The West’s top musical acts all play Los Angeles (population 3.8 million), one of the world’s great concert cities. Legendary singer Van Morrison scheduled his new U.S. tour to start there in October—two nights at the famous Orpheum Theater, Oct. 19th and 20th. But then some guys from New Hampshire called him.

Morrison’s tour schedule had him flying to L.A. from England, where he is set to perform at the 1,700-seat Brighton Dome on Sept. 27th and 28th. The enterprising team behind Jimmy’s on Congress, a hot young jazz club in Portsmouth and one of the best music venues on the Eastern Seaboard (really), spied an opportunity. According to New Hampshire Business Review (NHBR), they reached out to Van Morrison’s team to see if he could stop in Portsmouth for a pair of shows on his way to L.A.

This is a little like the Toledo Mud Hens asking the Los Angeles Dodgers to stop for a three-game series on their way to New York. Van Morrison plays in large theaters that seat thousands. Jimmy’s is a night club that seats 312, mostly at tables and the bar (where the cocktails are great).

It was a plan so crazy it just might work.

The booker at Jimmy’s told NHBR that Van Morrison’s team said he could do it on one condition, NHBR reported. The club had to make some tickets available through Ticketmaster’s dynamic pricing system. 

The old-fashioned way of selling concert tickets is to use a fixed price. That’s the number that used to be printed on paper tickets (remember those?). Anyone who tried to get tickets to hot shows in the 1970s and ‘80s can tell you the problems with that system. You had to go wait in long lines at the venue (or try to get through on the phone), and the top shows would sell out quickly, with no way to find second-hand tickets other than answering a newspaper classified ad that you hoped was real, knowing a guy who knew a guy who knew a guy whose girlfriend couldn’t go that night, or traveling to the venue the night of the show in the hope that someone would sell you a ticket on the street. 

Today’s technology lets anyone anywhere have a chance at buying tickets online, which obviously has its own drawbacks, most notably quick sellouts and sabotage by bots. It also lets venues adjust ticket prices in real time, which is a feature not a bug.

Using dynamic pricing, the most valuable seats for a high-demand show will rise in price until they hit their market clearing value. People outraged by this system think the “actual price” or “true value” of a concert ticket is whatever number the venue decided to offer the tickets for the moment they went on sale. But that number doesn’t mean much.

As we discussed previously, a ticket’s printed price isn’t necessarily the actual market value. It’s usually set somewhat below market value to encourage a sellout. Venues make more money on concessions, so their incentive is to fill the seats. 

With dynamic pricing, tickets start at a certain price, but as in an auction the price can change if more people keep bidding for the same item.

Jimmy’s used dynamic pricing for some of its Van Morrison tickets. The top seats there went for $2,502.50 and $3,102.50 each, plus more than $500 in fees, according to NHBR.

After the show sold out, the predictable complaints about “price gouging” could be heard on local talk radio and on social media. People claimed that Van Morrison finally came to New Hampshire and they were denied tickets because the prices were so high.

Wrong.

Van Morrison came to New Hampshire only because the prices were so high. 

His October 19th show in L.A. sold out immediately. Tickets for the October 20th show range from $183.40 in the back row of the balcony to $344.85 for a restricted-view seat in the second row of the orchestra. Sorry, but you were never going to see him for $100 at a 312-seat club in Portsmouth. To make that small venue work, prices had to be many times higher than for one of his regular shows.

Dynamic pricing didn’t deny Granite Staters a chance to see Van Morrison. It gave Granite Staters a chance to see Van Morrison. Far from being “gouged,” fans were given a once-in-a-lifetime opportunity to see one of the greatest pop singers of the last 60 years at a small club in northern New England. Honestly, that’s amazing.

In the last legislative session, some legislators who don’t understand how prices work tried to ban “ticket scalping.” After this week, you can be sure someone will try to ban “gouging” as well as “scalping” next year. 

All such bans are really efforts to impose by law an economic misconception, which is that “price” is the same as “value.” It isn’t. 

A price set by a vendor might or might not be close to the actual amount of money consumers are willing to pay. When it isn’t, prices adjust up or down depending on the behavior of consumers. 

No one complains when vendors have to slash prices to clear inventory that they priced too high. But somehow it’s supposed to be immoral if vendors, either at the point of sale or in a secondary market, see that the initial price was too low and adjust the numbers up rather than down.

Calling this immoral is nonsense. Trying to ban it is harmful. Everyone would be better off if legislators stayed out of the way and let concert prices sort themselves out in an open and competitive marketplace. Consumers are best served when their preferences are expressed through the market rather than invalidated by government edict. 

Governments only ban what people would otherwise do voluntarily. If people would willingly pay thousands of dollars to have dinner eight feet away from Van Morrison in Portsmouth, as opposed to spending thousands to fly to England or California to see him in a large venue, the government has no business trying to stop them.  

Massachusetts’ millionaires tax makes it harder for the New England Patriots to recruit top players, former Patriots coach Bill Belichick said on Monday.

Asked about the millionaires tax on The Pat McAfee show, Belichick said, “That’s Taxachusetts. They take more from you.”

Because the NFL’s high pay makes most players millionaires these days, the tax implications of playing in Massachusetts are factored into player contract talks, the Patriots legend said.

“Virtually every player, even the practice squad, even the minimum players are pretty close to $1 million,” he said. “Once you hit the $1 million threshold, you pay more state tax in Massachusetts. Just another thing you’ve got to contend with in negotiations up there. It’s not like Tennessee or Florida or Nevada. Some of these teams have no state income tax. You get hit pretty hard on that with the agents.”

How many people can name any of the handful of states that have no income tax? Belichick quickly rattled off the names of three without even thinking about it.

If NFL players, coaches and agents think enough about high taxes to know which states have no income tax, what about other high earners?

For the second year in a row, the Massachusetts Society of Certified Public Accountants has issued a report warning that the millionaires tax is driving high-income professionals out of the state.

