{"id":457,"date":"2009-01-02T15:26:17","date_gmt":"2009-01-02T19:26:17","guid":{"rendered":"http:\/\/www.cnht.org\/news\/?p=457"},"modified":"2009-01-02T15:26:17","modified_gmt":"2009-01-02T19:26:17","slug":"businesses-fear-possible-tax-hikes-in-%e2%80%9909-legislative-session","status":"publish","type":"post","link":"https:\/\/www.cnht.org\/news\/2009\/01\/02\/businesses-fear-possible-tax-hikes-in-%e2%80%9909-legislative-session\/","title":{"rendered":"Businesses fear possible tax hikes in \u201909 legislative session"},"content":{"rendered":"

January 2, 2009
\nNH Business Review<\/a><\/p>\n

David Juvet, senior vice president of the Business and Industry Association of New Hampshire, best summed up the stance of many business groups awaiting the start of the 2009 legislative session: \u201cFirst, do no harm.\u201d<\/p>\n

While the economy is at the forefront of businesspeople\u2019s minds, the state of the state budget can\u2019t be too far behind. With a budget deficit of $250 million and growing \u2013 the hands of business groups around the state are placed in a firmly protective position over their wallets. \u201cFrankly, we are playing defense this year,\u201d said Juvet. \u201cWe are in a severe recession, and it\u2019s never been tougher for business.\u201d<\/p>\n

Let the record show that nobody has proposed increasing business taxes \u2013 the business profits or business enterprise tax \u2014 or taxes that would affect business, like the rooms and meals tax. But that isn\u2019t making business groups breathe any easier.<\/p>\n

\u201cI don\u2019t think anyone wants that as a first option, but after all the various plans go down, and it\u2019s the 11th hour and the 59th minute, it will be the last thing standing, so everybody will hold their noses and vote for it,\u201d said Juvet.<\/p>\n

Would lawmakers even dare raise taxes in this economic climate? N.H. Sen. Lou D\u2019Allesandro, who chairs the Senate Finance Committee, thinks that they can\u2019t. If his favorite revenue source \u2013 increased gambling \u2013 doesn\u2019t pass, the state will just have to cut into the bone of the budget, he said.<\/p>\n

While he does support a gas tax hike to alleviate the highway fund, he opposes any tax increase for the general operating budget.<\/p>\n

\u201cWe are not going to increase revenue,\u201d he said. \u201cIt will be more than belt-tightening. This is much worse than people realize.\u201d<\/p>\n

But House Finance Committee Chair Marjorie Smith \u2013 while also pledging to find major ways to cut the budget, particularly in corrections and health care \u2014 takes nearly an opposite position. Given the current state of the economy, gambling isn\u2019t a reliable way to raise money, she said, and the recent bankruptcy filing of the Hinsdale race track seem to underline her point.<\/p>\n

Still, she said, the state won\u2019t be able to balance its budget through belt-tightening alone.<\/p>\n

\u201cWe are going to have to look at everything (in terms of cutting spending),\u201d she said. \u201cBut no matter how hard we look, we are going to need additional revenue.\u201d<\/p>\n

The budget and the economy is such a big issue, even health care \u2014 always near the top of the agenda for businesses \u2014 has been relegated to the back burner.<\/p>\n

\u201cIt is all going to be budget, all going to be money,\u201d said Bob Nash, president of Independent Insurance Agents and Brokers of New Hampshire.<\/p>\n

But while the budget battle looms large, it won\u2019t be all-encompassing. There will be more debate over issues closely related to the budget, such as reforming the retirement system and providing school funding, with an obligatory stab at another constitutional amendment targeting educational aid.<\/p>\n

Some proposals will be watched by retailers (fighting organized theft and the sale of liquor in grocery stories), utilities (the Regional Greenhouse Gas Initiative and expansion of electric transmission lines), contractors (wetlands regulation and new requirements on developers and home improvement contractor regulations), landlords (possible increases in lead, radon and mold regulation and tenants doing their own weatherization), health-care practitioners (medical malpractice reform) and just about anyone who hires workers (family leave, unemployment and workers\u2019 compensation legislation).<\/p>\n

