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The New Hampshire House of Representatives is set to debate SB 489 "AN ACT relative to table gaming and video lottery at certain locations throughout the state and relative to the recovery of horse racing."
This comes amidst a severe budgetary crisis, brought to us by the Bush economic collapse of 2007. State services have been cut to the bone, and more cuts will be necessary. These will, as always, affect those least able to cope, the ill, disabled, young children and the elderly.
New sources of revenue are difficult to come by. Is expanding gambling the answer?
(The tea party people, undoubtedly almost all of whom do not belong to the richest one percent, appear unconcerned with this.)
In New Hampshire, House Bill 642 (h/t NHFlatlander) would have addressed this gross inequity in the way we fund our state by reducing taxes for the bottom 80% of earners and raising taxes for the top 20% (1.7% or less in all income groups). It would have repealed a number of business taxes. It also would have added half a billion dollars to our state for education and other services.
Here's a clear visual example, using a graph of what we have now, and one of how HB642 would've modified it (NB: the data for each is one year apart:'07 and '08, respectively):
Perhaps because the bill accomplished this tax reduction for so many, while doing so much to balance our budget, by means of an income tax, (and therefore contrary to the "pledge" politics), HB642, with bipartisan sponsorship, was deemed "inexpedient to legislate" by the Ways and Means Committee of our Democratically controlled state house.
This visual bomb of the dysfunction of our state revenue system brought to you via this study (.pdf) (h/t here).
The bottom 20% of earners in New Hampshire give 8.3% of their income to the state.The top 1% of earners gives 2.0%.
This is the definition of a regressive taxation system. Dude, where's my tea party protest?
Adding: In Vermont, by way of a regional example, the bottom 20% and top 1% of earners both give a little over 8 cents of every dollar earned to the state (8.2% & 8.4%, respectively).
June may be flowers and sunshine outside, but inside the State House it's ugly. It's the perennial dance of obstinance, righteousness, anger, and frustration. Ratchet it up many notches: welcome to the 2010-11 budget process .
When I was in the senate, there were dire warnings of a perhaps $200 million shortfall. Now we're talking $500-600 million.
What's a state government to do? Well, of course, more of the same, only worse.
Raise taxes we now have, such as rooms and meals tax from 8 to 8.75 percent? That burdens the hospitality industry, so vital to NH's identity and strength.
Wipe out the business enterprise tax credit? Small businesses can least afford it in this historic recession.
Then there's the idea to hike the cigarette tax another 35 to 45 cents a pack. True, it discourages smoking and taxes what we don't want, which is good. But it also whacks those least able to pay.
Then there's the ingenious idea of broadening the real estate transfer tax to include those refinancing their homes to cut their monthly payments. Once again, hitting those already burdened, those who are doing all they can to reduce their family's debt.
Then there's the perennial Lou D'Allesandro Special: expanded gambling. In a big change from his past efforts, this year the senate approved it (at midnight, with no public hearing).
Thirteen thousand slot machines, creating a new behemoth of an industry, eclipsing all other business interests. which would clearly have the ability, and motivation, to manipulate and dominate New Hampshire politics. The revenue estimates of $185 million are highly suspect. This whole column could specify ways in which the costs to NH greatly outweigh any promised benefits, but I'll spare you.
Some fee-raising ideas in both the House and Senate proposed budgets are indeed benign: raising the automobile license fee from 50 to $60, and car registration from 10 to $25. That $31m is targeted to much needed bridge and road repair. Rasing the permit for out of staters to carry a concealed weapon from $20 to $100 raises $1.7 million. Cutting the budget for charter schools which generally cost more than public schools and as Lou D'Allesandro points out, "These students all have a place in a public school."
Clearly each of these options carries pain. One factor that is constant is that each and every budget cycle somehow finds a one-time pot of gold it can ransack. This year, it's $100 million from a 30 year old account to help make malpractice insurance affordable. But even that option is likely to face a successful lawsuit.
Many of these ideas would almost certainly exascerbate the state's reeling private sector economy.
Needs continue to mount: schools are in need of repair, our population is older than most states, the call for social services rises as the recession drags on. In both the House and Senate verisons cuts will hurt more than people expect.
Republicans call for an 8 percent spending cut across all areas of state government. That's not only callous, it's just plain crazy. The agencies that deliver needed services do amazingly well given the little they get now.
There is one constant in all this: the tradition of just tweaking here and there, sweeping the revenue problem under the rug year after year after year by resorting to increased fees, truly nickel and diming us into harder times for all. I hate to publicly agree with a Republican, but Senator Gatsas is right:: "Downshifting is not something that local communities can afford, (this budget leaves) no other place to go other than the property tax."
How long will it take until that bump from sweeping our problems under the rug gets so big NH trips and falls? the tipping point is fast approaching.
Conventional wisdom is that Lynch's first victory was a referendum on the income That is not fully accurate; there were personalities which weighed heavily into the outcome.
New Hampshire's wealthiest have had a long, very easy ride on the backs of all other taxpayers.
The more time we avoid the inevitable: simple tax fairness, the more pain we will have chosen to inflict on ourselves.