“The survey results indicate a concerning trend: a significant number of high-income individuals and businesses are considering or have already relocated out of Massachusetts,” according to the report. “This outmigration coincides with the surge in the number of taxpayers impacted by the surtax.”

More specifically:

“Every individual surveyed said that overall tax policy in the Commonwealth was either the primary reason clients are moving or one of the reasons that clients are considering moving. 55% of those surveyed earlier this year indicated that tax policy was the primary reason for relocating. Nearly everyone surveyed stated that the millionaires tax specifically factored into their client’s decision to relocate, with 64% stating that the tax was one of the reasons that their client is considering moving their domicile and 34% indicating that the tax was the primary reason for relocating.

‘Two-thirds of those surveyed reported that at least one of their clients has already established their domicile away from Massachusetts within the last 12 months. Many high-income residents are seriously considering changing their domicile, with 90% of respondents indicating that their high-income clients are considering moving from Massachusetts in the next year. This has increased by 8% in just one calendar year, from 82% of individuals surveyed in 2023.”

The top states Massachusetts millionaires say they’re eyeing? New Hampshire, Florida and Texas. (Two of the three have NFL teams, by the way. All three have no income tax.)

“Fifty-three percent of accounting professionals say that their clients are considering moving across the border to New Hampshire, suggesting that the tax burden imposed by Massachusetts plays an important part in the decision to relocate — and refuting the claims that individuals are just relocating due to a desire for sunnier weather and more coastline,” according to the CPAs’ report.

High taxes don’t send only millionaires packing. For years, the Tax Foundation has documented the moving habits of Americans and found that there’s a consistent trend of people moving from high-tax to lower-tax states. This year’s report showed that average Americans continue to flee high-tax states for lower-tax ones.

“The U.S. population grew 0.49 percent between July 2022 and July 2023, an increase from the previous year’s 0.37 percent. While international migration contributed to population growth at the national level, interstate migration was the key driver of net population changes at the state level. The U.S. Census Bureau’s most recent interstate migration estimates show that New York lost the greatest share of its population (1.1 percent) to other states between July 2022 and July 2023. Not far behind was California, which lost 0.9 percent of its residents, followed by Hawaii (0.8 percent), Alaska (also 0.8 percent), and Illinois (0.7 percent). At the other end of the spectrum, South Carolina saw the greatest population growth from net domestic inbound migration (1.6 percent), followed by Delaware(1.0 percent) and North Carolina, Tennessee, and Florida (all 0.9 percent).

“This population shift paints a clear picture: Americans are leaving high-tax, high-cost-of-living states in favor of lower-tax, lower-cost alternatives. Of the 32 states whose overall state and local tax burdens per capita were below the national average in 2022, 24 experienced net inbound migration in FY 2023. Meanwhile, of the 18 states and D.C. with tax burdens per capita at or above the national average, 14 of those jurisdictions experienced net outbound migration.

“Though only one component of overall tax burdens, the individual income tax is particularly illustrative here. In the top third of states for population growth attributable to domestic migration, the average combined top marginal state income tax rate is about 3.8 percent. In the bottom third (including D.C.), it’s 3.5 percentage points higher, at about 7.3 percent.”

Supporters of Massachusetts’ millionaires tax boast that it brought in far more revenue than predicted. This means that it’s a net gain for the state, they say. Given that 53% of Massachusetts accounting professionals said their wealthiest clients are considering moving to New Hampshire for its low taxes, it would be to New Hampshire’s short-term advantage for Bay State politicians to continue thinking that this punitive 9% income tax is good for their state. When wealthy people move here to escape high taxes, they tend to vote to keep New Hampshire’s taxes low. They also invest in their new home state, give to its charities and otherwise participate in its economic and civic life.

But in the long run, this misguided tax will hurt New Hampshire too if it slows down the Massachusetts economy. We do better when our neighbors do better. Ultimately, all of New England would benefit were Massachusetts (as well as all of our other high-tax neighbors) to pursue a competitive rather than a punitive tax policy.

 

 

 

 

There’s more that can be done to make New Hampshire a freer state for education entrepreneurs looking to start small, decentralized, and unconventional educational environments, but so far the state is doing better than most.

That’s according to the Education Entrepreneur Freedom Index released by the yes. every kid. foundation

Of 10 possible points that a state could earn, only three states attained the high score of seven. New Hampshire finished with six points, one of only 10 states with at least six or more points in the Index.  

The Index measures the extent to which regulations affect education entrepreneurs in each state, the imagined environment of which is a small, non-religious educational setting with school-age learners from a group of families participating in educational activities for part of the week. 

The Index evaluates each state according to 10 questions that account for the following five regulatory areas: business registration, homeschool laws/regulations, nonpublic school laws/regulations, child care laws/regulations, and occupancy codes. The questions are:

  1. Can the educational environment operate without getting a state business license under state law?
  2. Does the state allow for unlicensed, unregistered, unaccredited, or unapproved non-religious, nonpublic schools?
  3. Does the state allow nonpublic schools to operate without imposing educational requirements on teachers?
  4. Does the state’s homeschool law support or facilitate the operation of the educational environment?
  5. Can the educational environment operate in accordance with the state’s homeschool law without registering?
  6. Does the state allow homeschool instruction without imposing educational requirements on instructors?
  7. Does the state allow child care facilities to operate without imposing educational or qualification requirements on administrators/supervisors/teachers?
  8. Do the state’s child care laws and regulations provide a clear exemption for “Drop In/Open Door” programs?
  9. Do the state’s child care laws and regulations provide a clear exemption for educational programs for school-age children?
  10. Does the state adapt the application of occupancy code requirements in recognition of the existence and needs of small learning environments?

States with more relaxed homeschool and nonpublic school laws/regulations score higher, as entrepreneurs have an easier time getting started in these states. 

Child care regulations represent a near ubiquitous obstacle to alternative learning environments, and occupancy codes are disproportionately burdensome to small learning environments, the authors noted in a presentation upon the study’s release.

