The BIA’s legislative wish list
What the organization hopes to see emerge from the session
There is a lot to like about Governor Sununu’s proposed $12.1 billion budget, particularly his goal to create a fiscal and regulatory environment that promises greater job growth, job retention, workforce development and economic opportunity for all.
The governor’s budget preserves the modest reductions in business profits tax and business enterprise tax rates established in the last budget. His budget is also balanced without a sales or income tax and without any new fees. This is all very good. Nevertheless, BIA has some recommendations to make it even better.
New Hampshire’s business tax rates will remain among the highest in the country, even after the modest reductions noted above. And while New Hampshire was working to lower its business taxes, so were many states around the country. Our rates need to go lower.
BIA is aware of several bills circulating at the State House to enact further business tax reductions, and we support them. As New Hampshire’s economic engine continues to build steam, the time is right for continued reductions in business taxes.
We’re also asking House and Senate budget writers to remove the $7 million cap on the research and development tax credit. Since 2008, an overall cap has been written into the law limiting the total dollar amount the state will distribute in credits. Not only does this result in smaller tax credits than companies are eligible for, but it also delays receiving the credits for a year or more while the Department of Revenue Administration totals all R&D credit requests up to the $7 million cap, then distributes them pro rata.
Eliminating the cap will send the message that New Hampshire encourages innovation. Removing the cap will result in new product innovations and prototypes, technological advances, more high-margin manufacturing, and most importantly, high-paying jobs in the state’s manufacturing and technology sectors.
BIA is also encouraging House and Senate budget writers to adequately fund Medicaid reimbursements to health care providers. For far too long, the state has reimbursed hospitals and other care providers at rates far less than cost (50 cents or less on the dollar). When health care providers are not sufficiently reimbursed for the costs they incur, a “cost-shift” to businesses occurs, driving up health insurance prices. Providing higher Medicaid reimbursements to providers will put downward pressure health insurance premiums paid by businesses and employees alike.
Governor Sununu’s proposed budget provides a much-needed boost to the community college system, increasing the appropriation by $6 million over the biennium. Even so, the increase is less than what was requested. It allows the community college system to meet salary and benefit increases agreed to by collective bargaining, but comes up short of enabling the system to fully implement new STEM initiatives and avoid tuition increases.
The governor’s budget plan was less kind to the university system, leaving its funding essentially flat. Absent the increase the university system requested, freezing in-state tuition and developing the kind of graduates required for 21st century occupations may be in jeopardy.
There are still several months and numerous budget iterations to go before the budget is signed into law. Between now and then, revenue projections may change. Spending priorities may change. What will not change is the need for a state budget that reinforces BIA’s mission: to promote a healthy climate for job creation and a strong New Hampshire economy.
Linda Fanaras, president of Millennium Integrated Marketing, Manchester, is chair-elect of the board of the Business & Industry Association of New Hampshire.