Charles Arlinghaus - A Decent Conservative Political Writer

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The Josiah Bartlett Center For Public Policy
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www.jbartlett.org
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Charles M. Arlinghaus, president
arlinghaus@jbartlett.org
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Charles Arlinghaus: "It's a banana republic in Concord, and not just for the heat"
The NH Union Leader, Op-Ed, Wednesday, Jun. 11, 2008

MIDNIGHT SESSIONS, locking legislators in like prisoners, and a special session created not to allow -- but to stifle -- debate were all on display at the Legislature last week. The casual observer might be forgiven for comparing New Hampshire to a banana republic -- in the banana's favor.

At the end of the legislative session last week, the governor and his allies realized they didn't have enough votes to pass his plan to "fix" the state budget deficit by putting the difference on the state credit card ("bonding it" in legislative terms). So he called a special session on the same day as the regular session. Heated debate kept the session going until midnight and the speaker had the doors locked and forced legislators to stay whether they wanted to or not.

The least unusual aspect is the most ridiculous -- locking legislators in like prisoners. Apparently this is done rarely in recent years, but used to occur with great frequency. The fear is that too many legislators will depart, leaving the House without the quorum necessary to conduct business. If less than two-thirds of the members are present, the constitution requires a two-thirds majority of those remaining to pass anything.

Aside from the apparent violation of the right to liberty by locking anyone in anywhere against his or her will -- not inconsequential in the "Live free or die" state -- absenteeism is a proud New Hampshire tradition. New Hampshire became the ninth and decisive state to ratify the federal Constitution only because some anti-federalist delegates absented themselves and spent the afternoon drinking across the street.

In a free society, legislators should be free to leave even, perhaps especially, as a form of protest. The ability to get up and leave is an extraordinary action but a safeguard against abuse of power. We are told that both parties have practiced this form of imprisonment in the past. However, the fact that one party did something stupid before doesn't make it any more or less acceptable to repeat the abuse.

By the way, this abuse is claimed to be justified because the constitution allows the House to "imprison" anyone "guilty of "disrespect to the House" such as assaulting or threatening members or "obstructing its deliberations." Clever use of the verb imprison, isn't it?

The more egregious problem is the abuse of the power to "Call Extra Sessions." Our constitution gives the governor power to reconvene the Legislature: "to call it together sooner than the time to which it may be adjourned or prorogued, if the welfare of the state should require the same."

Before 1984, the legislative session occurred not every year but every other year. The Legislature was frequently called back into session to deal primarily with amending the two-year budget. The ability of the governor to call extra sessions was created for those circumstances. They were not in session and were not scheduled to be back in session anytime soon, so he called them back.

Since the Legislature changed to annual sessions starting in 1985, there have been almost no special sessions. The one exception was a session to deal with the bankruptcy of the state's largest electric utility which, like the extra sessions of the past, occurred months after the Legislature had gone home.

This one was different. To deal with the state's budget shortfall, the governor had proposed bonding $80 million of operating expenses. The House had quite sensibly rejected borrowing money to solve the budget mess. The governor, to whose popularity most of them owe their election and hoped for re-election, convinced some of them to reconsider, but not quite enough of them.

In regular session, he would need a two-thirds majority to overturn the earlier decision. So he came up with a clever plan. The Legislature would finish its business and have an immediate special session to consider the budget crisis. At the new session, he only needed a majority.

Republican Sen. Ted Gatsas had long ago called for a supplemental budget bill to consider and openly debate possible solutions to the budget crisis -- a revenue shortfall of around $200 million. But the abuse of power session wouldn't allow open debate, so the only thing to be considered was the governor's borrowing scheme with a couple of non-controversial technical amendments tacked on so it could be called a budget "plan."

No open debate, no free exchange of ideas, no hearings. Just one bill considered under a clever plan to bypass House rules.

Nothing illegal and nothing honorable. Isn't democracy grand?

Charles M. Arlinghaus is president of the Josiah Bartlett Center, a free-market think tank in Concord.

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Readers' COMMENTS:

Rick, I'm sure when Republicans were in power they did many stupid things too. And I'm happy to have called them on some of them in the past. Stupid things are no less stupid because both parties do them. Locking the doors seems just plain goofy and would have been back then too. Of course the significantly more egregious problem is the abuse of "extra sessions."
- Charlie, Canterbury

The governor was faced with a choice: Cut back on spending with Gatsas' supplemental budget or force government borrowing. He chose force.

