you turn to Og.

At that moment, the clan’s code enforcement officer strides up to remind you of the clan leader’s decree that everyone has to use organic buffalo chips as a fuel source once a week. (Unk is the clan leader’s cousin.) You used wood every day this week. You’ve got to buy the dung.

You give Unk your worst arrow heads, naturally, but now you’re out all those arrow heads and will have to make more. You’re no warmer than you were before. The fire didn’t cook your meat any better. It just cost more because someone with power ordered you to support the organic dung industry.

There are other ways politicians and regulators force prices higher. They can even be politicians and regulators in neighboring states.

Across the country, electricity prices have fallen thanks to the natural gas boom. But the prices fall faster and farther in places where politicians don’t block pipeline construction. In New England (and New York), politicians and regulators have made it extremely difficult to build new pipelines.

As ISO New England has pointed out, though natural gas power generation has grown tremendously in in the last 20 years, “the natural gas pipelines that deliver low-cost shale gas into the region have not been expanded at a commensurate pace.”

Public policy is a major reason why New Hampshire has the fifth-highest electric rates in the country.

Politicians could immediately lower those rates by repealing laws and withdrawing regulations that prohibit utilities from buying power at the lowest available market price.

Instead, legislators continue to add new laws that push prices ever higher.

Utilities want to sell us power for less money. They would if they could. But the state forbids it. This needs to stop. We shouldn’t allow our politicians to force us to light our own money on fire.

Labor Day weekend is a time for last trips to the beach, first trips to apple orchards, and getting into heated political arguments over the role organized labor in the 21st century.

Ah, autumn.

This is the first Labor Day after the U.S. Supreme Court’s famous June 27 Janus decisionin which the court held that “(t)he First Amendment is violated when money is taken from nonconsenting employees for a public-sector union; employees must choose to support the union before anything is taken from them.”

The media’s instant reaction was to predict huge financial losses for unions. That’s a reasonable short-term take. A Josiah Bartlett Center right-to-know request found this summer that unions representing New Hampshire state employees stand to lose $1 million a year in agency fees they had been confiscating from non-union employees.

But the Janus ruling also presents a growth opportunity for public-sector unions.

By devoting themselves so wholeheartedly to political activism, public-sector unions have alienated members of the public as well as many government employees who might otherwise be inclined to join.

In a state like New Hampshire, where state and local government employees are often registered Republicans (including the current and immediate past chairmen of the state Republican Party), partisan political activity can serve to suppress union membership.

Yet, as Josiah Bartlett Center President Andrew Cline writes in a column published in USA Today this weekend:

“Public sector unions can serve either their members or the Democratic Party, not both. On a Labor Day weekend more than two months after a stinging Supreme Court defeat, it isn’t clear that their leaders realize this yet.”

Union leaders don’t seem to realize something critical about the Janus ruling: It created a competitive marketplace for public-sector union representation.

Now that public-sector unions can no longer rely on forced financial support from unwilling government employees, they must behave as other organizations in competitive marketplaces do.

“To win new members,” Cline writes, “they have to prove that they offer public employees a valuable service at a great price. If they do that, the can not only survive, they can also grow.”

Please read the whole column online here as you’re taking that last stroll on some sandy shore or stuffing your mouth with delicious grilled meat. It’s the perfect way to show your friends and family that you’re dedicated to maintaining the true spirit of Labor Day as they try to get you to pay attention to them.

New Hampshire, Vermont, and Maine are so white that if a map of the United States were colored according to the skin pigmentation of its residents, Northern New England would look like a snow-covered peak. We could go as a ghost for Halloween without even dressing up. And that’s a potential problem.

Some New Hampshire business and civic leaders recently held a conference to discuss ways to make the state more diverse. This drew nationwide media coverage, including a story in The New York Times. And a lot of shouting. When it comes to anything that touches on race, people really like to shout.

Some of the hostile reactions were knee-jerk racism. Others were labeled racist unfairly. (NHPR summarizes many of the responses here.)

We suspect that had the forum been purely a community or business effort, it would have been little noticed. But once the state gets involved in a cultural initiative, residents have a sense of ownership over it. Government involvement instantly politicizes anything.

People hear that the state is pursuing a diversity initiative, and they read into that all kinds of things. First, they hear the word “race” instead of “diversity.” That’s because the left has conditioned people to think of the latter as a code word for the former.

And because “diversity” has become a political buzzword of the left, it would be easy to assume that the end result, if not the goal, of a diversity initiative would be to make New Hampshire more politically liberal by recruiting people who have a tendency to vote for liberal politicians.

Diversity also implies cultural changes, and that always generates concern that community values will be shifted.

But the message from the forum that generated all the yelling and name calling was decidedly uncontroversial. It’s a message New Hampshire has to take seriously because the state’s future depends on dealing with diversity, broadly defined.

New Hampshire’s economic growth is probably at a turning point. Our tax policy has given us the foundation for having a great economy, but our workforce shortage is threatening our economic future. Simply put, we don’t have enough people.

(People bring not just bodies, but ideas.)

As this newsletter has pointed out before, New Hampshire’s economic growth has for decades been driven not just by low taxes, but by in-migration fueled by those low taxes. That in-migration has slowed, and that’s a huge problem.

Our population is older, our young people prefer to spend early adulthood in more urban areas with higher concentrations of young adults. This is a universal human tendency.

To grow, we need new immigrants. As the nation’s population becomes less white, New Hampshire’s whiteness becomes a potential economic problem. If the state is seen as unwelcoming to non-white Americans, a shrinking percentage of the U.S. population will be interested in moving here.

New Hampshire is not “too white” in any abstract sense. There is no perfect racial or ethnic ratio by which government can judge a state’s population. But the fact that our state is remote, rural, and largely ethnically homogeneous does pose economic challenges.

The term “diversity” has been used for so long as a political weapon that many of us lose sight of its broader meaning. The historical truth is that places that are more open to people from different cultural backgrounds are places that enjoy greater prosperity and create more complex and vibrant cultures of their own.

Great civilizations grow from trade. But it’s not just the economic aspect of trade that benefits a city, state or nation. The exchange of ideas and cultures that comes from a mixing of diverse peoples stimulates new ideas and enterprises. It essentially incubates entrepreneurship and innovation.

This is why remote, mountainous regions of the world are generally less economically prosperous than port cities and communities built at the intersections of trade routes. It’s not just that it’s harder for wagons or ships or trucks to reach those places. It’s that they don’t get to drink from the cultural stew created in the melting pot coastal cities and crossroad communities.

It turns out that diversity itself is a driver of prosperity and growth.

Granite Staters can and should discuss (or shout about) the proper role of the state in pursuing “diversity,” however we choose to define that word. There’s a case to be made that the state shouldn’t try to manage the racial or ethnic makeup of its people in any way because even taking a few small steps down that path is dangerous.

But that doesn’t mean that Granite Staters shouldn’t be concerned about the perception other people have of our great state, and their willingness to move here. Just as New Hampshire’s economy depends on tourism, its economic future depends on the intellectual, cultural and economic exchanges that will or will not take place here in the years to come. Generally speaking, our economic future will be stronger if the people who participate in those exchanges come from a broadly diverse set of backgrounds.