Why do we elect people who fleece us?

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O P I N I O N

THE SOAPBOX

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Stand up. Speak up. It’s your turn.


It’s budget season at the State House as well as in towns. And the folks at the State House are jubilant that their budget is overflowing with federal monies. Local towns? Not so much.

Last week, in NH House Ways & Means, a representative testified that NH recovered from recession faster than other states. What he didn’t mention was why it recovered. Because the legislature retained $1 billion in funding over the past decade that should have gone to towns.

Why do property taxpayers and residents who pay property taxes in their skyrocketing rents put up with this?

EVERYONE CUT DURING THE RECESSION….

Recession put the state in a bind in 2011. They cut the 35 percent share of town pensions paid for four decades. Back then, the state wanted to consolidate pension systems for better pricing. They convinced municipalities to bring educators and municipal workers into the fold by promising 40 percent cost sharing. A few years later, the state cut that to 35 percent. Then came the recession. Despite massive layoffs and business closings, towns had to suck up the loss as best they could. Towns cut to the bone. Property taxpayers picked up the rest. And have done so more each year as the state cut other taxes. As shown below, local property taxes in 2022 accounted for 52 percent of state and local revenues.

But Manchester and its property taxpayers were never made whole.

Since then, the state claims it not only recovered. It has done so well, the governor and colleagues want to cut taxes even more. The Department of Revenue claims NH has over $400 million in excess revenues. Actually, that is $600 million less than what it should have been paying towns over the last decade, not including interest.

HOW DO THEY JUSTIFY IT?

How do legislators justify retaining $1 billion in pension expenses? At Finance hearings last week, I heard:

  •  PATERNALISM: “Town officials cannot be trusted to give the money back to property taxpayers. Hence, the state need not pay it.” Suppose towns refused property tax exemptions to seniors because “they might use the money for liquor?” Is holier-than-thou oversight appropriate at any level?
  • ARROGANCE: Some reps described themselves as wise fiscal stewards, unlike town officials. Apparently, voters’ judgment improves dramatically between local Spring and state Fall elections.
  • CHERRY-PICKED ENFORCEMENT: “The legislature cannot make promises that last more than one biennium.” This from legislators who voted to pay for students through high school even if vouchers are repealed.
  • TOWNS & PROPERTY TAXPAYERS COME LAST: “Pensioners are paying a larger share so the state shouldn’t have to pay its share.” Why should state interests take priority over property taxpayers’?

BUT ISN’T THE STATE CUTTING TAXES?

Perhaps NH citizens hear the mantra of “tax cuts” so often, they assume the cuts are for them? In actuality, the state has given five tax cuts to Business Profits Tax. The BPT is paid by a quarter of firms, most by out-of-state multinationals. Most NH businesses pay far more in property tax. BPT cuts do not help them.

Meanwhile, the state is cutting the Interest & Dividends tax. The pie chart below compares the average wealth of three groups. The poorest half of NH residents can pay for a 20-piece McNuggets with the same percent of wealth the top 10% would use for a Bahamas vacation for two. The governor and his party want to cut taxes for the Bahama vacationers, but not for the remaining 90 percent.Property Tax v State Tax NH 2022 e1675738931425


NH Revenue Administration says that reinstating the I&D tax would bring in over $113 million next year. This would pay for about 32 percent of pension sharing. The majority party intends to cut the I&D instead. The most they’ll consider to help towns is $26 million (HB 50). Even that bill’s fate is uncertain.

TOWN TAXPAYERS NEED TO PUT AWAY THE BEGGING BOWL

Ways & Means should not be recommending yet more tax cuts for those who need them least. Instead, keep those revenues. Send them back to municipalities where they belong. There may be a better vehicle to return money to towns than pension sharing. Further research might show more benefit from paying down the unpaid pension balance or lowering the Statewide Educational Property Tax. Regardless, towns and property taxpayers need to put away their begging bowls, accepting one-time 7.5 percent at the legislature’s whim. It’s time to demand back the full 35 percent they and property taxpayers should have been getting every one of the last ten years.

PAY ATTENTION TO THE “P”-WORD, NOT THE “I”-WORD

Why do people elect officials who fleece them? Maybe because candidates pull out “My opposition voted for an income tax” signs every election. Even against opponents who’ve never held office before! Maybe people don’t realize that Democratic candidates are so cowed by this claim, they’d sooner step on the flag than mention the “I” word. Meanwhile, Republican actions raise property taxes almost every year.

ENOUGH!

Next Spring, every town in the state should have a warrant article demanding the state reinstate proper cost-sharing with towns. And in the Fall, voters should show candidates what they think of legislators who don’t. We balanced a decade of state budgets through a $1 billion downshift onto towns. It’s time it stopped.


Beg to differ? Agree to disagree? Your thoughtful commentary on topics of general interest are welcome. Send submissions for consideration to publisher@manchesterinklink.com, subject line: The Soapbox.


 

About this Author

Jeanne Dietsch

Jeanne Dietsch is a former NH Senator. She founded MobileRobots Inc, now Omron, in Amherst. She served on the Peterborough Economic Development Council for a decade. She now runs non-profit Granite State Matters.