Lynch has lost the moral authority to lead the state any further.
- Steve, Manch

Well said, Bruce M. But we are going to defeat him with what/whom? Recall that, two years ago, Lynch was the only state politician unambiguously against new taxes.

Ellen on term limits--Why would you respond to this sad state of affairs by limiting MY choices as a voter?
- Spike, Brentwood NH

I don't mind the view from the cheap seats.

I DO mind a spineless Governor spending us into enormous debt with no reason or plan to eliminate that debt short of raising or implementing new taxes.

He'd also rather bond that debt and make our children pay for it down the road.

At least *I* can see that from where I sit. The seats may be cheap, but that's all I can afford with John Lynch in the Governor's office!

Craig Benson may have been an apolitical person with no skills to be Governor, but at least he left us with a surplus. John Lynch is bankrupting this state.
- William Smith, Manchester, NH

All I can say is politics as usual - and time to tighten term limits for all.
- Ellen, Portland

This is so funny. If it were a Republican majority using it's constitutional powers to conduct business the minority disagreed with, this guy would be praising them for using the tools at their disposal to thwart the obstructionists.
- Dan, Manchester

Hey Frank,
One "ridiculous"thing the republicans
did not do?
Allow minor children,who need parental
permission for ear-piercings and
tatoos(not to mention school trips),to
receive major surgery,by way of abortion,without parental consent.
Ridiculous Frank?More like OUTRAGEOUS
and CRIMINAL!
- Mike P., Manchester

The Republicans weren't perfect, but they never did anything so underhanded as this. To call a special session for the explicit purpose of skipping the legislative process, the public hearings and debate, that's just a reprehensible abuse of power.

Anyone with a D next to their name on the voter rolls should be questioning if this is a party they want to be a part of, and anyone with a D next to their name who happens to be running for office should go down in the fall. If they don't, it will be because the people aren't paying attention. And I think they are.
- Keith Murphy, Manchester

I was in the Legislature when the Republican majority and Republican Speaker locked the doors of the House chamber to force members to remain. I do not recall any columnist or editorial writers from the UL saying anything bad about it at the time. Times have changed.
- Rick Newman, Nottingham

Robert in Deerfield, why is it when Republicans take a stand against over zealous spending , or anything that the democrats are for, they are called "obstructionists", & when the democrats do it , they are called progressives? Could there be a bias there?
Democrats have spent us into this mess. They were in charge, they passed this budget, they should be held responsible. But somehow, possibly due to the voting public's belief in the media and the sound bite speeches, they will spin this off as Bush's fault.
Imagine, if we had only a 2-3% budget increase, the revenues we have had would have covered it completely. We would have been one of a few states that actually came out ahead, but Democrats could not resist their power to spend, spend & spend some more. To "balance" a budget with a credit card is a disaster in waiting. I suppose that is Bush's fault also.

Here comes the income/sales tax folks.
- Mark, Candia

If the Democrats hadn't blown the budget up by an unprecedented 17+% (knowing full well the state didn't have the funds set aside to pay for it), and if Lynch hadn't signed said budget, they wouldn't have had to call this BS "emergency" session to borrow the money they need to cover their backsides, Thanks for the added debt, Lynch. Get your resume updated.
- Bruce M., Brentwood

Seems to me that the hypocritical republicans in this state have forgotten all the ridiculous things they did while they were in power all those years. The view isn't as good from the cheap seats is it? The minority status of the republicans in this state has been well earned.
- Frank, Manchester

I will be voting republican in the fall. There is simply no other choice, the dems are running wild in Concord. NH made the biggest mistake ever by giving John Lynch a liberal majority in the legislature. And we are paying dearly for it.

