New Hampshire is a small state dependent on small business. The single largest employer in the state is the government of New Hampshire. Did you know that?
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As of yesterday according to the New Hampshire Department of Revenue Administration (DRA), the state is hurting for money. Those are my words, not theirs. Here’s why the comment is a reasonable assessment of the situation. Let’s Use the DRA comparison period which is April 1, 2019, through April 18, 2019, compared with March 30, 2020, through April 20, 2020.
This comes from the DRA Daily Cash Basis Revenue Report for FY20. Based on that report the April revenue from Business Profits and Business Enterprise Taxes (BPT/BET) combined are down by 41.2%. That means that year over year comparison shows the state is down $61,776,490 this month in this tax category.
So, how big a deal is the BPT/BET statistic? Well based on last year’s actual revenue it was 59.1% of the state’s monthly total revenue. This is significant because the combined BPT/BET is a pretty good proxy for the state economy. This is true because the bulk of the state’s revenue comes from its businesses.
If business is off more than 40% recovery will be very difficult. It tells us that businesses are laying people off and closing. Those lucky enough to be able to stay open are trying to breakeven. Any business dependent on foot traffic or face to face contact is closed.
But is BET/BPT the only tax category in trouble? Well, no, no, it is not. Another revenue category is the Meals and Rentals Tax (M&R). This is a particularly good indicator of the health of the hospitality industry. Hospitality is hotels, motels, and restaurants. M&R revenue is down 40.9% and it accounts for another 10.2% of the state’s total revenue based on last year’s actual receipts.
Other categories of note might be Tobacco Tax which is down 44.5%. The Interest and Dividends Tax (I&D) which hits seniors especially hard is down 46.9%. The Miscellaneous category which is a catch-all category including everything not considered a major category… well, that’s down 81.5%.
April is not shaping up as a good month for the economy of New Hampshire. The only revenue streams above projections are Real Estate Transfer Tax and the Communications Services Tax. Combined they are up $1,994,213.
There is now a study committee in place to determine if, when, and how New Hampshire can re-open. The makeup of the committee sounds like the public health officials are in control. We will have to see what their work product is and how timely it is.
The legislature has raised business taxes because the economy is down and tax revenues are down. The legislature does not understand; if you tax something more… people use less of it. How are we going to get our businesses back up and running with that kind of help? It isn’t going to help get people back to work. Remember you voted these Bozos into office.
It sure looks like the re-open committee better get a move on or there may not be anything left to restart. We’ve been closed for part of March and part of April and the picture isn’t pretty. You cannot pay for unemployment, salaries, healthcare, social services, etc. if there aren’t sufficient tax revenues.
How is New Hampshire doing? We better be cutting state expenditures and opening for business or it’s going to be very cold and hungry very soon.