Though New Hampshire lost a point for rules requiring state approval for nonpublic schools, the state could become much more friendly to education entrepreneurs, the study’s authors conclude, primarily by relaxing some child care rules and local regulations.

State laws setting strict education and professional qualifications on child care personnel and the absence of clear exemptions for drop-in/open-door programs cost the state two points in the Index. The lack of clear exemptions for small learning environments such as microschools is a problem in New Hampshire. 

Some states, such as Oklahoma, exempt programs consisting of school-age homeschoolers three years of age and older from its child care licensing laws and regulations. 

New Hampshire is marked down on question 10 because of the local zoning and occupancy codes that often represent onerous barriers for aspiring microschools. 

As the Index makes clear, local zoning laws and regulations have emerged as primary roadblocks to the proliferation of microschools across the country with the growing education freedom movement. And the Live Free or Die state, with its especially burdensome web of local exclusionary zoning rules, is no exception. 

One way New Hampshire could improve its score in the Index is to loosen these local zoning restrictions hindering small learning environments. 

While some towns are more lenient than others, often the most daunting hurdle to starting a microschool is finding a permissible location. This is especially true if the microschool founder doesn’t want to operate out of their own home. 

Although homeschooling is only lightly regulated in New Hampshire, those microschools that are more formalized than homeschool co-ops but less formalized than private, nonpublic schools are left in a legal gray area where they’re prohibited from many zoning districts throughout the state because they’re not a permitted use in those areas.

The main reason for that is because education is not allowed by right in New Hampshire.

Recent actions taken by state lawmakers in Utah can offer guidance to legislators in New Hampshire on how to reduce the Granite State’s zoning burden on microschools. 

With just a few words, Utah legislators struck a huge blow to local zoning ordinances impeding the establishment of microschools throughout the state. Senate Bill 13 states, in part, “A charter school, home-based microschool, or micro-education entity shall be considered a permitted use in all zoning districts within a municipality.” 

Signed into law by Gov. Spencer Cox, microschools are now recognized as businesses without any location restrictions in Utah

The bill defines a “home-based microschool” as “an individual or association of individuals that: (i) registers as a business entity in accordance with state and local laws; and (ii) for compensation, provides kindergarten through grade 12 education services to 16 or fewer students from an individual’s residential dwelling, accessory dwelling unit, or residential property.” 

Any alternative/unconventional educational environment that fits this definition could set up shop in any zoning district within any Utah municipality under SB 13. As such, the language in Utah’s bill essentially makes education allowable by right across that entire state. 

Such a path forward is a realistic option for New Hampshire to take to become an even freer haven for education entrepreneurship, and state lawmakers wouldn’t even need to define “microschool” in law to do so. 

Just this past legislative session, New Hampshire state lawmakers did essentially the same thing for home-based child care. House Bill 1567 requires local zoning and planning regulations to allow family or group child care programs as an accessory use (by right) to any primary residential use throughout the state.

The same thing could be done for education, as we recommended in March.

By providing that education is similarly allowed by right in all zoning districts within a municipality (and all nuisance laws still apply), New Hampshire could tear down all local exclusionary zoning laws prohibiting microschool usage across the state in one fell swoop. 



Steeplegate Mall in Concord is coming down. The city granted approval this month for the building’s demolition. 

Yes, the owners of a mostly vacant large building that has become a magnet for crime (181 police calls in the last two years) needed the government’s approval to take it down and replace it with infrastructure people will actually use, like homes and a Costco.

The mall’s been largely empty since 2022. The redevelopment proposal (mixed use, retail and residential) has been moving along relatively quickly, as these things go. There haven’t been the usual disruptive community meetings with protests and long delays to get multiple variances just to replace an eyesore with something the city actually needs and people actually want.

That’s because the city rezoned the mall property years ago. It sits in a Gateway Performance District, which allows multiple uses and is designed to attract development. That’s made all the difference.

The city loosened land use restrictions to encourage economic development, and guess what happened? Economic development. 

Concord officials anticipated that the land where a huge suburban shopping mall sat might one day be put to a different, better use if market conditions changed. Because they had that foresight, a mammoth commercial structure no longer in demand will be converted relatively easily into buildings that are in very high demand.

A lot of the news stories about the mall in the past two years have focused on what Concord is losing. An outdated movie theater, a pickleball club, a community theater. An NHPR story mused about what the evictions from the mall would mean for Concord’s arts scene. 

It takes a stupefying lack of imagination to see a defunct shopping mall and lament what is lost rather than celebrate the possibilities of its transformation. 

Humans, left to their own devices, will build. They’ll create vibrant communities in which entrepreneurs devise ingenious ways of making their fellow citizens happy. Unless government forbids it. 

Governments forbid behaviors for one reason. People would otherwise do the forbidden things.

Hurting people and taking people’s stuff ought to be forbidden. But building a residence beside (or on top of) a store? Building a tiny house on a half-acre lot? Placing your home 46 feet instead of 50 feet away from the curb? These are not behaviors that harm others. 

Yet governments all across New Hampshire ban perfectly reasonable property uses like these. Why? Because some people prefer them. Without a government prohibition, people would build the kinds of mixed-use residential and commercial properties the market demands. And that just can’t be allowed, even in the “live free or die” state.  

Tuscan Village in Salem was once a horse track. When Tuscan Village was proposed, it was illegal. Salem had to change its regulations to make it legal for an entrepreneur to turn an abandoned dog track into a beautiful mixed-use residential and retail village.  

If New Hampshire wants to live up to its motto, it must repeal or relax many of the regulations that make it illegal for entrepreneurs to unleash their creativity. Local governments have to stop worrying so much about preserving the past and let entrepreneurs imagine the future. Preservation has its place. But innovation does too. And right now too many of our development rules are focused on preservation at the expense of innovation.

On housing, a consensus has settled in among Granite State voters. It can be summarized in four main points:

  1. New Hampshire desperately needs more housing.
  2. Local governments should lift regulatory barriers to the construction of new housing.
  3. The state government should act to prompt local regulatory changes.
  4. Multifamily housing is acceptable in suburbs and rural areas.

