EagleTribune.com, North Andover, MA

April 7, 2011

NH is the envy of New England

By Doug Ireland
direland@eagletribune.com

Five of New England's six states have one thing in common: They want to be more like New Hampshire.

That's the conclusion of a study being released today by the New England Public Policy Center.

"How Does New Hampshire Do It?" analyzes the state's spending and revenue structure, concluding New Hampshire's lack of broad-based taxes and low spending on public services makes it the envy of other states.

The state's fiscal climate is often regarded as a model, especially by public policy-makers who wonder how it operates under such an approach, according to policy analyst Jennifer Weiner, the study's principal author.

"There really isn't a simple answer," she said. "The state doesn't spend the lowest in every single category, but it does spend among the lowest."

But many in New Hampshire contend the state should spend more on social services, especially after the House of Representatives voted last week to approve a $10.2 billion budget that slashes spending for numerous programs.

The report was finalized before thousands protested the cuts on the Statehouse lawn.

Weiner said New Hampshire's extremely low poverty rate is the main reason why it can survive, unlike other states, without adopting a sales or income tax.

"I don't want to give the impression there are no poor people in New Hampshire," she said. "There certainly are. ... When you look at the data, New Hampshire is one of the higher-income states."

The state spends a lot less than most states on public welfare.

New Hampshire spent $6,442 per person in fiscal 2007, compared to the New England average of $8,064. That includes spending on education, social services, transportation, public safety, government administration, and environmental and housing programs.

The state's overall tax structure — without a broad-based tax — is the envy of other states, Weiner said.

New Hampshire doesn't have a sales or income tax. But it collects enough, through property and business taxes, to get the job done.

Granite State policy-makers and analysts said they weren't surprised to hear the state is the envy of New England.

That includes Gov. John Lynch.

"Gov. Lynch has said he would veto a sales or income tax, and this report shows New Hampshire knows how to operate without those taxes," spokesman Colin Manning said.

Charles Arlinghaus of the Josiah Bartlett Center for Public Policy said there is no question the Granite State is unique.

"We are different," he said. "It's important to understand that one reason we're different is that every other state adopted an income or sales tax, or both. If you didn't, you wouldn't have the money you could spend."

Economist Dennis Delay of the New Hampshire Center for Public Policy Studies spoke of what many call "The New Hampshire Advantage."

"New Hampshire's overall tax burden is the lowest in New England and one of the lowest in the country," he said.

It all comes down to a state's poverty rate and its spending on public programs, Delay said. It helps that New Hampshire's median income is higher than many other states, he said.

"The incomes are fairly high here and we have the lowest poverty rate in the nation," he said.

As for the current debate over state budget cuts, Delay said New Hampshire is no different than most other states.

"The situation going on in New Hampshire is a national conversation," he said. "It's just that state and local governments are struggling all over the nation."

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