How the state can help restaurants survive the shutdown

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In the month before Gov. Chris Sununu ordered New Hampshire restaurant dining rooms closed, employment at New Hampshire full-service restaurants dropped by more than 8 percent (2,000 people), state figures show. In the month since the governor’s March 16 order, restaurant business has plummeted. State employment data are not yet available for those weeks, but industry insiders expect them to show catastrophic losses. 

Some New Hampshire restaurants already have gone out of business. Restaurant owners interviewed by the Josiah Bartlett Center in the last two weeks say things are bad and getting worse. If restaurants cannot reopen for in-person service in May, several said, the state can expect to see a wave of small-business closures.

A National Restaurant Association survey of restaurant owners nationwide found that 11 percent said they expected to close permanently within the next 30 days. Another 3 percent of those surveyed reported that they already had gone out of business. 

Restaurant revenue nationally is down by 50 percent for the year, according to data compiled by small-business software firm Wombly. That figure includes restaurants that specialize in take-out service, so the decline for dine-in restaurants would be even worse.

Full-service restaurants typically have low profit margins and high monthly expenses, including rent, insurance, taxes, and debt service on equipment. Reduced to take-out service only, many won’t survive if they can’t close the gap between their expenses and revenues. 

Anticipating that dining rooms are likely to remain closed beyond May 4, the Josiah Bartlett Center for Public Policy has drafted a list of policy recommendations to help full-service restaurants narrow their losses, and possibly return to profitability, so they can survive until the economy reopens. 

It’s important to understand that while on-premises service is halted by order of the state, other state laws and regulations prohibit restaurants from pursuing some potentially lucrative alternative sources of revenue. By temporarily relaxing some of these restrictions, the governor might be able to save numerous restaurants from closure, return some employees to work and reduce the burden on state services.

The policy changes listed below would help restaurants either bring in additional revenue or push back some expenses until later in the year, when dining rooms are expected to reopen.   

  1. Allow restaurants to sell beer in growlers. State law does not allow restaurants and bars to sell draft beer in growlers (large bottles, typically 64 ounces, with screw-on caps). With dining rooms closed, restaurants are sitting on thousands of dollars worth of draft beer inventory that they are prohibited by law from selling. The state lets restaurants sell draft beer for consumption on-site only. Keg beer has a short shelf life, so without an order allowing it to be sold for off-site consumption, some restaurants will be forced to pour out inventory worth tens of thousands of dollars. This waste is entirely unnecessary. An emergency order could allow restaurants to sell draft beer in their own growlers or to fill customers’ growlers after washing them in commercial washing machines. The order could require growlers to be transported out of reach of a vehicle’s driver.    
  2. Allow restaurants to sell mixed drinks in closed containers. The state objection to the curbside sale of mixed drinks is that drivers could open and consume the drinks while in the vehicle. But state law already allows patrons to transport open wine bottles from restaurants, provided the bottle is stored in a car’s trunk or out of the driver’s reach. Allowing restaurants to sell mixed drinks in closed, sealed containers, with the same distance-from-driver requirement that applies to opened wine bottles, could offer a significant sales boost for some restaurants without endangering public safety. 
  3. Allow restaurants to sell bottled liquor and wine. The Liquor Commission has let restaurants to return unopened liquor and wine, but only for store credit. That doesn’t help restaurants that need cash. State law allows restaurants to sell only opened liquor and wine, on premises. Temporarily allowing restaurants to sell unopened liquor and wine for take out would allow them to increase cash flow while reducing inventory. Though they wouldn’t be able to compete on price with state liquor stores, they could do a decent business from patrons who don’t want to drive all the way to a liquor outlet or who just want to support local restaurants. 
  4. Allow outdoor, in-person dining, subject to social distancing and other health protocols. Grocery aisles remain clogged with customers, many not wearing masks or following recommended social distancing procedures. Meanwhile, restaurant decks and patios where better health protocols can be enforced go unused. The state could let restaurants reopen outdoor dining areas subject to additional regulations, such as requiring restaurants to space tables at least six feet apart, disinfect tables and seats after each use, have staff wear masks, use disposable menus, and limit the size of parties and the number of customers allowed on site. Some restaurant owners suggested that they could make things work temporarily if the state cut their authorized seating capacity in half and banned large gatherings in lobbies.  
  5. Let restaurants defer rooms and meals tax payments. If restaurants could postpone their rooms and meals tax payments for 90 days, they could save some cash to help get through the emergency shutdown. Payments would still be made, but after business has picked up and more cash is coming in. 
  6. Municipalities can also help by letting restaurants defer property tax payments. 
  7. Give restaurants the same liquor and wine discount that grocers get. State law (RSA 178:28) grants grocers a 20% discount on the wholesale price of liquor and wine purchased from state liquor warehouses, but restaurants a discount of only 10%. Granting restaurants the same discount that grocers get will shave some of their costs when dining rooms reopen.