Enough. It's time to send these dems back into the minority where they belong. They've proven themselves completely unable to run the state and totally out of control with their spending, tax increases, raising of fees and tolls, etc.
- Bob Hoskins, Derry

Now isn't it funny, or convenient or whatever that it is not mentioned here that it was the Republicans who got up, walked out and went and hid in the bathrooms. Isn't it also interesting that when a roll call vote was requested, said obstructionist Republicans mysteriously reappeared so that their names would not be represented as absent. Then they voted for the rules and the laws. Yes, the Republicans have forced us into Banana Republic behavior and how convenient that we have such a cartoon reporter to leave out the relevant facts.
- Robert, Deerfield

Democrats will stop at nothing to spend us all into the poor house. Now they have the nerve to essentially pay the mortgage with a credit card and call it "fiscally responsible". Democrats also consider raising or creating new taxes to meet that same description. Get ready - they will have to make some "tough choices" when the time comes to pay this ever-increasing bill. And when Democrats make "tough choices" it usually means more taxes and new taxes. As we can see - they will twist any rules necessary to get their way. You think they would not pull another "special session" to implement an income tax?? Vote Republican in November or get ready for some additional withholding of your paycheck and say goodbye to the NH Advantage.
- Mark, Amherst

The irony is that the Democrats, at least nationally, are infamous for staging walk-outs to deny a quorum.
- Kevin, Lancaster

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Charles M. Arlinghaus: "State spending shouldn't be decided by 11 people"
By CHARLES M. ARLINGHAUS, NH Union Leader, Op-Ed, June 26, 2008

STATE BUDGET deficits and needed spending cuts have transferred power to the elite Legislative Fiscal Committee, a sort of super Legislature where 10 privileged members exercise power on behalf of the other 414 senators and representatives.

One of the most prestigious positions in state government is to serve on the joint House-Senate "Legislative Fiscal Committee." It was established to oversee the legislative budget office, but with a broad portfolio to investigate any matter related to any part of the finances of the state -- essentially everything government does.

Its primary duty is to receive funds. It is authorized, without any vote or amendment to the budget, to accept any non-state funds such as federal grants or private donations for any program. Accepting a grant doesn't affect state revenue or expenditures, but Rep. Marjorie Smith this year quite sensibly tried to include as many anticipated grants in the official budget document as possible rather than leave them to the fiscal committee.

A more controversial role is the one currently being exercised by the committee. The fiscal committee must approve any spending cuts the governor makes to the budget. In this role, it assumes some of the executive branch role at the same time it acts on behalf of the other 97 percent of the Legislature.

The two-year budget passed last year would be in serious deficit without action. Revenues are expected to be much higher than last year but significantly below the estimates used to balance the budget. The shortfall is expected to be close to $200 million.

When revenues are less than expected, spending cuts quickly follow. The current budget increased spending to $3.189 billion from $2.713 billion the previous biennium. The increase of 17.56 percent amounts to about $476.5 million. Therefore the cuts needed are about 6 percent of the total budget, much less than half of the increase.

The governor, as chief executive officer of the state, has proposed two rounds of spending cuts totaling about $80 million. In the course of evaluating what he chose to cut, some observers have quarreled with his choices.

In the normal budget process, the Legislature as a whole has the greater role in setting spending priorities for the state. After the governor sends a proposal, legislators spend months setting their own priorities and passing the budget to the governor.

The Legislature has known for more than six months that the budget would face a serious deficit requiring spending cuts. Senate minority leader Ted Gatsas proposed that the Legislature debate priorities by preparing a supplemental budget so that the entire Legislature could evaluate and debate each cut.

The Legislature chose not to do so and limited its consideration to a few small tax changes. By limiting its irregular special session and choosing not to debate spending priorities, the Legislature as a whole removed itself from the process of fixing the budget. The 400 representatives and 24 senators instead turned over active participation to the 10 people on the fiscal committee. Even then, the committee's role is passive in approving or disapproving of actions the chief executive takes.

At this point, the governor has been ceded almost all authority. He has not been directed to cut by a specific amount, told areas to cut or protect, to raise taxes or not to raise taxes. Legislative leadership merely looked at him and said, "We choose not to act. Come up with something you think is best."

So how's he going to fix it? About $80 billion comes from spending cuts. The final number won't reduce spending by the whole amount because cuts invariably reduce the amount of money the budget projected to "lapse," or not be spent anyway. I might not agree with every priority decision he made in cutting the budget, but since spending needs to be reduced by more than twice that much, it is at least a start.

Another $60 million will come from borrowing money for operating expenses -- "bonding" school construction aid. Putting spending on the state's credit card merely delays the pain until next year, but it does temporarily close part of the gap.