The St. Anselm College Center for Ethics in Society has polled New Hampshire voters on housing since 2020. The 2024 poll, released this week, shows that voters’ views have solidified into a strongly pro-construction, anti-regulatory, pro multi-family majority. 

A supermajority (75%) agrees with the statement, “my community needs more affordable housing to be built.” 

Roughly 60% (59%-62%) welcome the construction of affordable housing in their own neighborhoods, the relaxation of local land use regulations to allow that construction, the building of multifamily housing in suburban and rural zones, and state intervention to make all of this happen. 

In the 2020 poll, just 28.7% agreed that local governments should relax their planning and zoning regulations to allow the construction of more housing. 

In the spring of 2021, the poll found a 10% increase, to 39%, of voters saying local governments should relax planning and zoning regulations. 

In the fall of 2021, the Josiah Bartlett Center for Public Policy released our landmark study showing that local land use regulations were the primary cause of the state’s housing shortage.

The next year, the percentage of N.H. voters who agreed that local planning and zoning regulations should be relaxed to allow for more housing shot up to 52%. It now stands at 61%.

High-profile conversations about specific policy problems matter. By 2021, Granite Staters were becoming more receptive to the idea that local land use regulations were a problem. A push by the Bartlett Center and others to identify the root cause of the housing shortage and propose solutions helped more people understand the problem and demand the right fix, rather than continue to falsely blame developers or the market.

Today, a strong majority of voters understands the problem and demands that it be fixed. Yet local voters and boards have not gotten the message. 

A few recent examples:

Hampton Falls rejects proposed 88-unit condo project on Route 1

Owner: McIntyre building still a parking lot due to Portsmouth zoning rules

Stratham select board sues town zoning board over 59-unit condo approval

Exeter 120-plus apartment project faces opposition

Portsmouth board rejects plan to raze 1900-era home for four new houses

Board nixes variance for North Newport senior housing project.”

New residential developments are being approved in New Hampshire. But boards continue to reject housing proposals simply because pre-existing regulations don’t allow the type of housing the market now demands. 

In the Hampton Falls and Stratham stories linked above, boards rejected variance requests because members didn’t want to contradict old, outdated rules.

In the Newport example, the rural zone doesn’t allow multifamily housing. Since the developer could conceivably propose a different use for the property than its highest, best, most in-demand use (multifamily housing), the board rejected the proposal. 

Though Granite Staters now say overwhelmingly that they welcome multi-family housing in suburban and rural zones, local boards continue to reject such proposals simply because old rules don’t allow them.

This discrepancy between voter and market demand on one side and inflexible regulations on the other cannot continue indefinitely.

The Center for Ethics in Society polling shows that on questions of housing, large majorities of New Hampshire voters are on the side of developers, not local regulators. And they want the state to act if local governments won’t. 

Voters say housing is the “most important problem facing New Hampshire,” the UNH Survey Center found last month. Thirty-six percent of voters named housing as the state’s top problem. In second place was education, with only 7% of voters naming it the top problem. 

In the most recent legislative session, the House Education Committee dealt with 156 bills. 

The number of bills referred to the Special Committee on Housing? Nine.

Housing beats education as the top concern of voters by 29 percentage points. But legislators, like local land use boards, are operating on outdated beliefs. They’ve yet to adapt to the changing voter preferences. 

But there’s an election this fall, and we’re already seeing candidates campaign on pro-housing agendas. 

Given the firmly solidified pro-housing position of most voters, hardened each month by news of rising home prices, and the slow pace of change at the local level, it would be political malpractice for lawmakers not to make significant regulatory reform a top priority next year.

For years, we’ve predicted exactly this development. The slow pace of change at the local level has voters turning to the state for solutions. So far, legislators have been reluctant to act. That won’t be the case much longer. The pressure to act is too great.

It’s a safe bet that we’ll see a significant increase in legislative proposals to address the housing shortage in 2025. People are tired of waiting for government to get out of the way and let developers solve the housing shortage government created in the first place. 

 

From 2013–2022, the Manchester Transit Authority (MTA) increased spending by more than a third and rapidly expanded service offerings to try to increase ridership. It was a colossal failure, as we highlighted in April. Instead of acknowledging the failure and changing course, the federal government this week announced a massive infusion of additional resources

Washington has committed $19.9 million to build a new city transit center (after the original closed due to a shortage of riders) in an effort to reverse the government’s previous failure to induce ridership through additional spending. 

New Hampshire’s congressional delegation announced Tuesday that the money would be used “for the construction of a new transit center which will replace the city’s outdated facility and enable an expansion of transit services in the region,” according to reporting from Manchester Ink Link

Yet the city has already spent a decade trying to induce ridership by financing additional services, with terrible results. As we documented in our own study back in April, ridership on MTA buses fell by 38.6% from 2013–2022. 

That sharp decline in ridership coincided with soaring MTA funding. Local taxpayer spending alone on the MTA increased by 38.2% above the rate of the inflation from 2013–2022. Over the same period, funding from the federal government jumped by 37.1% after adjusting for inflation. 

Overall, the MTA’s total operating expenses increased by more than $1.6 million from 2013–2022 in nominal dollars, or 22% above the rate of inflation. 

A lot of that spending was dedicated to expanding services to attract new ridership, just what the new federal grant is intended to achieve. 

Total miles driven by the MTA went from 536,627 in 2013 to 817,081 in 2022, an increase of 52.3%. Similarly, the MTA’s total hours driven jumped 59.3%, from 46,159 total hours in 2013 to 73,521 total hours in 2022. 

Additionally, from 2013–2019, the MTA’s service population was 135,366 residents with coverage over 63 square miles. Since the 2020 census, the MTA’s service population grew to 248,263 residents with coverage over 235 square miles, increases of 83.4% and 273%, respectively. 

But despite all these increases in its scope of service, ridership on MTA buses continued to plummet. As a result, the MTA’s cost per rider went from $7.93 in 2013 to $18.65 in 2022, an increase of 135.1% in just 10 years.

