Energy and housing’s self-inflicted wounds

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New Hampshire Public Radio reported this week on a study showing that rural New Englanders pay a higher percentage of their income on energy. This isn’t really new information. But it was a slow news week and the report’s recommended solutions seemed written to get NPR listeners to spill their morning coffees from their pledge drive mugs from all the vigorous head nodding.

The study concluded that Americans on average spend 3.3 percent of their income on energy, but for rural households the burden rises to 4.4 percent. In New England, rural households spend 5.1 percent.

The proposed solution? Energy efficiency projects. It’s probably a total coincidence that the report was released by a group called the American Council for an Energy Efficient Economy.

It’s true that making homes more energy efficient reduces energy use, thus reducing bills. ISO New England, the non-profit that runs New England’s energy grid, noted in this year’s Operational Fuel-Security Analysis that New England states have collectively spent more than $1 billion to improve energy efficiency, slightly tapering energy demand.

Since 2005, electricity demand in New England has fallen from a combination of the recession, milder weather, increased adoption of small-scale solar power, and energy efficiency investments, according to ISO New England.

Yet energy remains extremely expensive and the region remains at risk of rolling blackouts during periods of peak demand. Another billion dollars on energy efficiency could help shrink demand a little more, but it’s not going to solve the cost and supply problems.

To ensure enough capacity for peak demand times and to bring down prices for everyone — from low-income rural households to major manufacturers — we need more infrastructure and fewer rate-raising regulations like subsidies for politically favored power producers.

ISO New England projects a 4,600 megawatt reduction in power generation capacity by June of 2021. But states and communities are rejecting the construction the new infrastructure needed to replace those megawatts.

ISO New England figures show that in 2000, coal and oil generated 40% of New England’s electricity, and natural gas just 15%. By 2015, natural gas generated 49% and oil and coal just 3%.

Fracking fueled this change. Since 2009, natural gas has become much cheaper than coal and oil (and it produces fewer emissions). But we can’t tap it from maple trees (unfortunately, because flaming maples would be pretty great on Halloween).

We need pipelines to bring natural gas here. Without more pipelines, we’ll continue seeing high prices and more ships from Russia and other energy exporting countries docking in Boston.

In recent years, pipeline projects have been rejected throughout New England with such animosity that you’d think they were importing emerald ash borers or New York Yankees players. For proposing to bring enough fuel to ensure that Red Sox Nation survives winter, they’ve been run out of town. That’ll show ‘em.

We’ve artificially restricted our energy supply and raised rates by blocking construction and heavily regulating the sector. This has hurt rural and low-income residents.

And by the way, our housing policies have done the same thing.

Rural residents tend to live in older homes, and older homes are less energy efficient. The subsidized winterizing of old homes is always the recommended approach, but it is not going to address the underlying problem, which —like energy generation — is one of artificially restricted supply.

Home construction costs are at record highs because of rising labor costs, land costs, lumber costs, credit costs, and regulations. Every one of these costs is being driven higher by government policies — from immigration to tariffs to zoning to building codes to financial regulations. Regulatory costs account for 24 percent of the price of a new home, according to a National Association of Home Builders study.

If we scaled back housing, labor, land use, trade, and energy regulations, we would see energy and home construction prices rise less quickly or even fall. People of all income levels could better afford to buy, heat, and live in new homes.

But untangling those regulatory webs is difficult. It’s simpler to ask legislators to meddle in the markets by passing laws to shield lower-income residents from the consequences of the legislators’ past meddling.

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Gangster Tactics

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If you live in New Hampshire and enjoy wine, there’s something you should know (besides how approach a tasting). Your own state government, which sells wine, wants to be your primary supplier. Really, it wants to be your only supplier, but the Legislature won’t allow that. So to satisfy its impulse to smash all enemies, it’s rigging the wine market to kneecap upstart competitors.

The New Hampshire Liquor Commission both sells — and regulates the sale of — alcohol. This blatant conflict of interest gives it the power and incentive to limit its competition. Naturally, it uses that power.

After Prohibition, the Liquor Commission was the state’s only alcohol retailer. In the decades that followed, it aggressively fought the private-sector sale of beer and wine, changes that were proposed and ultimately ordered by legislators, who have grocers and drinkers as constituents.

