What is the NH Advantage? Do we still have it?
In the 1970s and the 1980s, New Hampshire’s economy grew at a very fast pace. This can be seen in both the number of jobs and the amount paid in wages and salaries. The economy grew much faster than Massachusetts’ economy. Many businesses moved to New Hampshire and New Hampshire was seen as a much better place to come and start a business.
We had what was called the New Hampshire Advantage.
This trend slowed down in the 1990s and 2000s, and now, in the period from 2010 to now, Massachusetts’ economy is growing faster than ours.
These two charts show this:
|Growth in Number of Jobs|
|2010 – May 2015||5%||9%|
|Source: U.S. Bureau of Labor Statistics|
|Growth in Wages & Salaries Paid|
|2010 – May 2015||23%||25%|
|Source: U.S. Bureau of Economic Analysis|
The New Hampshire Advantage is no more. The NH Tax Shift Plan will help to bring it back.
If New Hampshire raises 67% of its money through the property tax, how does it raise the other 33%?
This chart shows how New Hampshire raised money for state and local government in 2014.
|Interest and Dividends Tax||$79,811||1.43%|
|Real Estate Transfer Tax||$100,783||1.81%|
|Business Enterprise Tax||$219,480||3.93%|
|Meals and Rooms Tax||$261,730||4.69%|
|Business Profits Tax||$330,149||5.92%|
|State & Local Property Taxes||$3,762,922||67.45%|
( Other Revenues: Charitable Gaming; Estate and Legacy Tax; Utilities Tax; Beer Tax; Court Fines and Fees; Securities Revenue; Corporate Returns; Interstate Vehicle Registrations; Corporate Filing Fees; Interest on Surplus Funds; Reimbursement of Indirect Costs; Miscellaneous)
What is the Rainy Day Fund?
This fund (officially known as the Revenue Stabilization Reserve Account RSA 9:13-e) was established in 1986 as a place for the state to put some money away for bad times. If it ever looks as if the state will end a fiscal year with a deficit, the money in this fund can be used to fix that.
At the end of every fiscal year the legislature decides what to do with the surplus. One option is to put it in the Rainy Day Fund. Another option is to put the money towards the next year’s budget.
The Rainy Day Fund has gotten very low. The NH Tax Shift Plan would remedy that.