Nevertheless, U.S. Sen. Jeanne Shaheen hailed the new funding as a huge win for Granite Staters. 

“Transportation helps drive growth for local economies and connects communities and Granite Staters to opportunity and to one another,” Shaheen said. “This federal funding will provide crucial updates and upgrades to the public transit systems in Manchester and Durham, supporting continued economic growth in these regions while making progress toward our clean energy goals.”

There are several problems with this line of thinking. First, just throwing more money at a problem doesn’t fix any of the underlying issues, especially in this case. If anything, the last 10 years have shown how throwing increasing sums of local and federal dollars at the MTA hasn’t done anything to reverse the continued drops in ridership. 

Moreover, Shaheen’s premise is wrong. Transit does not drive growth. The federal government’s own research has shown that this theory doesn’t stand up to scrutiny. As we’ve pointed out before, the Federal Transit Administration itself has concluded that “(r)ail transit investments do not stimulate real economic growth; rather they only influence where already-committed growth takes place.”

In other words, the federal government would be spending nearly $20 million not to induce new growth, but to induce people to choose one part of Manchester over another. And that’s the best-case scenario, if the spending has any effect at all. 

The reality is that the underlying issue afflicting the MTA is one that no amount of public funding can solve: Public transit is a declining service nationwide because people prefer other options. 

It’s no coincidence that major news outlets, from CNBC, NPR, and Axios to Bloomberg and Vox, have all reported over the past year on America’s declining public transportation systems. 

COVID-19 certainly spurred declining ridership across the country, but for the MTA at least such problems predated the pandemic. 

This conundrum can be explained with basic economics. Public services, insulated from the competitive forces of a free market and protected by continued public funding, don’t need to adapt to changing consumer demands and preferences to survive. If they’re at risk of going under, politicians will propose additional public subsidies to keep them afloat. 

As The Economist noted a year ago, that’s exactly what state and federal governments have been doing for public transportation systems. And here in New Hampshire, local and federal taxpayers have been bailing out the MTA for years now too. 

It’s notable that the federal government’s proposal, backed by New Hampshire’s congressional delegation, is not to offer consumers different services. It is simply to spend more money on the services consumers have already rejected.

This is a big reason why public transportation will always be at a disadvantage compared to the growing options out of the private market. According to the Foundation for Economic Education and a report from TransitCenter back in 2019, more people were leaving public transit behind and becoming full-time drivers. As access to private cars was beating out public transit in most U.S. cities, alternative private services like Lyft and Uber were also gaining popularity at the same time. And this was all happening before the pandemic, which only accelerated these trends from 2020 to today.

Given these underlying circumstances, nearly $20 million from the federal government won’t fix the MTA’s hemorrhaging of passengers. What it will do, though, through updates and expansions, is cost taxpayers even more, inflating the MTA’s already exorbitant cost per rider and putting upward pressure on the city budget. 



Speaking at an event in Portsmouth this month, economist Ali Wolf dropped a stunning statistic. Rents in the United States have risen by an average of 25% since the pandemic—but in New Hampshire they’ve risen by 45%.

Consider the news a follow-up to last July’s revelation that New Hampshire rents rose at double the rate of the prior year, even as rents fell nationwide.

New Hampshire, which is exceptionally hostile to new housing construction, is experiencing exceptionally high rent and home price growth. Go figure!

So, we’re fixing this problem by approving more and more residential units each year, right?

Right?

Well, according to U.S. Census data, the number of new building permits issued in New Hampshire in 2023 was below the number issued in 2022. And that number was down from 2021.

With demand for housing surging, the rate of new construction is slowing. 

This is not good. And it’s hurting the state’s economy and overall quality of life. But too many people can’t see this because the commercial side of the economy looks so healthy.

Last year, New Hampshire passed 100,000 corporate and LLC annual reports filed, setting a new record. And new business applications were up 10% in December of 2023 vs. December of 2022, according to the Small Business Administration.

New business creations are growing, which is a sign of a strong economy. But when only one side of the economy is healthy, it’s at risk from the unhealthy side.

In New Hampshire, there’s a disconnect between the way people think about business growth and the way they think about population growth. Some people (and many town officials) want one, but not the other.

To illustrate the point, consider small businesses that are very popular right now, such as coffee shops, craft breweries and neighborhood pubs. People love them because they create a sense of community. They’re a “third place,” a spot between work and home where people can socialize.

Coffee shops are more than just fun, though. They’re famous for being incubators of economic activity and hubs of information sharing. The London Stock Exchange was created in Jonathan’s Coffee House, located in Exchange Alley in the old City of London. The New York Stock Exchange also first met in Totine Coffee House on Wall Street.

People love coffee shops, which is why local governments are happy to approve new ones. Who protests the permitting of a new coffee house?

When towns approve coffee shops, they do a lot more than give people a cozy place to hang out. They might also be creating other new businesses.

A study published this week by the Bureau of Economic Research has found that the addition of a single Starbucks in a neighborhood can increase business startups. 

The researchers found that “compared to census tracts that were scheduled to receive a Starbucks but did not do so, tracts that received a Starbucks saw an increase in the number of startups of 5.0% to 11.8% (or 1.1 to 3.5 firms) per year, over the subsequent 7 years.”

Similarly, researchers studying the effects of pubs on social capital in Ireland found that local, rural pubs were important sources of economic activity as well as community cohesion. 

“Third places” like pubs and coffee shops facilitate both economic growth and social capital. People get excited when a new bar, restaurant or coffee shop opens in town because these businesses offer additional social opportunities.

But what happens when local governments approve lots of new bars, restaurants, coffee shops and other businesses, yet deny new housing?

What happens is you get more businesses competing for the same number of customers and employees. That’s what’s happening in New Hampshire.

In the Granite State, it’s much easier to start a business than it is to build a residence. So a lot of economic investment has been shifted away from residential construction and toward commercial and industrial development. As a result, we have a lot of businesses competing for too few employees. That’s created a labor shortage (or at least worsened a broader national labor shortage).