Today, the commission is fighting a new competitor — direct wine retailers. The Liquor Commission is this week acknowledged that it has been systematically banning the direct-to-consumer sale of wines that are also sold in state liquor outlets.

The National Association of Wine Retailers this week called the commission’s actions “gangster tactics.”

During Prohibition, gangsters controlled the production and distribution of alcohol and snuffed out competitors. Ironically, the Liquor Commission, which was created to control alcohol distribution after Prohibition ended, wound up operating like a more lawful version of La Cosa Nostra. It pursues competitors relentlessly and does what it can to eliminate, or at least handicap, them.

Using the word “gangster” to describe the behavior of New Hampshire officials might call to mind images from a Weird Al parody. But where the power to whack competitors exists, it’s used.

Occupational licensing laws often grant specific industries the power to restrict competition. Licensing boards, made up of practitioners of a particular trade, are empowered to both practice and regulate that trade. Not surprisingly, they tirelessly suppress competition and seek legislative authority to further restrict entry into their field.

Public schools succeeded sank an Education Savings Account bill that would have expanded the definition of what constitutes a public education. It would have allowed families to spend the state portion of their public education dollars at non-public schools (local dollars would remain with the local public school district).

Perceiving this as a competitive threat, public school administrators, some local school boards, the teachers’ unions, and their political allies fought hard to maintain their advantage. They successfully turned enough Republicans against the bill to kill it in the House.

Even preppy suburbanites do it. Municipal officials and voters regularly approve ordinances to limit new business and home construction, reducing competition and raising prices.

It’s not that institutions granted such power attract people with a lust for blood and conquest. It’s that the combination of incentives and opportunity leads inevitably to anticompetitive behaviors.

So if you wondered why you could no longer order your favorite wine online, wonder no more. The Liquor Commission’s been taking a lead pipe to the knees of your favorite winery.

This was originally published in our weekly email newsletter, for which you can sign up here.

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On housing and energy, putting consumers first

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Housing and utilities comprise the largest portion of household budgets. In only nine other states and the District of Columbia do residents spend more on those two items than Granite Staters do, per Bureau of Economic Analysis data. Yet legislators have not been keen to reduce those costs for the people who elect them.

On the contrary, they often prefer to pass laws that make those items more expensive.

So the release this week of a new 10-Year State Energy Strategy that set cost efficiency as its primary goal was a big deal. The previous strategy, set in 2014, focused on manipulating energy markets to favor expensive and inefficient priorities such as renewable energy, with little attention given to the cost that would fall to consumers.

To understand the magnitude of the shift, imagine a hippie folk rock act ditching the acoustic guitars, cutting their hair and putting out an R&B album — a good R&B album.

“Addressing energy costs is a critical goal for New Hampshire. Expensive energy – or pursuing policies that raise the cost of energy – directly and negatively impacts New Hampshire families and businesses and the quality of life in our state,” the new energy plan states. “As such, the priority of this Strategy is to organize goals around cost-effective energy policies.”

The plan does not oppose all subsidies for renewable energy initiatives. It does advocate limiting any such subsidies to the start-up period to prevent ongoing cost-shifting.

This consumer-focused approach to energy policy is at odds with several bills in the Legislature this session to continue or expand subsidies of inefficient biomass power plants. Senate Bill 446 would further subsidize biomass facilities and solar arrays. Senate Bill 365 would further subsidize biomass facilities. Senate Bill 577 would further subsidize biomass facilities.

The permanent ratcheting up of electricity rates by compelling ratepayers to subsidize politically favored businesses is a long-standing New Hampshire practice. The new energy strategy discourages this. Its focus on lowering rates has drawn praise from the state’s ratepayer advocate. Whether legislators will respond by reconsidering their support for higher rates is the question.

Local housing regulations vs. consumers

As with energy, housing costs are rising when they could be stabilizing. There is huge demand for new housing in New Hampshire, and builders are eager to fill it. The problem is that local regulations make it extremely difficult to build new homes or apartments to respond quickly to surges in demand.

Those regulations also add costs that make it hard, if not impossible, in many communities to build residences that lower-income families can afford.