Another $10 million will come from requiring the Pease Development authority to pay back money it borrowed. This is a sensible idea anyway, but it won't be available next year. Other tax increases (tobacco, gambling) and a reduced discount on wine sold to retailers probably won't reduce the deficit by more than $10 million, possibly much less.

If the economy improves and all the reductions come in, we might limp through 2009. But most of the problems of this budget will just be pushed onto the 2009 budget. And that nightmare can't be pushed onto the fiscal committee.
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Charles M. Arlinghaus is president of the Josiah Bartlett Center for Public Policy, a free-market think tank in Concord.
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Readers' COMMENTS:

Thank goodness that Kyle and Charlie are having such a good laugh about these quite serious financial problems in the state of New Hampshire. Perhaps if they understood the difficulty, even after it has been explained to you nine times (by my count) you would trade your sneering for serious discussion. The actual increase in non-discretionary spending is about 3.5 per cent. Look up discretionary, it will help you understand better. A good part of the rest has to do with taking things that the Republicans in the past have kept off budget and putting them out in the open (on budget) where tax payers can see upon what they are spending hard earned tax dollars. Now go back to your think tank and stock brokerage accounts or run for office and make a meaningful contribution.
- William, Deerfield

Bravo Charlie!

Rep Marsh (who deeply criticized outside budget reports) is a ways and means member who told NH residents not to worry about the budget and that NH would be fine (UL articles Oct'07 and Jan'08).
- Gavin G., Concord, NH

Charlie,

I bet you that can of Spam, that Marsh won't be signing his name Rep. Michael Marsh after his next election. He will just be a lowly citizen pointing his crooked finger at the evil Republicans. I still love his own statement about not knowing how much money is spent by the state until the end of the year and even then the state still doesn't know. That was a classic slip of the tongue from the out of state liberal he is. The hard work of finding cuts would have been a lot easier if you didn't blow up the budget 17.56% Mr. Representative but please continue to enlighten us with your posts. It always cracks me up.
- Kyle, Bedford

Rep. Marsh has a particularly annoying habit of being unwilling to discuss the merits of an idea but rather responding only by saying "hey Republicans did the same thing." If you disagree then say so. I say now and have said many times in the past that the GOP is just as guilty of bad ideas as the Democrats. I would prefer to debate or discuss the idea not be required to be responsible for everything done by or position held by Ted Gatsas, Harold Burns, Wesley Powell, or Huntley Spaulding.

As far as my being unwilling to let Democrats exercise power, the facts (as usual) are not on Sir Marsh-a-lot's side. Since Mike seems to hang on my every utterance (not that that's a bad thing), he is without doubt aware that I have strongly advocated giving the governor -- this governor, a democratic governor, he evens says so himself, check the candidate filings -- I want to give that very governor the power -- note the use of the five letter word power -- I openly advocate regardless of what Ted Gatsas thinks or what Gov. Sherman Adams supported in 1949--openly and forthrightly I have called for this very governor to have the authority to appoint his own department heads, ceding power to a democrat to appoint democrats, after all he won the election and that's why we have them.

No doubt the guru from Greenland is upset that I have not stepped forward to pare back his record setting spending increase. But Mike, can you blame me? Consider your record. Well before you adopted a budget I pointed out the difficulty your estimates would case and rather than discussing it you catigated me as a politically inspired trouble maker. When I pointed out it was ben Bernanke not me or the Republican National Committee that disputed your assertion that the Housing market was on the road to recovery, you broke off communication. Over the last 12 months you have not exactly indicated a receptivity to my suggestions, no?

Go back and read the piece it is positive about cuts made and merely suggests that more need to be made now rather than delaying that decision until after November (not that that's politically expedient, of course WINK). You want more cuts? Are you suggesting that cutting more money from the budget would be a good thing that you and people you have influence with would be willing to support? Can I suggest that to take politics out of the process, the governor and you and your cadre agree on a target number (I'd suggest another $80 million). Once the number is agreed to, have a meeting or "hearings" or whatever you want to call them but get the other party to also agree to that number and then sit down and hash out cuts.