Governments in New Hampshire are approving new businesses, but restricting the supply of both customers and employees, which makes it hard for some of the new businesses to survive. It’s as if local planners are trying to build Hallmark movie sets–beautifully designed spaces that aren’t spoiled by the presence of regular people.

Desperate for workers, employers such as Valley Regional Hospital, the City of Lebanon and Service Credit Union are building housing for their own employees. But most small businesses can’t do that. Unable to find employees, or enough customers, they close. We’ve seen this happen with numerous bars, coffee shops and restaurants in places like downtown Manchester and Portsmouth in the last few years.

The residential shortage is already slowing the state’s overall economic growth, as highlighted by these small business closures. This imbalance between commercial growth and residential growth cannot continue. At some point, the housing supply will have to increase dramatically, or overall economic growth will have to slow further, if not contract. 

In the last several decades, local governments have happily approved new commercial developments while restricting new residential developments, as if businesses (and the economy) could grow indefinitely without any increase in customers or employees. 

Most everyone agrees that building more businesses is good for the economy and the community. They create economic opportunities and improve the quality of life. It follows that building the customer and employee base for all those new businesses is also good. Approving new businesses while deliberately depriving them of employees and customers is not a strategy for long-term success. Communities are strengthened by coffee shops that are filled with people, not by pretty but empty ones.

With a growing housing shortage and skyrocketing home prices as a result, the issue of housing is top of mind for Granite Staters. A June UNH Survey Center poll found that Granite Staters overwhelmingly say housing is the most important problem facing the state.

Unsurprisingly, the issue was also a top priority for legislators in 2024. And although some of the more ambitious pro-housing proposals didn’t make it through both houses, the Legislature passed a handful of modest reforms to free up the housing stock in New Hampshire.

The following are the five bills that passed both the House and the Senate and either await Gov. Sununu’s signature or have already received it:

* House Bill 1065: “relative to fire sprinkler requirements in residential buildings.”

* House Bill 1202: “relative to the issuance of permits for the alteration of driveways exiting onto public ways and relative to the definition of disability or special needs under the child care scholarship program.”

* House Bill 1359: “relative to appeals of certain zoning decisions by abutters.”

* House Bill 1361 (signed into law): “relative to municipal land use regulation for manufactured housing and subdivisions.”

* House Bill 1400: “relative to residential parking spaces, landlord-tenant law, unauthorized occupant evictions, and zoning procedures concerning residential housing.”

HB 1065 adds an exception to the state fire code for certain multifamily buildings. Under current law, existing multifamily structures consisting of more than two dwelling units must have a fire suppression or sprinkler system installed on the property. HB 1065 exempts existing buildings of no more than four dwelling units from this requirement unless fire sprinklers already exist on the property or are required by a nonresidential occupancy.

HB 1065 also prevents local jurisdictions from imposing stricter rules and regulations than the state fire code relative to residential sprinkler systems.

Requiring three-family and four-family buildings to have fire suppression or sprinkler systems can disincentivize developers and property owners from converting two-family buildings to four-families because of the prohibitive costs of installing them.

HB 1202 streamlines local permitting of driveways. Under this bill, a municipality must issue a driveway permit for a proposed driveway on residential land, including for multifamily use, within 60 days of the property owner’s application, putting an end to drawn-out permitting processes and preventing municipalities from wasting property owners’ time with delays.

HB 1359 limits who exactly can appeal local land-use board decisions by adding to the definition of “abutter.” Vexatious appeals of local zoning boards’ land-use decisions hinder residential development. Under current law, “any person whose property is located in New Hampshire and adjoins or is directly across the street or stream from the land under consideration by the local land use board” can appeal the permitted use in question to the local zoning board.

Under HB 1359, an abutter is “any person whose property is located in New Hampshire and adjoins or is directly across the street or stream from the land under consideration by the local land use board. ‘Directly across the street or stream’ shall be determined by lines drawn perpendicular from all pairs of corner boundaries along the street or stream of the applicant to pairs of projected points on any property boundary across the street or stream that intersect these perpendicular lines. Any property that lies along the street or stream between each pair of projected points, or is within 50 feet of any projected point shall be considered an abutter.”

In other words, not just anyone can claim to be an abutter and therefore appeal their local zoning board’s land-use decisions. Someone must be close enough to the land under consideration, and therefore have a claim to be materially affected by the permitted use, to have a right to appeal.

HB 1400, focusing on parking space requirements and unauthorized occupancies, was one of the more high-profile housing bills of the year. Originally, the bill prevented municipalities from requiring more than one residential parking space per housing unit. Under the version passed by both chambers, the bill prevents municipalities from requiring more than 1.5 spaces per unit for studio and one-bedroom apartments under 1,000 square feet, as well as for multifamily structures of 10 units or more.

Local parking requirements are often burdensome for housing developers and owners of multifamily properties to overcome because of all the land that needs to be accounted for and set aside to accommodate them. While 1.5 is not as ambitious as one, and owners of multifamily structures consisting of two to nine units will still have to abide by the whims local governments requiring two or sometimes more parking spaces per unit, 1.5 at least gives owners and developers of large housing complexes the breathing room to build without worrying about overcoming overly stringent parking edicts.

HB 1400 also allows municipalities to grant community revitalization tax relief for properties that are converted from office, commercial or industrial use to residential. This would let municipalities temporarily freeze property taxes on a building that is converted to residential use, thereby encouraging owners to make those conversions.

Sometimes local boards recommend changes to land-use regulations that would facilitate more housing development, only to see those changes rejected by voters. HB 1400 offers a remedy for this too. It would allow non-charter towns, village districts and counties that have unincorporated land to ask voters for permission to let the local governing body approve zoning changes without submitting the proposed changes to voters. If approved by voters, the local governing body would be able to change zoning laws or maps by majority vote.

Finally, after an amendment added by the Senate, HB 1400 outlaws squatting in New Hampshire. A “squatter” is someone who lives on another person’s property without that owner’s permission and without any legal claim or title to that property.