New Hampshire’s average monthly rental rates are higher than Maine’s, Vermont’s and Rhode Island’s and are comparable to Connecticut’s. Average rental rates in Connecticut are only $68 higher than in New Hampshire for a one bedroom and $63 higher for a two-bedroom. Median rents in Manchester are higher than in many larger cities such as Philadelphia, Atlanta and Orlando.

With a booming economy, thousands more jobs than we can fill, and a statewide rental vacancy rate below 5 percent for 18 of the last 20 years and below 2 percent for the last years, the rate of home construction in the state should be rising aggressively. It is rising, but not at rates that would come close to filling demand. Local housing restrictions are in the way.

A fix to help builders navigate these restrictions more quickly and less expensively is offered in Senate Bill 557. It would create a housing appeals board to which developers could appeal decisions of local boards, committees and commissions. Now, appeals go to the superior court. It often takes years for an appeal of a local housing decision to reach a resolution in court.

The housing appeals board would take these appeals out of the court system and resolve them quickly. The board would be required to hold a hearing within 90 days of receiving an appeal and make a decision within 60 days of the hearing. This would dramatically speed the appeals process while eliminating expensive legal costs for both builders and municipalities (taxpayers).

At a hearing in the House Finance Committee this week, no one spoke against the bill and the New Hampshire Municipal Association did not oppose it. Nonetheless, the committee voted to refer it to interim study. It will come before the full House on Thursday.

If legislators followed the lead of the Office of Strategic Initiatives and made reducing costs a top priority in both of these areas, the impact on Granite Staters could be dramatic. Making the state a lower-cost place to live and work would bring economic benefits far exceeding any that could come from propping up obsolete power plants or ignoring the costs of local land use regulations.

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You Need Some Christmas Book Advice

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Charlie Arlinghaus

December 18, 2014

As originally published in the New Hampshire Union Leader

You’re reading the wrong books. Actually, maybe you’re okay but your friends or your kids need some help. Have no fear, I break from policy today to offer you some Advent reading advice in the final eight days before Christmas.

To begin with, I will presume that too many people who actually stop at this page and read this column are at least a trifle obsessed with politics and that whole bizarre universe. Please stop. Give no books by an “author” who has a radio talk show or is an elected official. Instead read history and economics with a healthy dose of a fiction mixed in.

I have greatly enjoyed Anne Applebaum’s Iron Curtain about the slow crushing of Eastern Europe after the war. It is an intimate, balanced, and remarkable explanation of how a society can be systematically transformed in the traumatic aftermath of the war and then slowly crushed. The minutiae and psychology of how that transformation is possible is fascinating.

Some of the best economics is historical, makes no assumptions about our own knowledge of jargon, and doesn’t use language designed to exclude us. Almost every year, I give at least one person Niall Ferguson’s brilliant The Ascent of Money. Ferguson is an engaging writer and has presented the book as a six part television series. There are wonderful explanation of the historical origins and development of major economic concepts like money, insurance, stock, bonds, banking, and home ownership. A brilliant book that is eminently readable ought to be the starting point for anyone seeking to understand the financial world at all.

At the end of the day, I think we all read too much non-fiction. There is some bias that tells us the thicker and more boring a book is, the more noble and valuable it must be. Hogwash. This sort of drivel makes both books and people more boring.

Good fiction includes books that tell a truth more clearly and compellingly than any non-fiction ever could. But good fiction can also be escapist, entertaining, or mind clearing. Read for enjoyment and you will enjoy reading.

The best writer of English prose of the 20th Century is P.G. Wodehouse. If you disagree you have simply never read him. His are the most amusing and charming books ever written and find their perfection with the stories about Jeeves and Bertie Wooster. The best introduction is Carry On, Jeeves, the stories that introduce Jeeves to Bertie and us to the characters and their world. Start there and you’ll never stop.

Wodehouse’s writing is brilliant in the best way. You don’t sit back and admire it. Rather, it takes you in and envelops you without you noticing. Stephen Fry, a famous admirer, said “you just bask in its warmth and splendor.” Indeed you do and reading Wodehouse is an act in and of itself that makes life worth living. Read it and you will experience the healing power of the best fiction.