Restaurants operate on famously thin margins. Many will not survive a prolonged shutdown if the state continues to enforce regulations that prevent them from adapting to the forced closure of their dining rooms. Our recommended changes offer responsible adjustments that could keep many small businesses alive without creating additional risks to public health. 

A downloadable version of this brief is available here: Bartlett Brief — Restaurant Help During Shutdown 

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Regulations keep food trucks from riding to the rescue

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By Andrew Cline

Ken Spilman usually spends early April preparing B’s Tacos for the season. This week, the food truck he’s owned for seven years sits idle as he waits out the coronavirus. 

“We’re hunkered down and we’re not going to get out there until the curve starts to go down,” he said.

He’s already lost lucrative event contracts, he told the Josiah Bartlett Center.

“The cancellations are right across the board. We’ve lost a significant amount. I have contracts that have now been either canceled completely or rescheduled. Two weddings that were planned, early summer weddings, and they’ve decided to wait a year.”

In the rapid economic contraction following massive business closures last month, local regulations prevent Spilman and other food truck owners from improvising new ways to find clients. 

“I can think of neighborhoods in Londonderry and Derry that if I announced I’m going to be at this location on Wednesday night for an hour, I’d do very well. It’d be a huge opportunity for us food trucks to go into certain neighborhoods. It’d be more local. I could serve my local community instead of going down to Massachusetts.”

But food trucks generally are not allowed in residential zones. 

“Licenses or site vending permits shall not be granted for vending within any residential district,” states Londonderry’s vendor ordinance. 

“You’d be surprised how many people have reached out to me and said, ‘why can’t you come to our neighborhood like an ice cream truck,’” Spilman said. “With social media today, you really could come to a neighborhood.”

Location restrictions keep food trucks out of large portions of commercial and industrial zones, too. Portsmouth restricts food trucks to private property and a public parking space downtown. Seven sidewalk spaces are reserved for food carts. The city bans food trucks from doing business on city streets, with the exception of exactly one downtown parking space this year. (The ordinance allows for three.) The parking space is auctioned to the highest bidder annually. By ordinance, the starting bid is $5,000. 

State law requires food vendors to get a state license ($50), which allows them to operate everywhere in the state. They remain subject to local regulations. Fifteen New Hampshire municipalities regulate where, when and how food trucks can do business. Food truck operators say the local regulations are highly restrictive and the fees expensive. 

This month, with Granite Staters ordered to stay home and non-essential businesses closed, ordinances prohibit food trucks from going where their customers are — homes, public parks and hospitals — and force them into deserted downtowns and big-box-store parking lots.

“They could be operating more freely,” Aaron Krycki, environmental health supervisor for the City of Manchester, said. 

“Rules aren’t designed to tell you what you can do,” Krycki said. “They’re designed to tell you what you can’t do.”

But for food trucks, local regulations are so broad that they often amount to a short list of places vendors may operate.

Manchester reserves Stanton Plaza on Elm Street, in front of the DoubleTree hotel, for food truck vendors. It lets truck owners bid on spaces at eight city parks. Vendors must get written permission to use any other public property — and most private property as well. 

The city’s regulations require vendors to obtain “written permission of the abutting landowner and/or tenant” to do business on private property, even their own.

In Manchester and many other municipalities, it is illegal to sell food from an on-street parking space even if your truck is fully licensed, inspected, fits in the space, and the meter is paid. 

Cities typically prohibit food trucks from doing business on public streets even if not obstructing traffic. Some, like Manchester and Keene, make exceptions for “frozen confections” vendors (ice cream trucks). 

There is not a single licensed mobile ice cream truck in Manchester, and there hasn’t been one in years, according to the city clerk’s office. So Manchester residents stuck at home during the state of emergency can’t even be cheered up by a visit from the ice cream man. 

Keene generally prohibits mobile food vendors from doing business on public property, including roads and parking spaces, with a few center city exceptions. 

“We do have some locations downtown on the sidewalk where we allow food carts to be. Five right now,” Assistant City Clerk Terri Hood said. “They go through clerk’s office to get permission to use the space. In addition to normal license, they have to have additional license agreement and small rental fee.” 

The fee is $250 for a one-year permit, she said. 

Ice cream trucks can roam most Keene neighborhoods (there’s a list of narrow streets they are not authorized to use). But food trucks cannot sell in any residential area unless invited to cater an event on private property.