For a list of titles of bills affecting business, their sponsors and further explanation of them, visit nhbr.com.<\/p>\n

Gas tax increase?<\/p>\n

Meanwhile, here is a look at two promising \u2013 if that\u2019s the word \u2014 tax increases that might be coming your way.<\/p>\n

The gas tax seems the exception to the rule these days \u2014 an acceptable form of revenue, now that the price of gas has tumbled from $4 a gallon to $1.50. With the highway fund so depleted, the 10-year highway plan stretched into the next generation and some 150 state bridges on the red list, the consensus is that there is no alternative but to raise the tax. <\/p>\n

Yet the expected big-ticket federal stimulus package might call into the question that consensus. The Department of Transportation showed a draft $200 million wish list of road projects that are \u201cshovel ready\u201d and another $300 million for commuter rail, a near requirement to be part of the mix in an energy-conscious Obama presidency.<\/p>\n

The road projects represent a year of federal grants. But what would be the state match requirements? If a state match is required, it might give more impetus for a gas tax. On the other hand, if the state match requirements are diminished, the federal aid might substitute for raising the tax.<\/p>\n

Finally, a sharp spurt upward in gas prices might make taxing gasoline politically unfeasible.<\/p>\n

How much the 18-cent-a-gallon tax should be increased is anybody\u2019s guess. David Campbell, D-Merrimack, vice chair of the House Public Works and Transportation Committee would like to nearly double it over three years, adding a nickel a year, bringing it up to the 30-cent-per-gallon national average.<\/p>\n

\u201cIf we don\u2019t raise the gas tax, we would have to make cuts, the towns would lose road aid, and the property tax will go up,\u201d said Campbell. <\/p>\n

Rep. Gene Anderson, R-Lebanon, has a different idea: tie the increase to the consumer price index. Once upon a time it made sense to keep the gas tax constant. As people drove more, revenue increased. But people have been driving less, and road and bridge maintenance costs have less to do with driver wear and tear than with the ravages of weather, salt and inflation.<\/p>\n

Anderson\u2019s proposal won\u2019t mean much revenue in the short run. In the last few months the CPI has gone down, not up. In a separate bill, Anderson would also like to see some of the money going to alternative \u201chighway-related transit systems,\u201d like buses and park and ride.<\/p>\n

This raises another debate. The gas tax can\u2019t be used for rail, according to state Supreme Court ruling, but what about the money from the stimulus package? <\/p>\n

The DOT\u2019s inclusion of $300 million for a Manchester-to-Nashua commuter rail line is a windfall rail advocates could only dream of last year. But several key lawmakers said that if New Hampshire had any choice in the matter, it should spend all of the stimulus money on roads.<\/p>\n

\u201cThe bridges just have to be done. Rail, it can\u2019t pay for itself,\u201d said Rep. Gene Chandler, R-Bartlett, a former speaker who once chaired the Public Works Committee.<\/p>\n

\u201cIt (rail) is what we need to do in the long term, but I don\u2019t see that as an immediate priority,\u201d said Sen. Harold Janeway, D-Webster, who chairs the Senate Capital Budget Committee. \u201cIf the money was available only for that, I wouldn\u2019t turn up my nose at it though.\u201d<\/p>\n

Revenue might also come from an ODD source, the Oil Discharge and Disposal cleanup fund, a small tax imposed on fuel distributors now earmarked for cleaning up underground storage tanks.<\/p>\n

Last year the House passed a fraction of a penny increase to shore up the depleted fund, only to have the measured killed as prices rose last spring.<\/p>\n

But now Public Works Committee Chair Candace Bouchard is wondering if the state should continue to support the fund at all. The DES has already required that most gas stations upgrade their underground tanks with doubled-lined ones that presumably won\u2019t leak. And she added that most service stations are corporately owned by their suppliers, so instead of a fund to help the little guy, \u201care we just subsidizing big oil?\u201d<\/p>\n

She has a bill in on the subject, which would either do away the surcharge or divert the money to the general fund.<\/p>\n

Beer tax next?<\/p>\n

In the past, the state has used the cigarette tax as its go-go revenue source. Last year, lawmakers upped it a quarter if revenues didn\u2019t reach $50 million by a certain date, which they didn\u2019t. Merchants had barely forked that money over on Dec. 15 when new hikes were being considered.<\/p>\n