With the following language, “No person or legal entity, that is not a tenant, subtenant, or implied tenant, as defined in RSA 540-A:1, II, shall occupy residential real estate without permission of the owner, landlord, or their agent,” claims of “squatter’s rights” will have no legal basis in the Granite State under HB 1400, restoring to property owners the right to control who occupies their private property.

HB 1361, which has already been signed into law, forbids municipalities from banning manufactured housing. Prefabricated homes that are transported to sites, manufactured housing is an easy, quick and often inexpensive way to put more people into homes. Under HB 1361, municipalities can still regulate manufactured housing but not to the extent that it is effectively banned.

Each of these five bills, through exemptions, increased freedom, and/or regulatory reform, enhances property rights, reduces barriers to development, and makes it easier for Granite Staters to build more housing.

“The Legislature did a number of small things to ease the housing shortage, all of which had to do with giving people a little bit more freedom to use their land,” Jason Sorens, senior research fellow at the American Institute for Economic Research, said. “The most impactful reform might be letting residential developers propose alternative parking plans if the minimum requirement can be met through transit, on-street parking, or other options. But the session was also a missed opportunity in that the Senate killed more significant parking reform and by-right ADUs. Next year, they will need to get back to work on the problem.”

Among the more ambitious pro-housing bills that didn’t make it to the governor’s desk were HB 1215, HB 1291 and HB 1399. These bills represented attempts to extend the amount of time new developments are protected from local regulatory changes, allow property owners to add an additional accessory dwelling unit by right, and limit municipal restrictions on homeowners in urban residential zones who want to convert a single-family home to a duplex.

While these more far-reaching reforms didn’t make it through the Legislature, those that did represent an important first step in expanding private property rights throughout New Hampshire and reducing regulatory roadblocks to housing development.

Granite Staters want more housing, and they want enough of it to drive prices down. Whether they want it faster than legislators and local regulators have been willing to provide it is a question that might be answered only by future elections.

Congratulations to the Boston Celtics, the 2024 NBA champions! Sixteen years to the date of their last championship, the Celtics became the winningest basketball franchise in history. Now the players can spend the offseason celebrating—and paying their taxes.

Aside from the players and Celtics staff, probably no one is celebrating the title more than the Massachusetts state government, which is taking a large cut of the players’ bonuses.

Having won the franchise’s record-breaking 18th championship, each Celtics player will earn a reported $804,000 in bonuses. Fourteen Celtics players already earned more than $1 million in salary this year. With the bonus, at least two others will break the $1 million threshold and therefore be subject to Massachusetts’ new millionaires tax.

Massachusetts’ income tax is a flat 5%. But for annual incomes of $1 million or more, the state takes an additional 4%. The $804,000 championship bonus, like the salary of any player earning at least $1 million, will be subject to this 9% income tax rate rather than the 5% rate that applies to everyone with incomes of less than $1 million.

At a total tax hit of 9%, the 16 Celtics players earning at least $1 million this past season will have to forfeit $72,360 each to the Commonwealth in taxes on their bonus alone.

Without the 4% millionaires tax, each Celtics player would pay the regular state income tax rate of 5% on his championship bonus, or $40,200.

The millionaires tax thus confiscates an additional $32,160 from each qualifying player’s bonus. At 16 qualifying players, that comes to a $514,560 bonus for the state.

The difference is that the players earned their bonuses.

You might think that millionaire NBA players aren’t sympathetic figures, so who cares? But their case illustrates how the millionaires tax works to confiscate earned wealth while offering no additional services to those whose wealth was taken.

Some Celtics players earn tens of millions of dollars a year, but most don’t. The lowest-paid players might enjoy an income of more than $1 million for just this year, or for a few years. They’ll have to continue making a living outside the NBA for many decades. Being able to invest an additional $32,160 this year could make a big difference in their lives.

The same considerations apply to regular Massachusetts residents who might experience one or two exceptionally good years financially. The state confiscates an additional 4% of their income too.

New Hampshire doesn’t have an NBA team, of course, so we can’t lure Celtics players away. They’ll pay Massachusetts taxes for the work they do in Boston, even if they live here. But most other Bay Staters, particularly entrepreneurs and investors, can relocate for work more easily than professional athletes can. And many already have, including Celtics co-owner Steve Pagliuca, who warned after he relocated to Florida (not because of the tax), that the high rate posed a threat to the state’s long-term economic health.

“If we become ‘Taxachusetts’ again…the main effect will be not about a basketball player, it will be about business formation,” Pagliuca told Boston Business Journal last year. “It’s going to make it tougher to attract businesses in Massachusetts.”

The Celtics players’ tax hit illustrates the tangible difference between living and working in a low-tax, low-spending state versus one with high taxes, a billion-dollar budget deficit and not much to show for it.

WBUR on Monday labeled the millionaires tax a success because its $1.8 million in new revenue was dedicated in part to education, transportation and “free public school meals for every child in the state.”

But simply generating more revenue for government to spend doesn’t equal success. The MBTA is a money pit, and providing school meals at no charge for middle- and upper-class families who can feed their own kids is a curious use of public tax dollars for a state with a poverty rate more than three percentage points higher than New Hampshire’s.

Massachusetts taxpayers don’t get a better return for all the state’s spending. They just get more spending and higher tax rates.

In terms of taxpayer return on investment (ROI), New Hampshire taxpayers are the champions. Granite Staters receive the biggest bang for their buck, finishing first in WalletHub’s 2024 ROI rankings. And the dichotomy with our neighbor to the south couldn’t be clearer. Massachusetts came in at a distant 41st in taxpayer ROI.

Too often, people assume that high taxes equal high state revenues and therefore better public services. But higher spending doesn’t equal better services. As New Hampshire’s example shows, constraints on spending force policymakers to spend more frugally, which keeps the tax burden low and government more efficient.

