Voters in Grafton, which has become ground zero in the push by Free Staters to dismantle government services, have rejected an attempt by group members and their allies to slash the town’s budget. Valley News staff writer Chris Fleisher has the details:
The $825,956 budget lost, with 270 voting against to 256 in favor, forcing Grafton to move forward with the larger default budget of $940,366. The default budget is slightly less than the $954,523 plan the Selectboard had originally proposed, but will nevertheless keep in place some of the services that may have triggered cuts had the budget that was put before voters yesterday been approved.
Graftonites also approved warrant articles authorizing additional spending to buy a new police vehicle and tow truck, pave roads and make improvements to the town’s fire and ambulance building. They rejected a 2% tax cap and an article that would have instructed the Board of Selectmen to reduce the budget by 10% each year for the next three years.
Selectman David Rienzo, who lost his re-election bid yesterday to Sean Frost, said Grafton voters sent a clear message to the libertarian activists in town who have sought to scale back local government services.
“I’m seeing the town starting to push back on the Free Staters,” Rienzo said last night.
On WMUR’s Close Up, former state House Speaker Bill O’Brien explained his opposition to raising the state’s gas tax, which would generate additional revenue to repair and maintain the state’s roads and bridges. “We don’t need the money,” he declared.
The state’s bridges are in great shape, he wrote on Facebook:
I have been told most are red-listed because the approaches don’t comply with federal highway standards as they have evolved over the years. It’s like calling our houses red-listed because they no longer comply every time the housing or electrical codes are updated.
It’s an outright lie. Here’s the criteria the Department of Transportation uses when it places a bridge on the state’s “Red List:”
Bridges where one or more major structural element is rated as poor condition or worse, or require weight limit posting.
A study by a national transportation research group notes there are 152 state-maintained bridges in New Hampshire that are currently rated poor for one or more structural elements. By 2016, that number is expected to increase by 15 percent under current funding.
Today the New Hampshire House rejected a proposed constitutional amendment that would have required a super-majority vote by both chambers of the legislature to raise taxes or fees.
CACR 1 was defeated by a 149-206 vote. The only Democrat voting in favor of the amendment was Free Stater Rep. Tim O’Flaherty. Rep. Tim Smith, a Manchester Democrat who identifies with the Occupy movement, spoke in opposition and called out “those who would seek to dismantle our government entirely:”
This bill is pure obstructionism. Nothing more, nothing less. When we go back to our districts and have constituents express frustration that the government can’t get anything done, this bill – that we are about to vote on – is a perfect example of what they are frustrated about.
Trying to make it even harder for government to do it’s job, and giving huge power to the minority party if they so seek to obstruct routine functions of the general court, is an absurd model.
We have no idea what the future holds for the Granite State. … Making it harder to fund the state only serves the interests of those who would seek to dismantle our government entirely….
A survey from New England College finds Granite Staters favor a tax increase on upper income earners by a two to one margin. 66% of New Hampshire voters agree taxes should be raised on families with incomes over $250,000, with 54% agreeing strongly. Just 28% oppose the tax increase.
A plurality of voters support increasing the eligibility age for Medicare benefits by a 48% to 43% margin. Women oppose the change 46% to 42%, while men favor it 55% to 39%. 51% of Democrats oppose the increase compared to 39% who support it. Republicans favor raising the age by a 54% to 40% margin.
The results are based on automated calls to 658 registered voters with a +/- 3.8% margin of error. The survey was conducted on December 4-6, 2012.
I’ve always believed that this state will not seriously consider an income tax as an alternative to our burdensome and regressive property tax until it is championed by a Republican governor, our version of Nixon Goes to China. This year’s gubernatorial campaign reinforced that belief.
Perhaps today marks the first step in that direction. The editors at the staunchly Republican Foster’s Daily Democrat today expressed the hope that “some day, somewhere, somehow somebody would come up with some better way.”
For the time being, both Democrats and Republicans seem unwilling to pursue that crusade. But for what it is worth, we will plant the seed to be potentially harvested at a later date.
Both Democrats and Republicans who will fill the next session of the Legislature seem to understand the fragile nature of the economy. For that reason and for fear of touching New Hampshire’s third rail of politics, any income tax proposal will remain in a coma for now.
But mark these words, the issue will one day be revived and done so in earnest. As today’s baby boomers move more and more into retirement — many on fixed incomes due to recent recessions — the numbers of those Granite Staters suffering under the property tax will grow. When that happens, we expect talk of an income tax to return in earnest. And when this happens, it will not be easily dismissed by “the pledge.”
Associated Press reporter Norma Love points out that Republican gubernatorial candidates Ovide Lamontagne and Kevin Smith both propose slashing the state’s business taxes, but neither says how he would balance the budget.
Kevin Smith’s proposed tax cuts could potentially cost the state more than $1 billion in lost revenue by 2020 — if his premise that lower tax rates will boost revenue isn’t realized.
His main rival, Ovide Lamontagne, has a more modest tax cut proposal that could mean $120 million in lost revenue during the same time frame.
Both also propose other tax changes that are more difficult to estimate, such as credits. Those could mean even more revenue losses.
Neither candidate has outlined specific budget cuts they would seek to pay to offset the tax cuts.
