The Senate this week joined the House passing tax increases on New Hampshire businesses. Some reports give the impression that the House and Senate budgets would not raise taxes, but would repeal future tax cuts. Here we explain why that is not correct and the budgets raise business taxes, including the rates that businesses will pay this year.

Under current law, the business profits tax rate is 7.7 percent and the business enterprise tax rate is 0.6 percent for “taxable periods” that end “on or after December 31, 2019.” 

Both the House and Senate budgets would repeal those rates and replace them with rates of 7.9 percent and 0.675 percent, respectively. 

The budgets also would repeal the existing state law that lowers those rates further, to 7.5 percent and 0.5 percent, for taxable periods that end on or after Dec. 31, 2021.

Understanding how businesses pay taxes

What does it mean when state law declares that a tax rate applies to a “taxable period ending on or after December 31, 2019?” 

It does not mean that the tax rate takes effect on January 1, 2020.

A “taxable period” is not a calendar year. State law (RSA 77-A:1, IV) defines “taxable period” as a business’ fiscal year for federal income tax purposes. 

So a taxable period “ending on or after December 31, 2019” is a business’ fiscal year that starts in 2019 and ends on or after Dec. 31, 2019. 

A business will start to pay those tax rates in 2020, then, right? 

No. 

Businesses’ fiscal years do not always correspond with the calendar year. They can end on the last day of any quarter. 

Plus, businesses are required to pay taxes quarterly, not annually. 

Under New Hampshire law, any business with an estimated tax liability of more than $200 is required to estimate what its next year’s tax bill will be, and then submit 25 percent of that payment each quarter. 

Here is how that works.

In 2019, employers begin paying quarterly taxes for fiscal years that end “on or after December 31, 2019.”

For example, a business with a fiscal year that ends April 30, 2019, will start a new fiscal year on May 1, 2019. That new fiscal year will end April. 30, 2020. 

So starting on May 1, 2019, that company will be taxed at the rate in effect for “taxable periods ending on or after December 31, 2019.” It will make payments at that rate every four months throughout its tax year.

Under current law, companies with fiscal years starting May 1, July 1, and Oct. 1, 2019, will be making business profits tax payments at the 7.7 percent rate and business enterprise tax payments at the 0.6 percent rate this year. 

That’s why the House and Senate budgets do not just affect future tax rates that employers are not yet paying. The budgets would raise those fiscal year 2019 tax rates to 7.9 percent and 0.675 percent. 

So the House and Senate budgets would not merely not repeal future tax cuts, as is being reported. They would raise taxes on businesses this year.   

A tax increase is a tax increase

Furthermore, it is worth noting that “repealing a future tax cut” also is a tax increase. Those tax cuts are set in existing law. They apply automatically. To replace them with a higher rate is to raise taxes.

In an extraordinary show of party discipline, Senate Majority Leader Dan Feltes and Finance Committee Chairman Lou D’Alessandro leapt into action Tuesday to quickly smother a political hand grenade tossed by freshman Sen. Jeanne Dietsch, D-Peterborough. They smothered it the old fashioned way — by throwing Sen. Dietsch on top of it. 

Sen. Dietsch committed a double offense against party electability. First, she introduced an amendment (to an unrelated bill) to impose a 6.2 percent payroll tax on income above the $132,900 Social Security tax cap. Social Security taxes are not collected on income above that level.

Sen. Dietsch portrayed the tax as a reasonable levy on a small number of rich Granite Staters. But its financial and political impact were obvious. The tax would hit about 42,000 people and raise about $300 million a year, the Department of Revenue Administration estimated. That’s no small levy.  

Her other mistake was to state the obvious. “This is an income tax,” she acknowledged. 

At that moment, a submarine dive alarm must have gone off in Sen. D’Alessandro’s head.

Dive! Dive! Dive!

Sen. D’Alessandro, a senior senator with slightly less leadership experience than Moses, was so eager to kill the proposal that he ignored or forgot proper procedure and moved the bill without acting on the amendment. He was later compelled to go back and call a vote. (The amendment failed 6-0, N.H. Business Review reported. 

What made the proposal so frightening that it rattled even “Lion” Lou D’Alessandro? There was no way to spin the tax away as anything other than what it was — an income tax. Everyone was admitting it. 

