The Least That Should Happen

But that misses the real fiscal crisis in NH ! (0.00 / 0)

It's not school funding.

It isn't high property taxes.

Collapsing roads and bridges? No.

The judicial system? The prisons? Of course not.

Sen. Ted Gatsas knows where the next dime should go: relief for the investor class.

Gatsas has run the numbers and believes slot machine gaming with state control would generate enough excess revenue that lawmakers could actually cut taxes.

The five-term senator has chosen to propose scaling back half the state's 5 percent tax on interest and dividends. While New Hampshire doesn't advertise it this way, this is an income tax on unearned personal profit from investments.

(BTW, the Interest and Dividends tax is not assessed on retirement accounts such as 401-ks.)

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by: elwood @ Sun Jan 18, 2009 at 11:57:06 AM CST

You missed the real gem, elwood. (4.00 / 1)

"This means someone with $100,000 of investment profits would pay the state $2,500 less," Gatsas said. "This could help a senior afford to pay their property tax bill."

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by: Tim C. @ Sun Jan 18, 2009 at 13:22:16 PM CST

[ Parent ]

Good Thinking... (4.00 / 1)

I like Jessie Osborne, and she's a good thinker.  At the very least I think we need to have the discussion about what she's written -- not just here in www.BlueHampshire.com, but statewide.  Our future tax structure should not have to remain stagnant to what we have today.  Somehow there must be something right about the other 49 states.

I also like the discussion that Andy Peterson and John DeJoie have been generating, especially around the "Homestead Exemption" concept.  

It was in 1973 that I proposed the state's first Homestead Exemption.  The legislation I sponsored called for a $5,000 exemption on a person's primary resident; $10,000 for those aged 65 and over.  In those days, that kind of property tax exemption was significant.  The bill passed and became law.  However, there are constitutional questions with such a concept, and the State Supreme Court ruled the statute unconstitutional.  There may continue to be constitutional problems with any Homestead Exemption plan because of fair and equal taxation standards which legislation has to meet.  In the case of Homestead Exemptions, second homes and business property as well as rentals don't receive the exemption, and "circuit breakers" as described by Jessie Osborne may not meet the equality standards.  

However, we need the dialogue, and it's important that we think about all of this.  The appeal of expanded gambling as a supposed alternative to tax reform is that it's a lot less complicated -- either we allow more gambling, or we don't.  And when people assign high revenue expectations to the state from expanded gambling, it becomes difficult to turn down.  What we need is more review of exactly what additional gambling will mean for New Hampshire before we jump into that raft too.  

In a void, I think most of us would say we are against income taxes, sales taxes, and property taxes in general.  But we need funds to pay for the things government should do, and as Hubert Humphrey long ago reminded us, "the moral test of Government is how that Government treats those who are in the dawn of life, the children; those who are in the twilight of life, the elderly; and those who are in the shadows of life, the sick, the needy and the handicapped."  We in New Hampshire cannot turn our backs on them.  We need that discussion anew.    

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by: Rep. Jim Splaine @ Sun Jan 18, 2009 at 12:08:53 PM CST

New Pledge (4.00 / 1)

No gambling legislation passes until the Executive Branch signals it is willing to have a open discussion about equity in taxation.

Hope > Fear




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by: Mike Hoefer @ Sun Jan 18, 2009 at 13:51:31 PM CST

How is NH taxable income (0.00 / 0)

differentiated from non-NH taxable income and how is tax collection carried out? With the repeal of the interests and dividends tax, would interest and dividends fall under the NH taxable income category, or would we be moving from a system that collects taxes based on the transfer of money to a system which collects taxes based on one's labor? Are there any indications about how much more (or less) this plan would raise than the current tax system?

One item that caught my eye:

When that happens, there is no choice but to raise county and local property taxes, which are already reaching confiscatory levels in most areas of the state.

It's been mentioned off-hand here before, but maybe we should consider eliminating county government (and therefore county property taxes) altogether.  

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by: Alex Gallichon @ Sun Jan 18, 2009 at 15:04:58 PM CST

That doesn't really work - (0.00 / 0)

If you eliminate county government you eliminate the county jail, the county prosecutor, the county sheriff, the county nursing home. All these functions are needed, they would simply move to another jurisdiction (maybe the state, maybe some new district).

It might be more efficient in some places - could Cheshire and Sullivan share services? But it isn't an obvious across-the-board savings.

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by: elwood @ Sun Jan 18, 2009 at 16:03:50 PM CST

[ Parent ]

No, I agree (4.00 / 1)

but it would eliminate county-to-county disparities if these functions were assumed by the state government. I had similar reservations when I first heard the idea, although mostly about the integrity of record keeping in departments like the registry of deeds, but ultimately I don't this would create too big a short-term headache compared with the long-term clarity it would generate over the role of the state.

There would probably be some savings without an extra layer of administration, but in general the county lines have become irrational over time and it's just weird that there might be policy inconsistencies between these lines, which also have independent tax authority, apparently.