Next session, it may be the beer tax\u2019s turn in the spotlight. Rep. Jessie Osborne, D-Concord, is proposing a 10-cent increase in the tax, to 40 cents a gallon.<\/p>\n

Osborne also is a sponsor of an income tax proposal, long confined to purgatory by both parties. Osborne\u2019s income tax has some larger personal exemptions and a homestead exemption on the statewide property tax, so that those earning under $40,000 with a home worth less than $200,000 would pay nothing. It also would include an 8 percent cap on any tax increase, special exemptions for business, elimination of the interest and dividends tax and the business enterprise tax and a one-percent decrease in the business profits tax. <\/p>\n

However when Osborne gets calls from lobbyists, it\u2019s about her beer tax. The dime, said, would go to substance abuse programs, now in danger of severe cutbacks. That translates into only a couple of pennies a bottle, she emphasized.<\/p>\n

\u201cWe are in the business of alcohol, so we should be taking care of people addicted or to prevent them from getting there,\u201d said Osborn. The costs, she said, aren\u2019t just social. \u201cOur county jails are flooded with people due to substance abuse and it\u2019s busting the county budgets.\u201d<\/p>\n

Some lobbyists have whispered veiled threats that a beer tax would cause InBev, the recent Belgian buyer of Anheuser-Busch, to shut down its Merrimack plant, or at least reduce its workforce, in retaliation. <\/p>\n

Osborne doubts whether a tax increase in a small state would result in such an action \u2013 and, besides, \u201ca foreign company has no business telling us how to raise money.\u201d<\/p>\n

A more public objection is the effect such a tax increase would have on convenience stores along the state borders.<\/p>\n

\u201cIf you\u2019re raising taxes in this economy, you are going to hurt cross-border sales even more,\u201d said John Dumais, president of the New Hampshire Grocers Association. <\/p>\n

Dumais has an alternative revenue-raiser up his sleeve. His organization is lining up behind State Liquor Commission Chairman Mark Bodi\u2019s plan to sell sprits at supermarkets and convenience stores.<\/p>\n

Nearly half of state liquor store sales are from out-of-state consumers, but the stores aren\u2019t open evenings and never on Sunday.<\/p>\n

\u201cIf you are busy, and you can\u2019t get any spirits by 5 p.m. on Saturday night, you are still dry for the rest of the weekend,\u201d said Dumais. \u201cIt\u2019s a missed opportunity to satisfy the cross-border customer.\u201d<\/p>\n

The plan is to treat sprits like wine. Instead of being taxed at the distribution level, the state buys them and marks them up. The state would sell them to the stores at a lower mark-up, so that grocery stores would be able to make a margin. But all those details have to be worked out in legislation, as would limits on the quantity or variety.<\/p>\n

\u201cWe don\u2019t want to split the baby and kill the incentive,\u201d said Dumais.<\/p>\n","protected":false},"excerpt":{"rendered":"

January 2, 2009 NH Business Review David Juvet, senior vice president of the Business and Industry Association of New Hampshire, best summed up the stance of many business groups awaiting the start of the 2009 legislative session: \u201cFirst, do no harm.\u201d While the economy is at the forefront of businesspeople\u2019s minds, the state of the […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"categories":[3,50],"tags":[],"class_list":["post-457","post","type-post","status-publish","format-standard","hentry","category-articles-nh","category-taxes"],"_links":{"self":[{"href":"https:\/\/www.cnht.org\/news\/wp-json\/wp\/v2\/posts\/457","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.cnht.org\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.cnht.org\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.cnht.org\/news\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.cnht.org\/news\/wp-json\/wp\/v2\/comments?post=457"}],"version-history":[{"count":0,"href":"https:\/\/www.cnht.org\/news\/wp-json\/wp\/v2\/posts\/457\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.cnht.org\/news\/wp-json\/wp\/v2\/media?parent=457"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.cnht.org\/news\/wp-json\/wp\/v2\/categories?post=457"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.cnht.org\/news\/wp-json\/wp\/v2\/tags?post=457"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}