“This is an income tax, which I oppose,” Sen. Feltes said. 

Interestingly, Feltes has spent a good portion of this legislative session arguing that his own payroll tax (in Senate Bill 1, his paid family leave plan) is not an income tax. Republicans say it is. What’s the difference?

Feltes’ bill includes an 0.5 percent payroll tax. But he cleverly wrote the bill so that it labels the tax an “insurance premium payment.” 

In the bill’s language, the “insurance premium payments shall amount to 0.5 percent of wages per employee per week” and employers “have the option of paying some or all of the FMLI premium payments on behalf of employees, or may instead withhold or divert no greater than 0.5 percent of wages per week per employee to satisfy this paragraph.”

Feltes’ payroll tax is a tax on wages. It gives employers the option to pay the tax before allocating it to employees or after. In either case, it comes out of employee compensation.

In cases where employers choose to credit the tax to money already paid to employees, the only difference between Sen. Feltes’ and Sen. Dietsch’s taxes is the amount collected. They are both income taxes. 

By giving employers the option to pay the entire costs themselves, Feltes seeks to put the burden on businesses, not employees, and avoid the income tax label. But the tax is tied to employee compensation and would come from those funds. At the very least, as long as everyone is acknowledging that a direct payroll tax is an income tax, then SB 1 authorizes an income tax.

If you’re curious who voted for and against SB 1, the roll call votes are here. 

After the U.S. Supreme Court ruled last June in South Dakota v. Wayfair that states could collect sales taxes from out-of-state remote sellers, New Hampshire lawmakers chose not to act. Other states did not make the same mistake. 

Eleven months after the Wayfair decision, the number of states with laws requiring out-of-state businesses to collect and remit sales taxes has more than doubled to 33, a Bloomberg Tax survey shows. 

The number of laws New Hampshire has passed to protect its businesses from these collections remains the same as last year — zero. 

Understanding the need for urgency, Gov. Chris Sununu called a special legislative session last July so lawmakers could quickly put some blocking legislation on the books. A majority of legislators opted to wait. A commonly heard reassurance was that we had plenty of time to act because states would respond gradually to the Wayfair decision. 

In fact, several states had passed laws authorizing cross-border tax collections before Wayfair, anticipating the ruling. Others wasted no time capitalizing on it, as the Josiah Bartlett Center warned. Why would a state wait a moment longer than necessary to expand its taxing power over people who cannot vote for any of its elected officials?  

Now, less than a year after the ruling, two-thirds of the states require businesses to collect and remit sales taxes if they do a specified amount of business in the state. 

And that isn’t the only Wayfair-related bad news. 

The Suffolk Superior Court in Massachusetts this week dismissed a lawsuit filed by six online retailers challenging that state’s effort to collect taxes on online sales retroactively. 

The day before that, the U.S. Supreme Court ruled in Franchise Tax Board of California v. Hyatt that states “retain their sovereign immunity from private suits brought in courts of other States.”

The ruling shields states from suit by private parties in other states. So a New Hampshire seller cannot sue another state in New Hampshire courts to protect itself against a cross-border sales tax collection. 

The Hyatt case was brought by a Nevada resident who had fled California’s hight taxes and was pursued by his former state’s tax collector. The Multistate Tax Commission, which promotes and facilitates cross-border tax collections, filed an amicus brief on behalf of the Franchise Tax Board of California. It had previously filed a brief supporting South Dakota’s pursuit of Wayfair. This week’s ruling is generally considered favorable to states that hope to reach into other sovereign states to collect taxes. 

As The Wall Street Journal wrote in January, a win for California’s Franchise Tax Board would mean that “governments could bully, extort and defraud residents of other states with legal impunity and no political accountability.”

This is now the law of the land, meaning New Hampshire retailers are increasingly at the mercy of foreign tax collectors. 

What has the New Hampshire Legislature done to protect Granite State businesses?

The House Ways and Means Committee retained three bills written to protect business from foreign sales tax collections, refusing to pass them. The Senate did pass Sen. Jeb Bradley’s Senate Bill 242, which is very similar to the bill killed in special session last year. It remains in the House Ways and Means Committee, where it has sat since February 25.     