Keene recently revised its parking ordinances so city officials could allow vending from parking spaces at their discretion. Vending is allowed in “parking spaces or parking lots as may be designated from time to time by the city….”

Among food vendors, Concord and Portsmouth have reputations for being prohibitively strict and expensive. 

“I won’t go to Concord because of how expensive it is,” Spilman, owner of B’s Tacos, said. 

Concord’s license costs $212. (Nashua charges $10 for a day, $25 for a week, or $100 for a year.) 

Concord prohibits food vendors everywhere except in the central business district “at locations approved by the Licensing Officer.” By ordinance, “approved locations are limited to Eagle Square and to four (4) within the public way.”

That’s it for the city. Even for authorized spaces, vendors must get “the written approval of the landowner and tenant in front of whose property and business the applicant intends to operate and the written permission of the majority of the two (2) adjacent businesses located on both sides of the proposed location.”

With so many restaurants downtown, that likely means getting the permission of a restaurant owner, which is highly unlikely. 

“In Concord, if you could set up in front of the State House, that would be great, but they’d never let you do that,” said Chris Kozlowski, the award-winning owner of Crescent City Kitchen, a mobile food trailer. 

Some cities make the restaurant protectionism even more explicit. Manchester bans food trucks from doing business within 50 feet of a restaurant that sells a similar product. A truck that sells hot dogs, for example, can’t operate on the street near a restaurant that also sells hot dogs.   

That provision is probably unconstitutional. In 1979, the Los Angeles Superior Court in People v. Ala Carte Catering Co. struck down just such a regulation as unconstitutional, calling it a “rather naked restraint of trade.”

In 2011, the Institute for Justice, a public-interest law firm, sued El Paso, Texas, over its ordinance prohibiting food trucks from operating within 1,000 feet of any restaurant, grocer or convenience store. Rather than face a trial, the city repealed the rule, acknowledging that it served no public health purpose. 

The Los Angeles case helped food trucks to flourish there. The city is considered by many foodies to be the birthplace of gourmet food trucks. Its regulations are cited as a model for other municipalities because they are focused on health and safety and largely avoid anti-competitive restrictions.  

Remarkably, New Hampshire municipalities have food truck regulations that can be more burdensome than those in New York City or L.A. Even when one city’s regulations are relatively easy to meet, the costs of complying with different rules in multiple places adds up.

“The hardest thing about New Hampshire is that it’s not state-based, it’s not county-based, it’s local rule,” Krycki, Manchester’s environmental health supervisor, said. “Every individual town can create a list of ordinances that can differ from one location to another.” 

Kozlowski, who operates in New Hampshire, Maine and Massachusetts, estimated that he spent roughly $1,500 on government fees in New Hampshire alone last year. 

“I have a wall full of licenses inside my trailer,” he said.

The paperwork can be duplicative too. 

“The thing with the hawkers and peddlers that blows my mind is that you have to get a background check with the state, and then they want another for the permit, so it’s just a tax grab,” Kozlowski said. 

Some municipal officials understand how burdensome the rules can be. 

“I think the biggest issue that these food trucks face, and a lot of the complaints I get, is finding an area. That’s tough,” said Stacy Disabato with the Manchester City Clerk’s office. 

Having fielded lots of queries about the lack of food trucks over the years, there is interest at City Hall in becoming more accommodating, she said. 

“Anything we can do to bring business here, we’re really interested in learning.”

In Rochester last month, city officials invited four local food truck operators to set up in normally prohibited public spaces so they could keep their businesses alive.

“With the Covid-19 situation, their events and catering gigs had all dried up,” Rochester City Manager Blaine Cox said. “Two of our food trucks had semi-permanent locations. One was at the Home Depot and another was at the Harley Davidson dealership, and they were closed.

“They were basically shut out. And at the same time, with the governor’s order, we had quite a number of fixed-base restaurants that shut down. They didn’t bother to go to takeout, they just shut down.

“We reached out to our food truck operators and said, we know your business is drying up. If you’d like to come downtown, we have space for you.”

The idea was to keep the city’s four registered food trucks in business. With one of the newer operators, it worked, Cox said.

“One of our food truck operators said, If you guys haven’t done this for us, we wouldn’t survive.”

Food truck operators say the burden of so many costly and varied local regulations makes it hard to work in New Hampshire. 

“It seems to me that other states have their ducks in a row,” Spilman said.

If municipalities do not begin lifting onerous restrictions, state legislation is possible. 

Earlier this year, Kozlowski and other food truck operators went to Concord to petition legislators to adopt uniform, statewide regulations. They say they would rather have one set of state rules and a single fee than 15 different local ordinances and thousands of dollars in fees. 

Other states have already acted. 