Initially I was sympathetic to ideas of relatively more local control that might go along with county government, but it's really a layer of government relatively more distant from the citizen/voter, who then has more or less power over county government depending on which county he lives in, because they don't reflect population at all.  

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by: Alex Gallichon @ Sun Jan 18, 2009 at 17:39:29 PM CST

[ Parent ]

A Frequently Discussed Issue (4.00 / 1)

Abolishing or reforming County Government has been a frequently discussed issue in the NH Legislature -- almost every term a bill is introduced.  It used to be a cause of the good former Senator Peter Burling, one I worked with him on.  I think it is a good idea, at least to restructure County Government so that there are uniform nursing homes, uniform county jails, uniform sheriff's departments, register of deeds, etc. -- all which would cost less and be more efficient, I believe, due to size of scale.  

However, full abolishing of County Government it won't happen, at least not for a long time.  Too many politicians including a number of House members who have important roles in their Counties are very defensive about any change.  It's more likely that we'll reduce the size of the Legislature before we significantly reform County Government, and I don't think that will happen for the balance of this Century, or longer!  But having the dialogue about it is worthwile, because some of the duties of County Government could be done more efficiently by sharing with neighboring Counties -- that might be a reality in these coming days of economic difficulty.

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by: Rep. Jim Splaine @ Sun Jan 18, 2009 at 16:41:44 PM CST

[ Parent ]

I share this impression (0.00 / 0)

Too many politicians including a number of House members who have important roles in their Counties are very defensive about any change.

It bothers me a bit that there is such loyalty to the most opaque level of government we have in New Hampshire. Maybe what bothers me about county government is that it's just not sexy enough for quality news coverage, yet there are politicians who covet power at this level of government despite it's being so far removed from the public's eye.  

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by: Alex Gallichon @ Sun Jan 18, 2009 at 17:56:37 PM CST

[ Parent ]

News Coverage (4.00 / 2)

Cheshire County government has been in the news quite a bit recently because of the controversy over the jail. I don't think it is the publicity that the politicians wanted!

On your point about the loyalty of the state reps to this form of government: My sense is that they feel like that have an actual hand in accomplishing something than they do at the state level.  At the state level they are one of 430 state reps; at the county level they are one of 24 (in Cheshire County)and they have a lot more say in what happens on the county level.

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by: gradysdad @ Mon Jan 19, 2009 at 08:59:18 AM CST

[ Parent ]

Though it has also been a recipe (4.00 / 1)

for gridlock, with the county commissioners and county delegation taking years and years to agree on a common path.

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by: elwood @ Mon Jan 19, 2009 at 10:04:45 AM CST

[ Parent ]

You are right (4.00 / 1)

Maybe in my previous comment I should have used the word "controlling" rather than "accomplishing!"

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by: gradysdad @ Mon Jan 19, 2009 at 10:14:19 AM CST

[ Parent ]

County government would make sense if the counties made sense. (0.00 / 0)

They need to be completely redrawn.

--
@DougLindner

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by: Douglas E. Lindner @ Sun Jan 18, 2009 at 17:00:31 PM CST

[ Parent ]

Shifting of Responsiblity (4.00 / 1)

The biggest problem with County Government is that it is a vehicle by which the state shifts some of the tax burden on the local property taxpayers.  This is usually accomplished by having the County assume a heavier burden in the cost sharing for the nursing home and stay at home elderly. I note that the State Supreme Court recently found in favor of the state against the counties who had challenged this abusive cost shifting.

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by: gradysdad @ Mon Jan 19, 2009 at 08:53:37 AM CST

court ruling.... (4.00 / 1)

I am not certain but I would suspect that the court ruled against the counties simply because the obligations undertaken by the counties had been in effect prior to 1984, when Part 1, Article 28a, the "unfunded mandate" clause in the constitution, was passed. As long as the cost downshifted to the counties falls within the scope of the existing obligation, then it is not considered an unfunded mandate.

What the legislature really has to do is take a more mature approach, reviewing the costs it downshifts, which are not just the nursing home or the jail but such costs as county attorney and staff, the sheriff's office, jail terms over one month, autopsies, & cetera.

A start would be to set a "real" bed rate at the nursing homes which would be an huge improvement in several county budgets such as Coos and Sullivan,and Belknap) and pick up the tab for inmates incarcerated for longer than a month. It never ceased to amaze me over the last decade that the legislature would approach funding - or not funding these costs, really!!! - in the budget in such a Jekyll and Hyde manner. It borders on schizophrenic.

I always liken it to a Marx Bros., Three Stooges or Abbott & Costello routine where everyone is going through a ticket line, pointing over their shoulder with a thumb saying: ".... he's got the ticket, he's got the ticket......"

But, then, this probably would occur regardless of whether or not Jesse's bill were passed. It's a good piece of legislation and is an improved iteration of the Below, Hager, Fernald bill from several years back.  

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by: Jay Phinizy @ Mon Jan 19, 2009 at 17:10:33 PM CST

[ Parent ]