Avoiding the inevitable
June may be flowers and sunshine outside, but inside the State House it’s ugly. It’s the perennial dance of obstinacy, righteousness, anger and frustration. Ratchet it up many notches and 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 million-600 million. What’s a state government to do? Well, of course, more of the same — only worse.
Raise taxes, such as rooms and meals tax from 8 to 8.75 percent? That burdens the hospitality industry, so vital to New Hampshire’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 cents 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.
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 $31 million is targeted to much-needed bridge and road repair. Raising 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.
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 versions, 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 Sen. Ted 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 New Hampshire trips and falls? The tipping point is fast approaching.
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.
State senator from 1990 to 2004, Burt Cohen now hosts a radio talk show. His Web site is www.burtcohen.com.