After fielding similar complaints for years, Arizona legislators in 2018 passed a statewide food truck licensing bill that limited local regulatory authority. That same year, Rhode Island adopted a similar law that exempts food trucks from local hawkers and peddlers licensing. 

If municipalities want to avoid a statewide law that overrides their own ordinances, Los Angeles and some other California cities offer useful models. Food trucks flourished in L.A. after the city repealed regulations that restrained trade. Cities such as Fresno wrote regulations that achieved public safety goals without being overly restrictive. 

A 2012 Institute for Justice report, Food Truck Freedom, offers a list of suggested policies that would remove needless barriers while maintaining health and safety standards. The following suggestions are put together from recommendations made by food truck operators and the IJ report. 

To make immediate changes, leaders in municipalities that have declared a state of emergency might be able to relax rules temporarily during the state of emergency. This short-term measure could let food truck owners serve immediate local needs and relieve them from the burden of complying with regulations that sequester them to now-vacant downtowns.

  1. Lower hawker and peddler fees. These fees should exist only to cover nominal paperwork costs, not to raise revenue or discourage applications. Fees that range into the hundreds of dollars are clearly unreasonable burdens that have no relation to actual application costs. 
  1. Remove “abutter approval” language that gives neighbors a veto over a food truck’s location. These rules have no relationship to public health or safety and are merely a restraint on doing business. 
  1. Remove any language that restricts food truck operation within a certain distance of a restaurant. These restrictions are likely unconstitutional and should be removed immediately. In any case, they harm consumers by giving established businesses a veto over potential competitors. They also hurt other local businesses by keeping popular food trucks, and the customers who seek them out, away.
  1. Allow food vendors to operate on public streets and sidewalks as long as they do not obstruct traffic. Instead of creating specific set-back distances, Fresno, Calif., simply requires that vendors not “obstruct the free movement of pedestrians or vehicles on any sidewalk.”
  1. Allow food trucks to do business in any metered parking space for the duration of the meter. This will free vendors to find the spots most convenient for customers while preventing them from taking a space all day. 
  1. Allow food trucks to operate on residential streets. These prohibitions sometimes are handled by zoning departments, which treat food trucks as if they are opening a permanent store in a neighborhood. They are not. Food trucks can take orders by apps or online, just as take-out restaurants do, and deliver directly to customers’ homes. They also can use apps and social media to respond to customers’ location requests. Instead of cruising streets like an ice cream truck, some food trucks can stop and vend for a few minutes or a few hours in neighborhoods at the request of residents.This would be an especially valuable service during a stay-home order. 
  1. Allow food trucks to operate on more public property, particularly in parks and parking lots. Though many municipal ordinances limit food trucks to a few public locations, city officials often retain the authority to open other spaces at their discretion. The result is a random, unpredictable, and changing list of extremely limited available spaces. Food truck vendor locations should not be subject to the whims of municipal employees. A better policy would be to open parks and off-hours parking lots as a rule. Scarce space, such as near public swimming pools in the summer, can be put out to bid. Manchester auctions food truck spaces at eight city parks. 
  1. Let vendors compete. Manchester prohibits two trucks of the same type from being at the same park. Because there are so few vendors (only eight food trucks bid for eight park spaces in 2019), it hasn’t been an issue recently. But in more popular parks it could hurt consumers once food truck business expands. Vendors often respond to trends (cupcakes, for example). A city might have multiple grilled cheese trucks but no burger truck one year, then four hot dog trucks the next year. There’s no public harm in having two taco trucks at the same park. Limiting options, though, could keep prices higher and reduce consumer choices. 

Andrew Cline is president of the Josiah Bartlett Center for Public Policy.

Download a pdf copy of this report here: JBC Food Truck Regulations.

 

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Why should we have to ask permission to help each other?

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WMUR’s Hometown Hero this week is Alexa Cannon, a Founder’s Academy senior who started delivering groceries to people after she lost her job. She’s one of many, from business owners to individuals, who have begun offering urgently needed services outside of traditional regulatory controls.

In normal times, government prevents a lot of this innovation and cooperation by requiring permission before people can enter the market with a good or service. (Think of the police shutting down children’s lemonade stands.) 

Why weren’t people making face masks for doctors, nurses, and patients before? Because they aren’t allowed to. 

The Food and Drug Administration, which regulates face masks and respirators, suspended its normal, shortage-creating regulations only on March 25.

Why weren’t private labs making Covid-19 tests in February, when the coronavirus was quickly spreading across the United States?

Because the CDC shared testing instructions on Jan. 28 but did not allow private testing until Feb. 29, costing the U.S. an entire month of widespread testing.

