Guest post by State Senator Jeb Bradley
The Great Tax Debate
The legislative session may be winding down rapidly but the greatest issue of all, the budget, is far from being resolved. The budget debate comes against the backdrop of a distressed economy with high unemployment rates and families and businesses struggling to make ends meet. Will the conference committee on the budget make this situation worse?
Unfortunately, despite our Live Free of Die motto, this debate is not between those who would frugally limit government and those who would inexorably allow it to grow. Rather, it could be called the Great Tax Debate as various factions of the legislature seek to add their preferred tax hikes to a budget bursting with higher taxes and fees.
Why is New Hampshire in such a tax predicament? Some would argue the recession and falling revenues to state coffers is to blame. That’s only part of the story however, as Paul Harvey would say ‘the rest of the story’ is that spending in New Hampshire has increased dramatically.
New Hampshire’s current budget allowed total spending of $10.4 billion up from $9.36 billion in the prior budget. The budget the Senate recently passed proposes total spending of $11.6 billion and the House passed budget was only marginally lower. Bottom line: if this spending plan is ratified, total spending will have increased 23.8% over 3 budgets. It is hard to imagine that the average family or business in New Hampshire has seen their income increase by anything approaching that figure…..that is if they have any income left.
What makes these increases even more staggering is that spending is going down in other states around the country. The bi-partisan National Governor’s Association (www.nga.org) recently released a study that highlights an average 2.2% decline in state spending around the nation in 2009. Furthermore, our nation’s governors are recommending additional spending reductions of 2.5% this year. But, not New Hampshire, as there is little disagreement among Democratic conference committee members that total spending should increase by $1.2 billion.
With the exception of a few spending reductions such as closing the Laconia State Prison, the budget debate focuses almost exclusively on new or increased taxes. The House has passed a new tax on capital gains and estates, as well as increases on tobacco products, rooms and meals, insurance premiums, gambling winnings and gasoline. The Senate has passed expanded gambling for additional revenue, as well as increased taxes on tobacco, rooms and meals, and new onerous business taxes. Both budgets have numerous fee increases. Both budgets raid a fund paid into by doctors designed to keep medical malpractice rates in line. The $110 million raid of this fund will trigger an all but certain lawsuit which doctors stand an excellent chance of winning – because in reality it’s their money. More cynically both budgets underfund to varying degrees the state’s historic commitment to assisting towns and cities. So property taxpayers are going to be left out in the cold without a seat in this game of musical tax chairs.
Sound chaotic and controversial? It is and deadlines are looming.
). What a meeting! Many people spoke their piece, the likes of which hasn’t been heard for quite some time. One business owner stated that this unplanned, unexpected, and unbudgeted action means a $3,000 tax bill. Said another hapless taxpayer,