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

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

In the first 10 weeks of the 2019 legislative session, the New Hampshire House of Representatives passed nearly $310 million in tax and fee increases and $565 million in new spending, Grant Bosse reported at New Hampshire Journal this week. That’s $31 million worth of tax and fee increases and $56.5 million in new spending per week. 

“The full House voted to increase the state’s two largest business taxes, accounting for most of the increased tax revenue in Fiscal Years 2020-2023. But the House has also passed several other pieces of legislation that increase state revenues or expenditures.  If all the bills given House approval were to be signed into law, taxes and fees would increase by $108 million in the next two years, and by $202 million in the following biennium, according to official estimates from the Legislative Budget Assistant’s Office (LBAO).

“Other new revenues come from a tax on mutual funds to pay for a new state college savings program, an increase in OHRV and snowmobile fines, and more than doubling environment fees.

All that revenue doesn’t come close to covering the $565 million in new spending the House has passed so far.

“Spending would jump by $319 million in FY 20-21, and $246 million in FY 22-23. These figures do not capture the full increase in the state budget. In many cases, lawmakers have only appropriated funds for the first year or two on a new program, and the LBAO does not assume that spending in one budget will necessarily be carried over to the next.”

New minimum wage regulations

In addition to raising taxes, primarily on businesses, the Democratic-controlled legislators have moved forward bills to mandate that businesses pay their lowest-skilled employees above-market wages. 

The House on March 14 passed House Bill 186 to raise the minimum wage by 60 percent, to $12 an hour, over the next three years. 

The Senate on March 14 passed Senate Bill 271 to mandate that contractors hired for public works projects pay at least the “prevailing wage” for construction work. 

Both are minimum wage bills that force employers to pay entry-level employees rates typically paid to more experienced employees. As we noted in a policy brief earlier this week, such minimum wage hikes harm the lowest-skilled workers. 

As a 2015 Federal Reserve Bank of San Francisco review of minimum wage literature concluded, “the most credible conclusion is a higher minimum wage results in some job loss for the least-skilled workers—with possibly larger adverse effects than earlier research suggested.”

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

Why would legislators pass a law to move the lowest rung on the economic ladder farther out of reach for the least-skilled workers? 

Politics is a game of stories, not data. The minimum wage story is easy to tell from the vantage point of supporters. They can produce lots of people who tell lawmakers and the press how hard it is to make ends meet doing low-wage work. 

Though opponents have better data, you can’t go to a fast food restaurant and find the employee who wasn’t hired, then bring him to testify to legislators. The data show clearly that minimum wage increases reduce job opportunities for the lowest-skilled workers. But the people who weren’t hired aren’t told that they might have been hired at $8 an hour but not at $12, so they can’t tell that story.

Business owners and managers are being loaded with new expenses (this doesn’t even include the unnecessary paid family leave mandate) that will extract from them hundreds of millions of dollars. If all of these bills become law, it will be hard to see how the state’s jobs boom is not harmed. 

In the last legislative session, this newsletter warned about the dangerous precedent legislators would set if they passed a tax incentive package tailored for a specific industry, in this case a single company, Manchester’s Advanced Regenerative Manufacturing Institute (ARMI). New Hampshire doesn’t do industrial tax incentives, we warned, and if the state starts, other industries will come, hat in hand, to explain how their critically important industry deserves special tax treatment too.

Behold, on Wednesday, before the House Ways and Means Committee, Rep. Tim Lang, R-Sanbornton, presented his bill (House Bill 234) to create a film industry tax credit. To sell it, he noted that it was based on the ARMI bill. 

“The wording is almost identical to the regenerative tissue bill,” he said.

That taxpayer giveaways for the $43 billion (in revenue alone) Hollywood film industry is the first  successor to the ARMI subsidies is a perfect illustration of the bonkers nature of state industrial incentives.  

As if to emphasize that point, Oscar himself came to ask for a handout. 

Oscar is made of bronze and plated with gold. And he wants a subsidy.  

Preceding Oscar were a few people who had been connected to the film industry at some point in their careers. They mentioned the generous tax credits other states offer. They dropped  names of celebrities they had encountered. Then, just as in a movie, a tall, handsome man dressed in black, with flowing silver hair, who spoke with the unmistakable timber of an actor’s voice, stepped up to make an unexpected presentation.