In New Hampshire, the governor had to issue emergency orders just to make sure doctors could provide health care services over the Internet, out-of-state doctors could practice in New Hampshire, pharmacists could make and sell their own hand sanitizer, and notary publics could offer services remotely. 

The state even prevents itself from innovating. To allow the transition to remote learning, the state Board of Education had to pass an emergency rule suspending the rule limiting remote learning to five days.

All of this comes from a presumption among lawmakers and regulators that the government always makes people safer by requiring approval before providers can enter the marketplace. 

That’s the impulse behind laws that make it a criminal offense to give haircuts without a license or build a treehouse without a permit. 

A distiller in Vermont got to the heart of the issue when he told the Valley News after transitioning to hand sanitizer production, “Legally, we kind of weren’t supposed to be doing this, but no one cares right now.”

The opposite presumption has come to be called “permissionless innovation.” Duke University economist Michael Munger defines it as “a strong presumption in favor of allowing experimentation with new technologies and with new business platforms that use those technologies.”

It is, Munger says, the most important concept in political economy. 

As he explains, “delays in processing ‘applications’ for permission to experiment sharply curtail the types and frequency of experiments that are possible.”

That’s exactly what we saw with the U.S. response to the spread of the coronavirus. Critical weeks were lost before the government figured out that we didn’t have time to wait for the normal regulatory process to play out. 

That normal process is not just a problem during emergencies. As Munger points out, it curtails experimentation and innovation all the time, making us less well off. 

The coronavirus pandemic is helping to expose many flaws built into our existing regulatory regime. A lot of regulations that prevent innovation and market cooperation are simply unnecessary. 

If the emergency is exposing needless state regulations in health care, imagine how many there are in all the other fields the state regulates. 

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The coronavirus clampdown shows how controls breed controls

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“The extraordinary government clampdown on economic life that we are enduring — in order to preserve hospital beds and the capacity of doctors and nurses — is the result, not just of the coronavirus, but of the severe restrictions on economic activity that have made our economy brittle and poorly-suited to adapt and respond to this natural emergency.”

That’s the important point economics professor Raymond Niles makes in a brief essay for the American Institute of Economic Research.

Governments are ordering business closures and social distancing to ration hospital beds and other health care resources for which previous government regulations had created supply shortages.

Niles cites state Certificate of Need laws, which ration health care resources by requiring state approval before providers can offer new services or buy new equipment, CDC and FDA regulations that have limited the supply of personal protection equipment (PPE), and licensing laws that prohibit doctors and nurses from working in other states.

“This is the context in which we face the coronavirus and it sets the stage for the subsequent choices we must make. Our government is not making the right choice of repealing these death-causing restrictions. It is only doing it in small, halting ad hoc steps and on a completely inadequate basis. The only proper choice for the government is to repeal all of these controls, or as many of them as possible, as quickly as possible.

“If the government did that, the explosion in entrepreneurial activity — in production of tests, vaccines, cures, hospital beds, innovative new treatments, and an abundance of PPE and other life-saving equipment — would be monumental and it would save thousands of lives.

“We are getting some of it, as doctors, entrepreneurs, manufacturers, and everyday people, with shackles on and maybe in some cases partially removed by government, struggle and produce. But we could be doing so much more.”

The shortage of PPE, ventilators, hospital beds and medical professionals has shown the need to reexamine reams of laws and regulations that have caused delays in responding to the coronavirus. New Hampshire legislators and regulatory boards ought to be making lists of such laws and rules to address as soon as possible.

 

 

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Government-inflated rents hurt even more during periods of economic decline

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On April 1, rents were due for the first time since Gov. Chris Sununu declared a state emergency on March 13. News organizations reported on Granite Staters struggling to pay rent after suffering significant income loss in March.

As communities come together to help each other through these difficult situations, it’s important to understand that renters in New Hampshire have been squeezed for decades by a problem identified years ago and never fixed: government-inflated rental rates.

Emergency aid and help from caring communities can provide short-term relief during the next few months. But long-term rent relief can come only by addressing the apartment shortage created by local government regulations. 

In 2002, a legislative commission created to study workforce housing concluded that local government regulations were making rents unaffordable for many families. (The commission’s report was titled “Reducing Regulatory Barriers to Workforce Housing in New Hampshire.”)

“Individual communities, each acting in its own economic self-interest, have disconnected the State’s local housing markets from the rest of our economy and created an artificial scarcity that has driven prices beyond the reach of a large and increasing number of working families,” the commission found.

In 2008, the Legislature tried to provide relief by passing a workforce housing law that required municipalities to create “reasonable and realistic” opportunities for workforce housing. 

Twelve years later, rents are still rising as municipal housing restrictions have continued to strangle the supply of rental units.  

