The Blue View: Republican budget is bad for Hampton and NH
By Chris Muns
Originally published June 7, 2021 in Seacoast Online.
Every two years, the N.H. Legislature establishes a budget for the next two fiscal years (which run from July 1 to June 30). The governor proposes a budget in February and the House of Representatives gets the “first crack” at it, before passing their recommendation on to the state Senate. When both houses come to agreement on what they believe should be included it goes back to the governor who can then approve or veto it.
This year, for the first time since 2017 Republicans control both houses of the legislature as well as the governor’s office.
The budget passed by the House Republicans in April would appropriate $13.149 billion between July 1, 2021, and June 30, 2023 (fiscal years 2022 and 2023). While that is certainly a large dollar amount, it is 0.3% less than the current two- year budget which was passed by House and Senate Democrats in September 2019. Since general inflation between September 2019 and April 2021 was 3.8% what that means is that there will be a real reduction of about 4% in services provided by our state government over the course of the next two years. And since approximately 44% of our state’s budget is for health and human services it means that the most vulnerable amongst us will be impacted the most. As constructed by House Republicans, the budget would provide $207 million less than what the Department of Health and Human Services needs just to meet its current commitments.
But there’s more.
The budget that House Republicans – including Hampton Republican State Representative Tracy Emerick – voted for contains several provisions that will increase our property taxes in Hampton by approximately $ 1 million.
It eliminates $40 million in direct municipal aid to cities and towns, which will cost Hampton $230,972 (and Hampton Falls $29,488 and Seabrook $289,392).
It defunds $15 million in water grants to local communities for 162 previously approved projects, including $577,026 for projects already committed to in Hampton.
It reduces by $90 million state aid to support local education ($168,125 for Hampton; $80,173 for Hampton Falls; $272,593 for Seabrook; and those numbers do not include the impact of the reduction in state aid to Winnacunnet High School).
It also continues the practice of sharing only about 22% of Rooms and Meals Tax revenues with local communities even though the statue requires that towns receive 40% of the total. So, since Hampton accounts for a large portion of the state’s total rooms and meals revenue, we will continue to receive less than our fair share in return.
There is a myth – particularly among Republicans – that we have to cut spending because the state simply does not have the revenues to support that spending.
Another myth is that tax cuts benefit small businesses and “average” working Granite Staters.
In reality we have the revenues – and the means to generate additional amounts – but we continue to “give” a portion of those revenues away to large multinational corporations and high wealth individuals.
The Business Profits Tax is the largest single source of revenues for the state; in fiscal year 2020 it generated $450 million in revenues. The budget passed by Representative Emerick and his Republican colleagues includes yet another reduction in the Business Profits Tax (which was at 8.2% in 2015) to 7.6%. Republicans will argue that this will benefit and support small local businesses, when - in reality- large multi-state and multi-national corporations are the ones that will benefit the most; they will receive 62% of the benefit of this reduction.
The Interest and Dividends Tax is a 5% tax paid – mostly - by high-net-worth individuals on assets (primarily stocks and bonds) they own. During fiscal year 2020 it generated $125 million in revenues.
So what do House Republicans want to do?
The budget they passed includes a phased in reduction of the Interest and Dividends Tax. And who will that benefit? Only 25% of the individuals filing a tax return have taxable interest and dividends of more than $20,000. But since they pay 89% of the Interest and Dividends Tax, they will benefit the most from this elimination.
The sad real truth is that since at least 2010 House Republicans have been committed to – as they like to say – “starving the beast;” ensuring that our state government does not have the revenues it needs to meet even its most basic functions.
They do not believe in or support the notion that government has and can play an important role in addressing our common needs. When the state is then unable to meet those needs due to a lack of funds, it “proves” their point. The budget House Republicans passed and sent to the Senate in April is just their latest attempt to achieve their ultimate goal.
In the meantime, our local property taxes go up, the least fortunate amongst us receive less and less of a hand up, rich retirees from out of state and large multi-national corporations reap the largest rewards, our roads and other infrastructure continues to crumble and we continue to lead the nation in how much it costs N.H. families to send their children to N.H.’s public universities.
We can and need to do better. Contact state Representative Emerick and ask him why he voted for this budget and ask state Representative Max Abramson why he didn’t do more to persuade his Republican colleagues that this budget is bad for Hampton, bad for Seabrook and Hampton Falls and bad for New Hampshire. To get their contact information go to www.gencourt.state.nh.us and click on “Contact Your Legislator.”
Chris Muns is a Hampton resident who served on the Winnacunnet School Board between 2012 and 2015. He also represented Hampton as one of the town’s five N.H. state representatives between 2012 and 2014. He is currently the chairperson of the Hampton Town Democratic Committee.