I have fourteen more suggestions but lacking in space we must move on to children. If there are children for whom you might buy a present, you wrong them if you don’t get them books. Reading can be cultivated at an early age and nothing is more valuable. To read is to explore the world we could never see, we meet people on a page we might never encounter in person, and gain experiences beyond our normal capacity.

Please branch out from movie and TV characters. Let their imaginations run rampant rather than skim movie plots. Start with Emil and the Detectives by Erich Kastner. Set and written in pre-war Germany, Emil is a 12 year old who has all his money stolen on the train and works to get it back with the help of a dozen new friends.

Substitute pigs and farms for Germany and kids and you have Walter Brooks’ Freddy the Detective about a porcine Sherlock Holmes. This too dates from the 1920s. Freddy learned to be a detective from reading Sherlock Holmes, as one might expect from a pig in upstate New York.

I reread both of these in the last two years and found them as pleasant now as I did when I was eleven. The same holds true, by the way, for Wind in the Willows or The Phantom Tollbooth. Classics don’t diminish as one ages.

I need to stop writing and you need to go buy some books.

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Don’t do Something, Just Get Out of The Way

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October 22, 2014

As originally published in the New Hampshire Union Leader

To help create jobs, politicians regular have to decide whether to do something or get out of the way. New Hampshire can do more by doing less and try to stay out of the way of people who know what they’re doing. We can’t compete with big states in an expensive and unfair bidding war to lure jobs to the state. Our best strategy is to create a climate in which job creators can flourish and avoid the managers looking for handouts and subsidies.

Regularly we read about some large auto company or other concern who gets states to bid millions of dollars in handouts of money and soon-to-be “forgiven” loans – money those politicians take from other taxpayers in their state in the hope of landing some high profile press release factory.

New Hampshire’s history is to avoid such politically driven games. We don’t enter bidding wars with money taken from other taxpayers to transfer to a chosen few.

The state’s long standing philosophy was summed up quite well by one of the government’s most senior economic development professionals. Michael Bergeron of the state’s Division of Economic Development talked to Sarah Palermo of the Concord Monitor about jobs that moved from Concord to Connecticut.

Connecticut had offered a million dollars of “loan forgiveness” (which sounds better than a cash handout which is what it really is) and New Hampshire had no similar program of cash handouts.

Bergeron said “a lot of companies will shop around to find the best deal. Some states will give away the bank. The law of physics says the money comes from somewhere, and it’s the taxpayers.”

This lesson is often forgotten when people think “the government should do more.” Any subsidies that we hand out to lure businesses to the state are paid for with dollars taken from other businesses – businesses already here and creating jobs, employment, revenue, and economic activity. In essence we would be taxing existing business to transfer their money to the relocating business. We would penalize a company for being here already and being a good corporate citizen.

Bergeron went on to summarize our less controlling philosophy: “instead of taking money away from you and giving some of it back some of the time, why don’t you keep it and use it as you see fit for your company.”

Without question, New Hampshire’s strategy makes us unable to compete for those companies that demand handouts before they ever expand. Yet, no one business development plan will attract 100% of all companies. We choose not to try and pursue those companies who demand greater and more expensive handouts. That allows us, however, to compete for those companies that have a philosophy more suited to our own.

Many companies are not interested in the gamesmanship of new programs. Instead they want a climate like the one Bergeron describes. They want a stable climate where government is not constantly picking winners and losers. They don’t want to compete to be this year’s favorite of the current crop of government planners. Instead they want to run a business in the way think makes most sense, the way that provides the greatest number of jobs and return on investment.

In Bergeron’s terms, they aren’t seeking to pay into a kitty and try and get the government to pick them as this week’s winner. They want to keep the money and use it as they see fit for their companies.

This is New Hampshire’s traditional philosophy. We compete on climate not unusual events.

Unfortunately, our climate needs some work. Our business taxes are the highest in the country. In an historical oddity that would have seemed impossible years ago, our Business Profits Tax is higher than even Massachusetts. That and a series of smaller taxes must become more competitive.

If we aren’t competing through government handouts – and we shouldn’t be – we have to do everything we can to create a very competitive environment not just kind of competitive.