Data collected by the New Hampshire Housing Finance Authority illustrate the problem. 

The average rent for a one-bedroom apartment in New Hampshire rose from $587 in 2000 to $1,055 in 2019. Had rents risen at just the rate of inflation, the price would be $871, or $184 less than the 2019 rate. 

The average rent for a two-bedroom apartment rose from $774 in 2000 to $1,347 in 2019. Had rents risen at just the rate of inflation, the price would be $1,149, or $198 less. 

Saving $198 a month on rent would come to $2,376 a year. Some people who can’t pay rent this month because their hours were cut or their employer closed might have been able to cover a payment that was $184 or $198 cheaper.

As the 2002 legislative report noted, rents are being pushed up by local government regulations that have created an artificial scarcity in the rental housing market. For decades, demand for apartments and multi-family homes has far outstripped supply. Not enough rental units are being built because local governments have made it extremely difficult to build them. 

That inescapable fact is reflected in the state’s shockingly low rental vacancy rate. A healthy apartment vacancy rate is around 5 percent. New Hampshire’s rental unit vacancy rate in 2019 was 0.6 percent. The rental vacancy rate for the United States at the end of 2019 was 6.4 percent, according to the Federal Reserve Bank of St. Louis. 

New Hampshire renters have been burdened for decades by regulations that have prevented the supply of rental housing from matching demand. In boom times, restrictions on the construction of rental housing give the appearance that growth is being limited at no cost. But the cost is always there, and it hurts the most during times like this when thousands of people are losing their jobs or having their pay reduced.

If New Hampshire communities want to be places where everyone can find a home, the supply shortage will have to be addressed.

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A disease outbreak is a bad time to ban disposable plastics and paper

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Forcing people to carry reusable food and beverage containers in public could accelerate the spread of microbes that cause infectious diseases, multiple academic studies suggest, the Josiah Bartlett Center for Public Policy shows in a new policy briefing paper. 

As government strives to suppress the spread of the novel coronavirus, policymakers should immediately repeal laws, regulations and ordinances that ban disposable food and beverage containers, utensils and plastic straws. 

Attempts to ban “single-use” plastic grocery bags, water bottles and straws, as well as non-recyclable utensils and to-go containers, have spread worldwide in recent years. New Hampshire legislators make annual efforts to impose such bans or restrictions, and several municipalities already have banned plastic grocery bags. Concord, Mass., banned single-serving plastic water bottles in 2013.

As these bans were debated, concerns about public health tended to be dismissed, even though studies have shown genuine potential health hazards. This briefing paper outlines the public health reasons why policymakers should reject these bans.

The full briefing paper can be read here: JBC Disposables Ban Coronavirus.   

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A 2020 priority: Protecting N.H. from unlicensed art therapists?

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The Legislature opens its 2020 session on Wednesday, and among the bills recommended out of committee for passage that day is a proposal to protect Granite Staters from the cruel predations of… art therapists?

Really.

This urgent action wasn’t mentioned among the Legislature’s 2020 priorities, yet here is House Bill 546. Why?

Well, in every legislative session, a small group of art therapists comes to the Legislature with an urgent request: Please outlaw our competition.

They don’t put it quite that way, of course. The messaging is always about licensing being needed for insurance coverage, or the danger posed by poorly trained art therapists. Yet the bills always define art therapy as broadly as possible and include criminal penalties for its unlicensed practice. Classic rent seeking.

Usually, common sense prevails and the bill dies. Committee revisions to the latest version of this anti-competitive legislation might allow it to pass.

New Hampshire does not license art therapy as a separate therapeutic practice. In fact, only eight states do, according to the American Art Therapy Association. Art therapists who have advanced degrees, and sometimes licenses from another state, have for years argued that artists and therapists who blend art instruction with even a small dose of therapeutic practices are a danger to the public and must be stopped.

Never mind that art has been considered therapeutic since cave men started scratching on rocks, or that the practice known as art therapy was invented by an artist, not a licensed therapist.

Art therapists who hold advanced degrees and out-of-state licenses want the state to require that anyone who offers “art therapy” services… hold an advanced degree and a state license.

See how this works?

Currently, licensed therapists in New Hampshire can incorporate art into therapy sessions without having to spend several more years in school to obtain a separate art therapy degree.

For example, a child therapist might have a child express his or her feelings by drawing pictures. Children don’t have the biggest vocabularies, so this can be a great way to help children communicate complicated emotions.

Therapists are not alone in using art to help people deal with emotional or physical issues. Art instructors routinely help people express previously unarticulated emotions through the creation of art. Museums even offer programs that, while not conducted by licensed therapists, are therapeutic in nature.

