Update (9/28/2012): The Union Leader follows up Wednesday’s article with one today about a report showing that the state’s former economic strength in the region is faltering, and that New Hampshire now needs to address several weaknesses, including “high costs of electricity, health care and housing, high corporate tax rates, lack of spending on transportation and technology infrastructure, and the low investment in higher education.”
Continue reading the original post, from 9/26/2012, below.
According to the Union Leader, the much-touted “New Hampshire Advantage” is waning.
The Union Leader quotes Brian Gottlob, president of PolEcon Research in Dover:
“I think there has been a New Hampshire Advantage, but it is understood only halfway. We have this tax structure that does favor well-educated, skilled entrepreneurs. But the other side of that is what people really want in the advantage — they want value. They want quality services at a lower cost than they would pay elsewhere.”
At least one political party cites New Hampshire’s lack of a sales or income tax as the state’s engine for economic growth, while ignoring the need and demand–in cities like Manchester and across the state–for better roads, commuter rail, better funding for education and other services, property and business tax relief, and so on. But Mr. Gottlob and other panelists at yesterday’s annual Economic Forecast, hosted by the Greater Manchester Chamber of Commerce, make the point that New Hampshire has focused too much on (some) low taxes at the expense of investment.
And the panelists suggest that the state’s exceptionally strong economy since the 1980s has been more a result of the rapid population growth in the 1980s and 90s than tax policy. Now that the population growth is slowing, so too is the “New Hampshire Advantage.”
Community College System of New Hampshire chancellor Ross Gittell, also a panelist, noted that while the state touts its lack of a sales or income tax as the “New Hampshire Advantage,” New Hampshire actually relies heavily on business, corporate and capital gains taxes, which could actually stifle economic growth and job creation in the state.
Cities & Technology Sector Jobs
As Mr. Gottlob said, New Hampshire’s “southern neighbors whose policies we often deride” are growing much faster, in terms of both population and job growth, while New Hampshire is now somewhere in the middle nationally.
The article suggests that Massachusetts and Connecticut are different from New Hampshire, because the larger urban centers–with big universities–attract technology and start-up investment. But as the Boston Globe discussed at length last month, Manchester has its own booming technology and start-up cluster growing in the Millyard.
Those sort of businesses demand a strong infrastructure, and the young people those businesses need to attract as employees want to live in cities with the robust urban amenities–vibrant neighborhoods, bustling downtowns, good parks and schools, alternatives to driving everywhere–that New Hampshire is drastically under-funding. Continue reading Can New Hampshire continue to rely on tax gimmicks?