Activist politicians often speak of “investing” in this program or that. But lowering our highest in the region tax rates is a better investment. We don’t rely on hoping that government planners have managed to see the right trends. We get out of the way and let entrepreneurs risk their own capital to fail and succeed.

Our government’s best action is to do less and get out of the way more.

 

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There are Fewer Reporters Because Nobody Cares

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Charlie Arlinghaus

August 20, 2014

As originally published in the New Hampshire Union Leader

Though we all pretend to care about state and local affairs, few of us actually can be bothered to pay attention. A tiny sliver of the population votes, participates, or even seems to care. Despite that epidemic of apathy, people can always be counted on to be annoyed by changes they themselves helped cause. Changes to journalism are one example of this trend.

There has been a great deal of angst lately as the Nashua Telegraph closed their State House bureau and released veteran reporter Kevin Landrigan. Following the retirement of longtime Associated Press reporter Norma Love, observers worried that no one in an increasingly lonely press room had any historical knowledge and that the public would be poorer because of it. The concern is real but exaggerated and sometimes expressed by people who helped cause it.

In a small press corps, losing two reporters who have witnessed so much definitely lessens the knowledge base but they weren’t the only veterans around. The Union Leader has a strong presence at the State House with Gary Rayno, a veteran of three decades and multiple newspapers, whose knowledge of the inner workings of the State House is equal to that of any current or former reporters.

Though a paper or two no longer has a full-time reporter, few of them will stop covering the State House. The Associated Press made a strong move by hiring the well regarded Kathleen Ronayne to replace Norma Love. In addition, the much lamented Mr. Landrigan didn’t miss a step as he was picked up immediately by a broadcast and internet concern.

Without question though, there is less coverage of everything local than there once was. A decade ago, the State House considered doubling the size of an overcrowded press room. More recently, they removed unused desks from a less utilized room. There are fewer newspaper reporters. That fact is often lamented by people who can’t be bothered to subscribe to newspapers themselves. It is a little disingenuous to complain about coverage while refusing to help pay the salaries of the reporters who provide said coverage.

The decline is not limited to print. Veteran radio man Ken Cail told me that when he first came to New Hampshire radio in the 1970s, a large Manchester station had a six person news room. Into the 1980s and 1990s multiple radio stations had news staffs of various sizes. Today, I’m not aware of any commercial station with dedicated news staff. Dedicated reporters exist at New Hampshire Public Radio but not elsewhere on the radio dial.

We all know some blowhard or another who insists to us that he only gets his news “from twitter and the internet.” Somehow, a friend of yours making a smart aleck comment in the 15 words twitter allows counts as news. A Facebook link to a newspaper story or a blog which recasts information gathered by a reporter grants the feeble minded the illusion that somehow the nebulous monolith of the internet created news from ether.

The truth is that fewer people care anymore. Things like the internet have disassociated us from each other. We are less likely to know our neighbors, participate in anything like a community, or have a social network that includes living beings. A sociological analysis our growing independence from human contact was called “Bowling Alone.” Bridge clubs, bowling leagues, discussion groups, church suppers and the like decline in favor of social media memes and something called “tweet-ups.”

The result in a civic sense is that we don’t care. New Hampshire’s noble and Norman Rockwellish institution of town meeting is a museum piece rolled out for people from away to see. The truth is that 90% of the people aren’t there. Controversies increase turnout but otherwise most of us stay home. Local elections are not much better. State primary elections next month will see between 10 and 15% of the population of the state actually cast a ballot. For the vast overwhelming majority, elections and public policy are just a nuisance or a slightly annoying background noise.

Most of us are less engaged in our geographic community or other communities of interest. As our civic engagement declines so too does our interest in local affairs. A decline in local news coverage – or at least our interest in it – is a reflection of that decline not a cause of it.

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New Hampshire’s gloomy August jobs report

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Josh Elliott-Traficante

September, 2013

While the unemployment rate in New Hampshire dropped to 5.0% in August, the decline was not caused by an increase in employment, but by a decrease in the size of the workforce. According to the Household Survey, the number of employed residents dropped by 120, the number of unemployed residents dropped by 650, while the labor force as a whole shrank by 770.