He reached into his black backpack, withdrew its hidden passenger, and placed the well-worn statuette on the desk before him. 

The sounds of soft gasps and impressed whispers floated through the air. 

The man was Ernest Thompson, author of New Hampshire’s single greatest claim to Hollywood fame, “On Golden Pond.” In 1982, that screenplay won Thompson a Golden Globe and the lifelong companionship of the little golden man who accompanied him to Concord on a cloudy Wednesday tucked into the dark hollows of a nondescript hiker’s backpack.

Charming and captivating, Thompson regaled the committee with tales of Hollywood glory, all of which could be New Hampshire’s again if only the state would subsidize film production.  

Production executives tell him, he said, that they won’t film the sequel to “On Golden Pond” in New Hampshire because Massachusetts offers incentives and New Hampshire doesn’t. 

All the while, Oscar glowed in silent, golden testimony of his own.

In a movie, this would’ve been the rousing scene, with soaring music and a closeup of someone brushing away a tear, that preceded a unanimous vote to pass the bill, thus validating the hero’s journey and confirming the value of “investing” in “the arts.”

But Concord is a practical, not a dramatic, place. Instead of cheers and tears, there was only the voice of the committee chair as she interrupted the tales of celebrities gracing New Hampshire’s hills and valleys, cut off the testimony, and firmly braved the cold, golden glare of the little bald man on the desk. 

In the people’s House, even Oscar has only five minutes to testify, and there was one last witness to call. 

That witness was from the Josiah Bartlett Center for Public Policy. Instead of a celebrity, we had data. 

Among the points we made to the committee were:

  • Massachusetts’ own study of its tax credit program concluded that the credit returns only 14 cents on every dollar spent. 
  • A North Carolina study of its tax credit program concluded that it returned only 19 cents on the dollar. 

It’s not easy following Oscar. But someone had to present the case that an industry that hands out gold-plated statues even to the nerds who make cool spaceship sound effects shouldn’t get taxpayer subsidies. 

We presented the only testimony against giving New Hampshire taxpayer money to Hollywood producers. It was Josiah Bartlett vs. Oscar. 

Come to think of it, that might make a pretty good movie, provided “Oscar” is a giant bear or an alien or a sinister British commander during the Revolutionary War. 

A heroic Josiah Bartlett fighting some powerful enemy would be fine with us, just as long as the movie came with the disclaimer: “No taxpayer dollars were harmed in the making of this film.”

The incoming chairman of the House Ways and Means Committee wants New Hampshire to go from having the second-lowest corporate tax rate in New England to the second-highest (based on Tax Foundation rankings). The incoming House speaker initially expressed opposition to the idea, only to backtrack in an interview with the New Hampshire Union Leader. 

The message is clear: Expect the House to pass a large business tax increase in 2019. 

Rep. Susan Almy, D-Lebanon, told New Hampshire Business Review that she plans to introduce two business tax bills early next year. One would repeal the rate reductions, started in 2016, which cut the Business Profits Tax from 8.5 percent to 7.9 percent this year, and the Business Enterprise Tax from 0.75 percent to 0.675 percent. The BPT is scheduled to fall to 7.5 percent and the BET to .05 percent in the tax year ending in 2021. 

New Hampshire’s overall business climate is strong, but the state ranks 45th on the Tax Foundation’s corporate tax ranking. Even after the cuts, our business tax rates remain high. Making them once again higher than those in all of our neighboring states would hurt New Hampshire’s economic competitiveness and discourage economic growth. 

It also would hurt small business formation. A Federal Reserve study earlier this year found a strong negative relationship between high corporate tax rates and entrepreneurship. 

More than half of New Hampshire employment comes from small businesses, which comprise 99 percent of all businesses in the state, according to Small Business Administration data. Raising the corporate rate would not only make New Hampshire less competitive among Northeastern states, but it would suppress new business startups.

Speaker Steve Shurtleff seemed to have a good sense of the negative effects of higher corporate tax rates when he told NHBR, “I don’t see why we wouldn’t maintain the status quo…. We’ve got a good robust economy in New Hampshire. We don’t want to do anything to jeopardize that.”