For example, the Currier Museum of Art’s “Art of Hope” program “provides support for loved ones whose family members suffer from substance use disorder.”

Under House Bill 546, it would be illegal for anyone to offer “art therapy” services unless the instructor has “a masters or doctoral degree from an accredited college or university in a program in art therapy….”

The bill contains an exemption for art teachers who do not present themselves as therapists. But under the definitions in the bill, any presentation that an art instruction program is therapeutic in nature could be construed to run afoul of the law.

Included in the bill’s definitions of art therapy is:

“Using the process and products of art creation to facilitate clients’ exploration of inner fears, conflicts, and core issues with the goal of improving physical, mental, and emotional functioning and well-being.”

Art instructors have been doing this for centuries. Without a license. Suddenly, in 2020, it’s a danger to the public?

There’s no evidence that unlicensed art therapists are inflicting psychological damage on Granite Staters. In fact, as mentioned earlier, only eight states have a distinct art therapy license and only five cover the practice under another license.

But there’s plenty of anecdotal evidence that the absence of an oppressive licensing regime has allowed many people to find services that have helped them through difficult times.

Though presented as a public health measure, this bill is simply an effort to restrict competition. It serves a small special interest, not the public interest.

Artificially reducing the supply of a valuable service by writing unnecessary restrictions into law would be an odd way to start this new decade.

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Taking the first step to solving New Hampshire’s housing shortage

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A positive shift is happening in New Hampshire’s pro-housing movement. Gov. Chris Sununu helped highlight it on Wednesday.

Speaking at a housing forum organized by the Center for Ethics in Government at St. Anselm College, the governor criticized municipalities that use local regulatory powers to impose severe restrictions on housing development.

Bedford, the governor said, was an example of a town that has made it difficult for people to build lower-priced homes, particularly multi-family housing.

That comment made news and focused attention on local regulations that prevent developers from meeting New Hampshire’s high demand for new residential construction.

Taylor Caswell, commissioner of Business and Economic Affairs, called the situation a crisis, as did others at the conference.


New Hampshire Housing Finance Authority data support that description. The authority’s November Housing Market Report found that New Hampshire’s rental vacancy rate was a scant 0.75 percent. A healthy vacancy rate is closer to 5 percent.

As of October, only 44 percent of New Hampshire real estate listings were for homes priced below $300,000. The authority’s research shows that overall real estate listings have fallen 41 percent in the past five years. But to highlight the affordability problem, listings above $300,000 have fallen 8 percent while listings below $300,000 have fallen 60 percent.

Vacancy rates, listings, and prices signal a serious supply shortage.

In the past, much of the effort to address this ongoing problem has focused on state subsidies for affordable housing. But there’s an increasing recognition that subsidies will not solve the problem because a lack of incentive to build is not the cause of the shortage.

A poll conducted at the end of Wednesday’s conference reflected an increasing agreement that local government regulations are preventing developers from meeting the market demand for lower-priced homes.

State financial incentives did not poll as well as did proposals to educate the public about the issue and encourage citizens to loosen overly restrictive local regulations.

Developers we’ve spoken with about this issue say they want to build less costly homes, but local regulations often pose insurmountable obstacles. Zoning and planning rules can literally make it illegal to build small single-family homes on small lots or to construct multi-family dwellings in a way that keeps rental prices low.

There seems to be an increasing realization among housing activists and office holders that the market isn’t the problem, government interference in the market is. That understanding is the first step to fixing the problem.

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Who’s to blame for biomass plant closures?

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A handful of Democratic politicians on Wednesday stood in the snow outside an obsolete power plant and reversed their party’s customary line of attack when an industrial facility closes. Instead of blaming greed or billionaires or out-of-state corporations or winged monkeys for the recent closure of two N.H. biomass power plants, they blamed the government.

Wait, what?

Yes.

Well, not the government in general, just Republican Gov. Chris Sununu. They objected to his having vetoed bills that would have forcibly taken money from average people and given it to large, out-of-state corporations.

Wait, what?

Yes.

These Democratic politicians were attacking a Republican for opposing corporate welfare.

Specifically, the vetoed legislation would have created new ratepayer subsidies for biomass power plants. The vetoes caused two of the six plants (ones owned by a private New Jersey corporation) to close, they alleged.

Never mind the plants that didn’t close (one of which did get new state subsidies).

Never mind that the governor doesn’t run the shuttered power plants, didn’t make the decision to close them, and didn’t prevent their parent company from investing in them more heavily.

Also ignore a 2018 study published by none other than the State of New Hampshire, which showed the state’s biomass power plants to be expensive and inefficient compared to rival power producers.

The Office of Strategic Initiatives study showed two unmistakable trends, both driven by consumer demand for lower energy prices:

The removal or reduction of artificial price supports over many years.
The innovation-driven drop in the cost of other fuel sources.

