Governor Sununu’s Gloomy Outlook

How can we improve it?

Governor Sununu’s budget address on Feb 14 changed the tune from previous, glowing revenue reports. For the next biennium, it offered a pessimistic view, as well. Mr. Sununun revealed that  his policies of downshifting business taxes onto towns has not created the state’s revenue boom after all. In fact, he stated that it was one-time repatriation from federal tax law changes, plus the year’s merger revenue that accounted for $100 million of last fiscal year’s surge. That is less than the June 30 surplus of $95.8 million. Furthermore, the Governor’s budget projects that business tax revenues will actually drop 4% in FY2020 and another 2% in FY2021! But he wants to keep cutting business taxes, regardless, and he wants to increase the amount of public school funding diverted to private schools.

What else? The Bureau of Economic Affairs (BEA) has focused on increasing tourism for half a decade. As a result, tourism revenues have swelled more than 5% per year, on average. Yet Sununu projects tourism growth will drop to 3% in 2020 and to just 1% in 2021, despite BEA’s efforts. Then he proposes to flat-fund Meals & Rentals sharing with towns at the current dollar amount. Such flat-funding will discourage towns from investing in tourism, (not to mention, infuriating property taxpayers) since they will not reap the benefits of their efforts. Competition among towns for flat funds also discourages the regional collaboration needed to attract out-of-state and international tourism. To curb a self-fulfilling prophecy of falling growth, we should share more Meals & Rentals proceeds with towns, not flat-fund.

Meanwhile, companies tell me that their strong growth is hamstrung by workforce shortages. The demographic dip in young people born in the 1980’s will put a continued damper on growth for years unless we act. We have passed bills in House and Senate to improve training and build workforce. Economic development authorities, community colleges, universities and manufacturers themselves are putting on a full-court press to attract talent with better-supported public schools, affordable college and better remuneration.

Apparently, Governor Sununu expects these efforts to fail. The only industry for which he projects a promising future is lotteries, up 10% between 2020 and 2021! Must our state’s economic growth really depend on legitimizing sports betting?

What if, instead, we invest our dollars in a Sunny-Day Fund? Why not invest this $15 million to provide matches for Small Business Innovation Research and similar grants for the next five years, the way other states do? we could attract $45-60 million in federal investment to fund research and research labs. We now send $3/4 billion more to Washington each year than we get back, so we certainly deserve the federal funds. More importantly, startups that earn such grants are nine times more likely to succeed. The industries arising from such investments have added over a trillion dollars to US industry and 4.3 million jobs since 1980!

My company used an SBIR grant. We employed dozens of people in good-paying jobs and brought millions in revenues into the state for decades. We attracted talent. We spent money with local suppliers, and our employees never qualified for food stamps. Instead, they spent their own dollars with local retailers.

New Hampshire needs a Sunny-Day Fund, more revenue sharing with towns, and a focus on workforce attraction to brighten our future. I hope Governor Sununu will support the bills toward these priorities, and the others listed below, when they reach his desk.

My priorities entering the Senate were:

• Fix gerrymandering
• Improve school funding and college affordability
• Reduce property tax down-shifting from the state
• Attract workforce
• Care for our youngest Granite Staters
• Protect the environment
• Better regulate firearms
• Fund health & human services appropriately
• Improve telecom and transportation infrastructure

I am pleased to report progress on almost every one of those fronts! The bills below are just a sample. While we still must work to put these bills on Governor Sununu’s desk, I expect most to make it there:

HB 706-FN-A An act establishing an independent redistricting commission — with 15 Republicans, 15 Democrats and 15 from neither of the leading parties — came out of the House with a 216 to 126 vote in favor! Unfortunately, that is not a veto-proof majority.

SB303 The Senate voted to fully fund Special Ed reimbursements to towns, for exceptionally expensive placements, at the 80% regulatory level in 2020, rising to 90% in 2021. It also requires that Medicaid reimbursements must be paid to school districts, not town of residence. This ensures, in consolidated school districts, that all school taxpayers benefit from the reimbursement, not just those in the town of the student’s residence, since all taxpayers bear the cost of those services.

SB12 promotes companies which offer graduates of NH institutions of higher learning a bonus of at least $1,000 per year to become employed in the state

SB247 The Sunny-Day Fund, designed to attract talent and research funding to the state, passed out of the Education and Workforce Development committee with a 4-1 vote. It moves onto the Senate floor on Mar 7.

SB 274 Expands newborn home visits to all Medicaid recipients; for some unknown reason, only Medicaid mothers under 21 currently receive visits to ensure they have the knowledge and resources they need to care for their new babies.

SB24 Raises the cost and reduces the number of future Regional Greenhouse Gas Emissions credits available for CO2 emissions. This bipartisan bill will reach the Senate floor on Mar 7 with an Ought to Pass recommendation from the Senate Energy Committee.

HB 109, which closes the background check loophole. The House Criminal Justice Committee voted along party lines, 10-9, to recommend passage.

SB 11 This bill, passed by the Senate unanimously, addresses many problems around mental health, with better pay for staff and extended facilities for boarding. It also provides funding for hospital emergency rooms to treat, not just house, patients with mental health issues.

SB241 A Planning Study for Commuter Rail passed with a partisan vote of 14-10 on the Senate floor. There will be no cost to taxpayers since the matching may be paid with $2 mil of the state’s $800 mil in available toll credits for federal matching.