That’s exactly the right attitude, and New Hampshire businesses would be reassured had the incoming speaker stuck to that position. Unfortunately, he later told Kevin Landrigan that he must have misspoken and that Almy’s plans were “on the right track.”  

Almy’s other bill would let the Legislative Fiscal Committee increase the BPT if revenue declines to the point that the rainy day fund is put in jeopardy.

The only track Almy’s bills are on is the one to slower economic growth. Almy thinks the Legislature would have a veto-proof majority to raise business taxes. If that’s true, the state economy is at risk of taking a sudden and entirely preventable downturn next year. 

Merry Christmas, New Hampshire. 

The strong economy has brought gifts for all the girls and boys of the Granite State. It has been dropping jobs and money like Santa dropping misfit toys.

The New Hampshire Department of Employment Security reported on Monday that the state’s unemployment rate fell to 2.5 percent in November. The state added 16,570 jobs from November 2017 to November 2018. From October to November, the state added 1,170 jobs. 

The national unemployment rate in November was 3.7 percent, a full 1.2 percentage points higher than New Hampshire’s. 

The government sector is being showered with gifts too. 

The Department of Administrative Services reported that total state revenues in November were above budget by $3.8 million (3.5 percent) and above the prior year by $2.8 million (2.6 percent).

The department reported that business tax revenues for November “totaled $16.2 million, which were $5.6 million (52.8%) above plan and $1.1 million (7.3%) above prior year.” Year to date, “business tax collections are above plan by $63.8 million (37.6%) and $43.9 million (23.2%) above the prior year.”

From state fiscal year 2016, when the first round of state business tax cuts took effect, to the end of fiscal year 2018, business tax revenue exceeded expectations by $319.5 million, as we reported in the fall. With business tax revenues coming in $63.8 million above plan so far this year, the total in unanticipated business tax revenue since the tax cuts took effect has reached $383.3 million. 

That’s effectively found money. New Hampshire’s business tax cuts are not solely responsible for this windfall. The Tax Policy Center, a joint project of the Brookings Institution and the Urban Institute, reported on Monday that U.S. states enjoyed a significant revenue boost in fiscal year 2018. The 7.8 percent increase in state revenue came primarily from individual income and business taxes and is thought to have been driven in large part by the federal tax cuts. 

As we prepare to enter 2019, a state budget year, there will be some pressure to repeal the business tax cuts. Those cuts will be portrayed as a giveaway to wealthy businesses. In fact, they contributed to a long period of economic growth that created thousands of jobs and sent state revenue soaring.  

Concord is abuzz with speculation about the newly elected Democratic majority’s legislative agenda. It’s no mystery. At a panel sponsored by The DuPont Group and New England College on Friday, incoming Senate President Donna Soucy reminded the audience that Democrats campaigned on an agenda (called the Granite State Opportunity Plan), and they intend to govern by it. 

The priorities outlined in the plan are clear: Higher state spending on health and social services, education and infrastructure; increased subsidies for favored energy producers; more regulations on businesses; and higher business taxes.

The plan criticizes recent business tax cuts as tax giveaways to wealthy, out-of-state corporations. Democratic candidates from gubernatorial nominee Molly Kelly on down used similar rhetoric when campaigning. The state Democratic Party’s website is full of attacks on Gov. Chris Sununu for supporting business tax cuts. 

Yet when Soucy outlined the party’s agenda on Friday morning, she did not mention tax increases. That’s a good sign because the business tax cuts that were so much maligned during the campaign did not reduce state business tax revenue. Since the cuts, business tax revenue has risen far beyond expectations. 

As we pointed out in October, in the three full fiscal years since 2016, when the first round of the tax cuts took effect, business tax revenue exceeded budget expectations by $319.5 million.  

That trend has not subsided. In the current fiscal year, which started July 1, business tax revenues are $58.2 million (36.6 percent) above plan and $42.8 million (24.5 percent) above the prior year.

More than 1/3 of $1 billion in unanticipated business tax revenue has funded a lot of additional state pending. And that puts the new legislative majority in an interesting situation. 

They campaigned hard against those tax cuts. Yet the record shows that the cuts coincided with a sustained increase in business tax revenue that continues to fill state coffers with enough money to fund a host of new spending priorities. 