The August data continues a trend, seen in the New Hampshire labor market over the last few months, of declining unemployment coupled with a shrinking labor force. This is not unique to the state however; this trend is seen in the national data as well.

This means that discouraged workers are still dropping out of the labor force largely accounting for recent “improvements” in the unemployment rate.

Turning to the Establishment Survey Data, the state had a net loss of 1,000 jobs. The total number of private sector jobs declined by 3,200 and the public sector grew by 2,200.  Areas seeing the biggest losses were Construction (-500), Professional and Business Services (-1,100) and Leisure and Hospitality (-1,100). Sectors seeing the most growth were Local Government (+2,400) and Wholesale Trade (+300).

The Manchester area saw no change in employment in the month of August, while Nashua added 700 jobs, Rochester-Dover: 200 and Portsmouth lost 700.

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A Sensible, Faithful Amendment

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 Charlie Arlinghaus

June 6, 2012

As originally published in the New Hampshire Union Leader

 

The debate over education funding in New Hampshire has always had an element of fear in it ever since the original Claremont rulings. Some fears are well founded, but many are exaggerations not necessarily based in fact or actual history. Fears of the constitutional amendment being considered today are no different. The actual amendment is a tempered response to Claremont that will allow sensible lawmaking and forestall nothing of importance.

While most conservatives support an amendment and have supported one for decades, the current version finds one subset of conservatives still skeptical. This group worries most of all about local control and posits the amendment as a state takeover of education, an elimination of local rights, and suggests instead the Legislature simply ignore the court decision.

The court’s original decision was certainly a contorted definition of the ambiguous phrase “cherish the interests of arts and sciences, and all seminaries and public schools.” Beginning with his “Letters to Educators,” my colleague Eugene Van Loan has continually demonstrated the over-reach of the court interpretation.

Ignoring the decision has been one option available to lawmakers, but not one with any hope of success. Each Legislature has a few dozen politicians willing to tell the court that it wrongly decided Claremont and they choose not to be bound by that decision. In the absence of that possibility, an amendment must be considered.

Critics are in fact correct that the current amendment does limit the Legislature’s options. In fact, the language of the amendment would not allow the Legislature to abandon the funding of education entirely. Today, state aid to education amounts to $1.03 billion over 10 different aid programs. The current amendment would not allow the Legislature to spend zero dollars. Then again, no one seriously proposes that the state do nothing (not that the fear of such an outcome isn’t regularly raised by the left) so that concession forestalls nothing in reality.

Some wrongly worry that the amendment would eliminate local control of education decisions. They worry the amendment will “centralize control” of education decisions, not just funding, and move authority from the towns to the state. In fact, the amendment clarifies that the state may in fact delegate authority it has and has always had down to the towns.

From the beginning, the state has controlled education. For our entire history, the state has mandated curricula and teaching credentials. The very first education laws of the state stipulated the credentials required to be allowed to teach, and they mandated curricula — one curriculum in most towns, a different curriculum in shire towns. In the first few years, curricula were loosened, credentials were tightened.

The misunderstanding stems from language in our constitution, borrowed like most of it from Massachusetts, that gives towns the “right of electing their own teachers.” The basis and understanding of that right is at the center of a group’s opposition to the amendment.

That right never allowed towns to elect absolutely anyone for any reason with any credential. From the beginning, the state specified minimum standards to be eligible to be selected and requirements for what that person could teach. To the modern mind, we might ask what good that right was if the state nonetheless dictated who might be eligible for election.

Remember that under the original constitution that right was for “Protestant Teachers of Morality and Piety.” The phrasing was not simply anti-Catholic bigotry. It reminds us that the line between teacher and minister was not so clear as we see it today. The former colonists did not want ministers or teachers imposed on them by an Anglican Bishop and instead wanted the right to elect a minister they chose — low church, not high church, Congregational not Anglican. They liberalized the laws so the town could choose and the teachers would not necessarily have to possess a credential from a bishop in England.

Regulation of teachers’ credentials was done by the state before, during and after the constitution. Curriculum requirements were established before, during and after the constitution. However, the good Congregationalists across New England made it clear that they wanted the right to pick the specific, qualified individual lest some community with dissenting sympathies have a Church of England teacher forced on them.

