New Hampshire is doing better than many states in this anemic recovery from recession. But few would claim the state’s economy is in robust health.
That makes proposals from Gov. Maggie Hassan to increase many consumption taxes particularly troubling. People are struggling to make ends meet. State government should not make those struggles more difficult.
A superficial look at the numbers makes New Hampshire’s economy seem strong. The unemployment rate for March was just 5.7 percent, down 0.1 percentage points from 5.8 in February and well below the national average of 7.6 percent.
But while the national rate has dropped year-to-year from 8.2 percent in March 2012, New Hampshire’s rate is increasing. A year ago, the unemployment rate was lower — 5.3 percent. This is not a welcome trend.
Another unemployment statistic paints a less rosy picture. The “U-6” unemployment rate includes not only the unemployed but also those working less than they would like — such as those who have taken part-time jobs while looking for full-time positions in their chosen fields. The U-6 rate for New Hampshire is 11.2 percent.
That means money is tight for a significant portion of New Hampshire’s population. And there are ever greater demands on that limited income. Food and energy costs are rising; health care expenses are increasing faster still. Gasoline prices have stabilized at what appears to be a “new normal” around $3.50 per gallon — a level that would have been deemed outrageous just a few years ago.
Now comes Gov. Hassan with her plan to balance the state budget through tax hikes — just as her counterpart in Massachusetts has proposed.
The Democratic-controlled New Hampshire House has been supportive; the Republican Senate, less so.
A Senate committee last week rejected a House-passed plan to increase the cigarette tax by 20 cents per pack. State Sen. Jim Rausch, R-Derry, was among those opposing the tax on a party-line vote in the Senate Ways and Means Committee.
“I didn’t think that was appropriate,” Rausch told reporter John Toole.
Also pending are votes on an increase in taxes on gasoline and diesel fuel, which would be phased in over a number of years, and a tax hike on home heating oil.
“My constituents are saying we can’t afford more taxes,” state Sen. Russell Prescott, R-Kingston, said. “I’m going to make every effort not to raise taxes.”
Prescott said he has not yet determined how he’ll vote on these proposals.
These tax increases, taken individually, are not large — 12 cents per gallon on the gas tax, one-quarter of a cent on the heating oil tax. But call it the “cup of coffee syndrome.”
Proponents like to pitch these increases as a providing great benefits while costing taxpayers “less than a cup of coffee” a day, or some similar analogy. These lawmakers neglect to take into account that taxpayers already are providing a great many “cups of coffee” each day through the taxes they pay. One more cup, in some cases, may be one too many.
New Hampshire taxpayers are struggling in an economy that itself is barely limping along. This is no time to whack hard-pressed citizens with tax increases.