Focus on Growth, Opportunity and Innovation is Paying Off for New Hampshire - Granite Grok

Focus on Growth, Opportunity and Innovation is Paying Off for New Hampshire

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The takeaway message from Gov. Chris Sununu’s State of the State address on Thursday was that New Hampshire, like comedian Larry The Cable Guy, gets her done.

The governor even said at the end of his address, “Let’s Get It Done.”

By solving problems through innovative, decentralized, low-cost methods, the state enables high levels of economic opportunity and growth, the governor said.

“Over the last year, New Hampshire families have benefited greatly from record levels of economic growth. Our focus on our workforce, while making high-paying, quality jobs available has paid enormous dividends.

“Business taxes are at their lowest this century, and more people are working than ever before. The model works — and it’s proven.”

We generally agree with that assessment of the New Hampshire model. But out of curiosity, we checked state economic data published in the state’s monthly New Hampshire Economic Outlook for this month, then compared it to the same report from February of 2017, the month after Gov. Sununu took office. These February issues report data from December of the previous year. We found that:

  • From December of 2016 to December of 2019, New Hampshire added 29,520 people to the labor force and 30,720 to the state’s employment rolls.
  • The number of unemployed individuals shrank by 1,210 persons, from 18,940 to 17,730.
  • New Hampshire’s unemployment rate fell from 2.8% to 2.6%.
  • Wage growth was up from an average wage of $890.46 to $939.21. That growth is lower than the rate of inflation as measured by the Consumer Price Index, but above the rate as measured by the Personal Consumption Expenditures method, which better accounts for the added value of improved consumer goods.

New Hampshire has experienced strong economic growth since the end of the last recession, and this growth has continued during Gov. Sununu’s tenure.

The governor can take credit for keeping business tax rates down and preventing numerous growth-harming taxes and regulations off the books during the last two legislative sessions. His defend-the-economy mindset has prevented the state government from reversing these positive economic trends.

Generally speaking, high business tax rates reduce, economic growth, opportunity and innovation.

A 2017 study by professors from Columbia, Duke and Harvard, for example, found that higher corporate tax rates led to lower corporate profits, which in turn led to lower domestic investment and, subsequently, lower economic growth.

And a 2018 study by economists from the University of Chicago and Harvard found that “taxation of both corporate and personal income negatively affects the quantity, quality, and location of innovation at the state level and the individual inventor and firm levels.”

Since taking office, the governor has focused a lot of his energy on protecting the economy from legislative proposals that would impeded growth, hiring, innovation and economic opportunity. That approach is working well for the state, which has hit record levels of employment in the past year and is, at long last, attracting young people again.

In other words, that approach is getting her done.

by Andrew Cline
Josiah Bartlett Center for Public Policy