Lamontagne responded saying his plan would require spending cuts if tax revenues fall. “He did not specify what those cuts would be,” wrote Love, “but pledged to take ‘a hard look’ at the budget.”
Smith claimed that “he could make state government more efficient to make up for the lost revenue.”
Self-proclaimed constitutional expert Rep. Dan Itse has a rather creative interpretation of the U.S. and New Hampshire Constitutions.
Appearing on Speak Up, which is televised by Access Nashua, the GOP chairman of the House Constitutional Review and Statutory Recodification committee maintained government has no authority to provide assistance to people in need. Helping those living in poverty buy food is akin to armed robbery, he said.
Itse: Government has no power that the people themselves don’t originally have. Just take the idea of food stamps. Do you have the power to go to your neighbor, stick a gun in his belly and demand that he pay for your children’s food?
Avard: Absolutely not.
Itse: How, then, can you delegate that power to government? If you don’t have it, you can’t delegate it. Government ought not to be exercising any power that any of us can’t exercise individually.
The Keene Sentinel takes a look at the two proposed constitutional amendments that would limit the options for future legislatures to raise revenue and describes them as solutions in search of a problem.
A 3/5 supermajority vote by the legislature would be required to impose any new or increased taxes and fees if CACR 6 is adopted, while CACR 13 would prohibit a state income tax.
An odd thing about these measures is that they are being proposed in a state whose government has consistently ranked as one of the most tight-fisted in the nation. The overall tax burden in New Hampshire has long been low because the citizen Legislature has long insisted on low spending.
Why, then, the need for the amendments? The chief proponents say they’re worried that future legislators won’t have the backbone that they themselves have to resist unreasonable demands on the taxpayers. Backbone has a nice manly sound to it, but we like brains, too, and brains help one understand that supermajority spending requirements can lead to havoc.
Arizona, which was hogtied by such a provision, was forced to raise money by selling its state capitol and state Supreme Court building, and other states with spending caps have seen the unintended consequence of their bond ratings fall, and their interest costs rise. …
Such possibilities hardly seem worth the risk in New Hampshire — all for the sake of a notion that taxes are the only thing anyone cares about, and in the fear that future legislators for some reason won’t have the wherewithal to prudently look out for the state, its people and their businesses.
Lawmakers in Concord are meeting to hammer out differences between House and Senate versions of a proposed constitutional amendment that would restrict the state’s ability to respond to challenging economic conditions.
One proposal would require a supermajority vote in both legislative chambers to approve revenue increases, the other would limit spending unless a similar supermajority voted to waive the cap.
Jeff McLynch, executive director of the New Hampshire Fiscal Policy Institute, warns that tax and spending caps hurt communities and force destructive cuts. He points to the city of Dover, which passed a tax cap that restricted its ability to raise revenue, as a case study in what can go wrong.
Last week, the city learned that its bond rating was downgraded by Moody’s Investor Services. The result is that plans to refinance the city’s debt will cost it — and its taxpayers — an additional $50,000 in interest payments.
Moody’s based its decision on its expectation that “reserves will not improve significantly over the near-term given a combination of the city’s revenue-constraining local tax levy cap, slower economic growth and rising fixed cost pressure related to pensions and other post-employment benefits.”
As a result of the tax cap, the city also is looking at potential cuts to its proposed school budget of $870,000. If voters don’t override the tax cap, parents now fear their children will not get the same quality education of generations past.
McLynch points out that New Hampshire “navigated this turbulent recession more successfully than many other states.” The legislature “would do well to learn from the difficulties Dover now faces,” he says, as it considers a constitutional amendment that would put state finances under similar constraints.
Last spring, when the GOP House leadership insisted on cutting the state cigarette tax by ten cents a pack, the Department of Revenue Administration estimated the tax cut would cost the state $14 million in revenue if sales were consistent with the previous year.
House Speaker Bill O’Brien, however, argued the tax cut would actually increase state revenue:
“This tax cut is an important step to regain our advantage and bring business here to New Hampshire. We strongly believe that reducing this tax will result in more revenue, more economic growth and more tax cuts.”
Kevin Landrigan reports state officials now project that the cut will result in a revenue shortfall of — surprise, surprise — $12-$15 million for the year.
[Administrative Services Commissioner Linda Hodgdon] confirmed that through nine months the tax is $11 million off forecast, and $9 million of that is attributed to the tax break.
State officials can now accurately compare pack sales through this nine-month period to the previous three quarters last year when the tax was higher.
At this rate the tax cut could cost the treasury at least $12 million and as much as $15 million for the year.
When Treasury Secretary Tim Geithner testified before the Senate Budget Committee, New Hampshire Sen. Kelly Ayotte was vocal in her criticism of the administration for not embracing the Bowles-Simpson deficit reduction recommendations — until she was asked about the report’s proposals for raising revenue.
Geithner was responding to questions by Sen. Kelly Ayotte (R-N.H.), and at one point turned the tables on her. He asked Ayotte if, given her “affection” for Bowles-Simpson, she would support its tax reform that raised trillions in revenue for deficit reduction.
“Are you willing to embrace the broad balance of Bowles-Simpson? Then there is a lot to talk about,” he said.
Ayotte would only say that it is up to the president to take the lead on the budget.