Will the new majority risk that revenue by raising rates, or will leadership decide to leave well enough alone?

Business tax cuts have helped raise New Hampshire to No. 6 on the Tax Foundation’s Business Tax Climate Index. No other New England state is in the top 25. Vermont is a lowly 41. New Hampshire is a lone outpost of business tax sanity in New England, which is clearly helping our economy. 

Next week, Americans will indulge in the fine New England tradition of consuming a large fowl fattened for the purpose of providing us sustenance. It’s a tradition that symbolizes the bounty of our land and our market economy. We should remember, though, that there are birds to eat and birds to leave alone.

Plump American turkeys? Tasty. Geese that lay golden eggs? Best to let them keep laying. 

Recently retired U.S. Supreme Court Justice Anthony Kennedy, a dedicated follower of passions, enthusiastically fell for the fiction that the South Dakota vs. Wayfair case was actually about “leveling the playing field” between online and traditional retailers through expanded sales tax collections. It wasn’t. 

Under the “physical presence standard” that existed before June’s Wayfair decision, states could collect 75-80 percent of the sales taxes that were possibly collectible from online transactions, a 2017 GAO report found. It isn’t clear how much of the remainder could be collected given the safe harbor and other limitations endorsed in the Wayfair ruling.

Though the Supreme Court didn’t rule South Dakota’s law constitutional, it strongly suggested that any law set up in a similar way would be. Among the provisions the court seemed to endorse were safe harbors, simplified tax rates, and collection software provided by the state.

South Dakota’s safe harbor provision states that taxes will be collected only when an out-of-state business has $100,000 or more in sales or 200 or more transactions. The tax simplification standard means that states would have to ease their definitions of taxable goods and minimize rate differences among localities. 

These provisions, along with the fact that most large retailers were already collecting state sales taxes, suggest that states would collect some new sales tax revenue but not nearly as much as previous estimates of available revenue had predicted.

If the argument was that Amazon kills downtowns and shopping malls because people avoid sales taxes, well, Wayfair wasn’t a very good remedy. Amazon was already collecting state sales taxes prior to Wayfair. And, obviously, states could just cut their sales tax rates to make their local retailers more competitive.

But the point of this court case was not to make brick-and-mortar stores competitive. It was to expand state tax collections across state borders. And not just for sales taxes, but most critically for income taxes.   

We can feel your eyes rolling. Income taxes? Really? 

We call your eye roll and raise you one emergency rule issued by Wisconsin on October 1. The Wisconsin Department of Revenue issued the rule to clarify its tax policies post-Wayfair. Buried in the rule is this sentence:

“Retailers with sales and use tax nexus in Wisconsin may also have nexus in Wisconsin for franchise or income tax purposes.”

And there it is. This is the game. Wayfair opens the door to cross-border collection of multiple state taxes — personal and corporate income, franchise, gross receipts, etc. 

By eliminating the physical presence standard, Wayfair gives new meaning to the term “the long arm of the law.” Any “nexus” that can arguably connect a business or individual to another state can create a tax liability in that state.

States are already pursuing this, which has the potential of eroding, if not destroying, the New Hampshire Advantage. People move here to avoid income taxes and shop here to avoid sales taxes. If Wayfair creates a de facto national income and sales tax, New Hampshire loses a major competitive advantage over other New England states. 

As Americans for Tax Reform President Grover Norquist put it at the Wayfair tax panel you should have attended in Concord on Wednesday, the ultimate goal of the high-tax states that spout the “level playing field” line is the destruction of interstate tax competition. 

This is why it’s so important for New Hampshire to pass what legislation it can to protect its businesses and residents from cross-border tax collections. Without a state law that blocks such collections, it likely would be too risky for an individual or small business to sue a foreign state. Paying the tax would be much cheaper. 

But with a law to stymie such collections, a business or individual would have firmer ground on which to stand. And the law might discourage many states from even trying to collect in the first place, as New Hampshire’s 2009 Town Fair Tire law did. 

The Wayfair decision really does threaten New Hampshire’s unique tax structure and the competitive advantage that structure gives us over our neighboring states. Legislators cannot let it stand unchallenged.