Though the millionaires tax has brought in additional revenue for Massachusetts, it has not caused wiser or more careful spending. Just the opposite is true. And the long-term economic impact remains unseen. Given the well-reported exodus of wealthy taxpayers, Pagliuca’s warning still holds.

Unlike NBA players, higher-income Americans can live and work just about anywhere thanks in part to remote work options. Yet even NBA players can be motivated by lower state tax rates. Former Celtics star Grant Williams said last year that he accepted a trade to Dallas partly because of the Massachusetts millionaires tax.

If the tax can drive NBA players out of state, imagine its effect on people who aspire to become millionaires and who have the ability to live and work anywhere they want, not just in a city with an NBA team.

As Celtics fans celebrate the team’s 18th championship, the Commonwealth of Massachusetts is celebrating an additional half-million dollars in revenue. But that revenue comes from punishing most of the players by confiscating an additional 4% of their winnings. A state that treats its own sports heroes that way signals that it’s not a welcoming place for anyone who aspires to create wealth.

Bay Staters have already gotten that message. Massachusetts is among 24 states that experienced a net loss of income tax filers from 2020–2021. It ranked 45th in net migration, while New Hampshire ranked 11th.

The millionaires tax might be generating a lot of revenue now. But Celtics fans should hope that more players don’t get wise to the tax implications that come from working in Boston versus Dallas or Miami.

Kay is a 63-year-old single mom in Manchester who would love to be able to retire in the next five years. But as things stand, she doesn’t think she’ll be able to. Her adopted son needs the kind of high school environment they haven’t found among area public schools. And she needs to find the funds to pay for what he needs.

Kay and her late husband adopted their son from Kay’s husband’s niece. The niece, who struggled with addiction, had three children adopted out. Two were adopted through child protective services and eventually wound up with a grandparent, Kay said. Kay and her husband adopted their son directly, so there were no financial stipends.

In 2019, Kay’s husband died unexpectedly, and she decided to move back East from the Southwest to be closer to family for support, she said. Kay, her son, and two daughters call Manchester home.

Under the income cap legislators set for the Education Freedom Account (EFA) program, Kay’s single-mom family is classified as a “family of four,” which is presumed to have two parents and two children. That classification has put her son’s educational needs just out of reach.

Kay is a sales professional with a good job. But sales work is not always steady work in a changing economy. After she was recruited to work for a New Hampshire company, things seemed to be settling down for the family, but six months after the relocation, and two weeks before Christmas, Kay was laid off, she said.
She joined a new company in April 2023, and three months later, due to market conditions and a company restructuring, she was again laid off.

For a single mom raising a teenage son and two older daughters that she’s put through college, the money, even when it’s steady, goes fast. Even today, she’s still catching up on finances from the layoffs, she said.

State law caps Education Freedom Account eligibility at 350% of the federal poverty level. For a family of four, that’s $109,200. Kay’s salary from her new job puts her $90 over the cap, she said.

On the state’s spreadsheet, Kay’s family of four looks like a family with two working adults and two children. The spreadsheet doesn’t know the difference between that typical family and a single mom with three children.

When Kay decided to move to Manchester for its perfect location between her work and the customers she serves in Boston, she didn’t realize the challenges in the local public schools, she said. Having lived in the Southwest for years, the cost of many local private schools was another surprise.

Unable to afford a private school for her son, Kay enrolled him in a public charter school in Manchester for 7th and 8th grade. But, given her son’s unique needs and background, she’s seeking a new environment with more resources that could be dedicated to him, she said.

“He has suffered a lot of loss, has ADHD, is in counseling and needs a positive environment with resources,” she said. “He’s a wonderful kid, but needs good examples in other students, leaders, academic support, and a school with athletics and activities.”

The charter school has done the best it can with the resources it has, and there are great people working there, Kay said, but it just isn’t the right place for her son.

In search of a different setting for her son for high school, a Catholic school in Manchester came highly recommended. On a tour, they met with several teachers, administrators, coaches, and even students.

“When we toured, he got in the car and said, ‘Mom, this is my school…everyone is so nice,’” Kay said.

Her son is very excited for robotics and sports. He’s motivated by the support he’d get to excel, she said. The school has academic coaches who will help him with studying, focus and time management, which Kay said was critical for him. The school has a guidance counselor who told her son, “I will be here for your four-year journey to set you up for success in college,” Kay said. She also thinks that the spiritual focus will be a positive influence given the things he is exposed to in a big city.

When she learned about the Education Freedom Account program, Kay thought it would be the answer to her son’s educational needs. But the income cap has kept them locked out. It sees her family as a two-parent, two-child family, not a single mom with three dependents who works in an industry where layoffs are a common risk.

“I get emotional about this because it upsets me that only your W2, not life circumstances, are taken into account when applying for financial aid with schools or education funds,” she said.

When one of her daughters is no longer a qualified dependent, Kay could apply for an EFA as a family of three. But she would again be over the 350% cap, which is currently $90,370 for a family of three.

With an income cap of 425% of the federal poverty level, though, Kay’s family would qualify both as a family of four (a $132,600 cap) and as a family of three (a $109,735 cap). The 425% cap is the limit set in the conference committee version of House Bill 1665.

Without a higher income cap for the EFA program, Kay said she’d take a second job to make the tuition work if she had to. Her daughter is prepared to switch to part-time at New Hampshire Technical Institute to cut the family’s costs, she said. They’d try to make things work, but it wouldn’t be easy.

She would sell her home and downsize, but high interest rates and lack of available homes on the market make that an unrealistic option.

For Kay’s family, the EFA income cap is keeping a perfect educational option just out of reach. A cap designed for traditional families has put a single mom in the position of getting a second job to pay for the education that’s right for her son.

In trying to limit EFA access to families in need, legislators have left out families in need who don’t fit the preconception of what a “family of four” or “family of three” looks like.

As other families will be doing this week, Kay said she and her son will be watching the EFA vote on Thursday with hope. If the income cap isn’t raised, she said she’ll become an activist to push for universal eligibility next year. The difference an EFA could make for families like hers is too important for her not to get involved, she said.