Supposedly, the state has to force all Granite State residents and businesses to subsidize biomass power plants because they buy and burn wood pulp, thus keeping New Hampshire’s tiny timber industry alive.

But the state doesn’t have similar subsidies for paper companies or home construction, which are more important for the timber industry. Biomass accounts for only 3 percent of the value of a timber harvest, but sawlogs account for 90 percent, according to New Hampshire Business Review.

The state’s report showed that biomass plants might not have become so reliant on subsidies if they had invested more cost-savings initiatives or experimented with new business models. To conclude that the governor alone, rather than company officers and directors, was responsible for the fate of 1/3 of New Hampshire’s biomass plants (just the ones that closed) is a rather interesting position to take.

The state’s report concluded that biomass plants would continue to struggle because they inefficiently produce expensive electricity while most competitors, even other renewable power generators, more efficiently produce cheaper electricity.

“As new projects are connected to the grid, predominantly wind and solar, biomass will cede its market share to other forms of generation. These more flexible resources will contribute to more volatile, but lower market prices, leaving biomass generation at a steeper competitive disadvantage. New Hampshire ratepayers would likely need to provide continuous subsidies at above market prices to sustain Class III biomass generation.”

In short, burning wood (at least with existing technologies) is not the way to power a 21st century economy. A March U.S. Energy Information Agency report on the future of U.S. power generation didn’t even mention biomass, concluding that “most of the electricity generating capacity additions installed in the United States through 2050 will be natural gas combined-cycle and solar photovoltaic (PV).”

Biomass power generation is dying a natural death. That’s why companies that own biomass plants are reluctant to sink any more money into them. Forcing ratepayers to make up the difference between what people are willing to pay for power and what biomass power costs is neither compassionate nor morally defensible. It is massively wasteful — of other people’s money.

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Study: California paid leave law reduced new mothers’ income & employment, reinforced traditional gender roles

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A big argument for mandatory paid family leave is that it would help close the gender pay gap and level the playing field with men. Women who had access to paid leave would stay in their jobs and not derail their careers to care for newborns, the theory goes. Turns out, the opposite has happened in California, according to a comprehensive new study.

A study published this week by the National Bureau of Economic Research examined the landmark 2004 paid leave law’s employment effects on first-time mothers. The “results run contrary to claims that California’s 2004 Paid Leave Act improved women’s short- or long-term career outcomes,” the authors concluded.

The researchers found that “paid leave is associated with a statistically significant short-run decrease in employment of 2.1 percentage points and a long-run decrease of 4.1 percentage points.

“Moreover, we find little evidence that California’s 2004 Paid Family Leave Act increased women’s wage earnings,” the authors wrote.

The study found that “first-time moms who used the policy saw their employment fall by 7% and annual wages fall by 8% over the next decade,” a University of Michigan summary of the report noted. “Cumulatively, new moms taking up paid leave had fewer children and had earned about $25,681 less by 2014.”

“We were surprised that this modest policy seems to be nudging mothers out of the labor force,” University of Michigan economist and lead author Martha Bailey said.

The study, which examined tax returns, found that some women replaced a portion of their lost income with alternative sources, “suggesting that paid leave encourages women to transition to more flexible working arrangements.”

That’s important because proponents of paid leave insist that government must mandate this particular benefit instead of others that polls show employees would rather have, one of the most popular being flexible working arrangements.

As we pointed out in February, 88 percent of employees in a Harvard survey said they’d accept lower pay in exchange for more flexible work hours, but only 42 percent said the same of paid leave.

Flex time or remote working arrangements could encourage mothers to stay with an employer — something California’s paid leave program did not achieve.

“Contrary to predictions that paid leave policies increase attachment to pre-birth employers (and, thus, help women retain valuable firm-specific human capital), women who had access to paid leave were no more likely to remain with their pre-birth employer than women without paid leave access, both in the short and long run.”

California’s paid leave law did not rebalance traditional gender roles, either.

“Despite the fact that California’s PFLA also gave men paid leave for family and infant care, the study found no impact on men’s employment or annual wage earnings. California’s PFLA seems to be encouraging men and women into traditional gender roles rather than leveling the playing field at work, according to Bailey.”

New mothers who took advantage of paid leave spent more time with their children, the researchers found. That tends to happen when mothers leave the labor force.

So, in sum, the law pulled women out of the workforce, reduced their career earnings, and reinforced traditional gender roles.

One could like any or all of those outcomes, but they cannot be called “progressive” and they do not achieve paid leave proponents’ stated goals of keeping women in the workforce and shrinking the gender pay gap.

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