BPT, BET cuts are a time bomb for taxpayers
The state and business community should shift priorities to attracting talent to New Hampshire
Most people don’t know that a time bomb has been set for Jan 1, 2019. The last Legislature scheduled a third business tax cut for that day. Like the two before it, the cut is trivial for companies. Yet it will slash state revenues by $63 million per year.
For comparison, we just received a federal grant of $21 million per year to fight opioid abuse. The 2019 cut will remove three times the amount we’ve gained. The business tax cuts of 2015 and 2017 already took a $30 million bite out of state revenues.
Some will say that these trivial cuts create jobs and increase business. Some even claim that these minuscule cuts caused our current business boom, a boom actually fueled by $1 trillion in federal borrowing, massive federal tax cuts and repatriation of profits.
In reality, individual businesses gained little or nothing from the cuts. 2015 and 2017 cuts only applied to a quarter of the most profitable businesses in the state. These already-thriving companies saved enough to hire one temp worker for one day. The approaching 2019 cuts affect more businesses, but are still tiny. A typical company with four employees might save enough to give them Christmas dinner.
Claiming these three tiny tax cuts caused a business boom is like claiming three raindrops caused a flood.
The fact is, much of our economy is driven by macro effects, beyond the individual decisions of businesses. When politicians take credit for things beyond their control, we need to call them out. We need to help the public understand the reality beyond the sound bites. The state has been shifting costs onto towns since 2011. They used to pay 30 percent of municipal and teacher pensions; now they pay zero. They used to share 40 percent of meals and rooms taxes with towns; now they share 21 percent.
Why? Legislators continue to give frivolous cuts to business. They continue to let gas tax revenues fall. They dropped altogether the telecommunications tax.
These fiscally irresponsible moves left citizens in the lurch (quite literally, in the case of potholes). Local taxpayers have to pick up the pieces. Local businesses have to get by with fewer employees, since property taxes drive cost-of-living beyond what their workers can afford. Property taxes, as we all know, affect businesses, too.
It is time the business community called out these tiny tax cuts for what they are: political posturing. Let’s stop playing games. Let’s focus on what we need to attract talent: good schools, affordable tuition, pervasive broadband and a match between wages and cost-of-living.
Jeanne Dietsch, founder of MobileRobots Inc. in Amherst, is the newly elected Democratic state senator from District 9.