We should all work to oppose laws dictating every detail of education in local public schools. But the state has had that power for 230 years, and the fact that this amendment does not radically undo that original understanding of the state’s authority is no reason to avoid doing the sensible thing.

 

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Sununu’s Legacy of Liberty and Reform

By Charlie Arlinghaus

November 2011
As originally published in the New Hampshire Union Leader

In many ways, most of what those of us on the right are trying to achieve today is just recycling the efforts of John Sununu from thirty years ago. It is fitting that he is being honored next week as an example of the kind of public service that focuses not on winning the right office but on achieving the right policy.

Next week, my organization, the Josiah Bartlett Center, will honor former Governor Sununu with our Libertas Award. Named after the Roman goddess of freedom, Libertas is meant to serve as shorthand for a dedication to individual and economic freedom in preference to the heavy hand of the state. It is the word Jefferson used when he wrote to Madison that he preferred to the tumult of liberty to the quiet of servitude.

Those of us with a belief in economic freedom and limited government are honoring Governor Sununu not because of an election or a title but because of what he did with those titles and those offices. His experience is a model for those who would be governor and his actions a useful roadmap for the next few years.

Sununu came to New Hampshire not by accident but as an entrepreneur with a startup business. He reached the conclusion that so many entrepreneurs in the high tech field do: New Hampshire has a more favorable business climate than their home state. Sununu experienced first hand the economic advantages of New Hampshire and tried throughout his career to preserve them up to and including last year’s fight against the LLC tax that would have reversed the flow of jobs.

He took office in 1983 during a fiscal crisis remarkably similar to the one face today. He first balanced a budget that was in crisis. Stopping the bleeding was critical before moving to adopt pro-growth policies.

Once the bleeding was stopped, the budget balanced, and the deficit paid off, Sununu focused on adopting pro-growth policies to send a signal to job creators that the jobs they would create coming out of a recession should be in New Hampshire. He made significant cuts the Business Profits Tax, the clearest sign to businesses that we wanted them here. That focus on pro-growth tax cuts is echoed in the legislative debates about how to attract jobs coming out of the most recent recession.

During the boom that followed, Sununu focused on modernization and infrastructure. Rather than build up a bureaucracy, he focused any windfall from the business and population boom on rebuilding the state’s dilapidated infrastructure – one-time spending rather than an inexorable boom in the scope of government.

Three reforms stand out. Sununu brought the state into the modern world with computerized management and a landmark integrated financial system, all leading Time magazine to write a national story on how “a computer buff is transforming New Hampshire.”

Today, we regard the internet as a revolutionary tool for making government transparent, open, and accountable. The transparency movement seems to be a recent thing but Sununu was touting the details of government as a key to efficiency more than 20 years before we even conceived of the idea of an NH OpenGov website. He channeled all spending and revenue information into the state’s computer down to “the lowest source to get intimate, unbiased data.” The need for computerized information is the obvious forefather of our current work putting every transaction of state government in a public internet database.

The level of detail available made New Hampshire a leader in privatization before that concept was commonplace. Some government functions were done more efficiently on the outside so they were contracted out. For example, psychiatric services were performed not by state employees but by professionals from Dartmouth providing better service more efficiently.

One of the most lasting reforms was one we talk about today – the ten year highway plan. Bridges and highways don’t suddenly fail, they are or ought to be managed over time. Rather than manage the major infrastructure projects of the state on a piecemeal basis like many states did, Sununu issued an executive order requiring the state to adopt a ten year plan to systematically order this long-term spending.

Perhaps the best example of the Sununu focus on policy not just election is the state’s pension system. When he left office, the state’s retirement system was fully funded and had paid off previous liabilities. That’s not the case today.

Although focused last year on elections as party chairman, Governor Sununu and I talked regularly about the state’s current unfunded liabilities and finding the right solution to them. The pensions would never be an issue in the election but they impacted the long term health of the state and so he was focused out of the public eye on the right policy.

A good lesson for would be policymakers: often things that aren’t about getting elected are still the right thing to do.

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