But anyway, thanks for reading my column. I always enjoy reading your comments even when you're angry (maybe especially when you're angry). But just for the record, I don't intend to be held responsible for everything ever done by someone elected as a "republican." You should broaden your horizons beyond the narrow focus of elections. neither good ideas nor bad ideas are the province of one political party. You should start considering ideas on their merits, it'll make you a better legislator. Any advice you need, go ahead and email me at arlinghaus@jbartlett.org but no spam please, I only like the kind that comes in a can (the new spam with bacon is remarkable by the way)

best wishes, Charlie
- Charlie, canterbury

Too bad NH residents couldn't vote on the final budget.
- DFM, Salem, NH

The fiscal committee system that Mr. Arlinghaus decries has been in place in New Hampshire for many years. It was created under Republican legislatures, and functioned in the same way in years past as it does today. Is Mr. Arlinghaus’ real problem that, with a Democratic legislative majority, the power of the fiscal committee is in the wrong party’s hands?
Sen. Gatsas was the President of the Senate last term. If he thought the expansive role of the fiscal committee was not a good idea, he had ample opportunity to push for legislation to change the way it works. With solid majorities in both houses, he would have succeeded. I went back to previous legislation and saw no evidence that he tried to do that. Sen. Gatsas also had months to propose responsible budget cuts this year. As far as I can see, neither he nor his party proposed a set of comprehensive cuts for the current budget. It is easier, and politically more expedient, to sit back and point fingers rather than do the hard work of finding cuts.
- Rep. Michael Marsh, Greenland

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Charles Arlinghaus: "State borrow-and-spend budgeting is worse than we thought"
By CHARLES M. ARLINGHAUS, The NH Union Leader, Op-Ed, Wednesday, Jul. 16, 2008

THE STATE government's version of a credit card spending spree is the most serious threat to New Hampshire's traditional fiscal stability. The recent effort to borrow $80 million to help address a potential $200 million revenue shortfall has been in the news. Less widely known is that the state's highway trust fund is only balanced in the current budget because it borrowed another $60 million to pay operating expenses.

In general terms, the state budget is required to be balanced. The state may spend no more than it collects from taxes and other revenue sources. The state's balanced budget law also prohibits the use of "bonded indebtedness to fund operating appropriations."

While bonds -- borrowed money -- are used to pay for buildings and similar capital investments over time, the money used to pay for the state's regular budget may not be borrowed.

As we saw last month, the way around that weak law is to merely assert that the expenses paid for are not operating expenses. The $80 million borrowing authorized last month will be used to pay for an expense that has always been in the operating budget, that was included in the operating side of both budgets Gov. John Lynch proposed, and was an operating cost in the budget the Legislature passed. Nonetheless, the borrowing passed.

When the budget was originally passed a year ago, the state balanced the separate highway trust fund budget the same way, putting $60 million of what used to be called operating costs on the state credit card.

In New Hampshire, general state taxes pay for the state's general and education funds. Gas taxes and motor vehicle fees are segregated in a highway trust fund used to pay for roads, bridges and some other costs. This fund was the subject of a very sensible spending cap passed this year.

However, the Legislature wanted to spend more money than it had coming in from fees and gas taxes. The committee report sensibly stated that two options were to spend less money or to raise taxes. That basic premise sums up the whole of state government. Raising taxes or spending less money are the two basic options of all state budgets.

What to do when you want to spend the money but don't want to pay for it? Charge it. An additional $60 million was borrowed to pay for expenses that used to be paid out of the operating budget. The excuse was refreshingly honest. No one tried to pretend that these were really capital costs that should not have been in the budget in the first place. They forthrightly admitted they didn't want to raise taxes and didn't want to cut spending, so they borrowed the money. How very congressional of them.

The practical effect of all this is delaying the pain. Next year's budget promises to be much more difficult than this year's, and the highway budget will be worse.

Although the gas tax wasn't raised, it was shifted around. What is reported monthly as gas tax revenue includes 16 of the 18 cents of the gas tax. The remaining money is for "betterment" and goes into the highway capital fund. The extra penny, about 6.7 percent more, makes it appear that highway fund revenues are increasing, but it's really just a penny moved from one shoebox to another for the same purpose.

Some of us were surprised that revenue was increasing until we discovered the shift. Adjusting for the phantom penny, gas tax collections and usage ended the year a little less than 1 percent below fiscal year 2007. With gasoline prices about 75 percent higher than 18 months ago, a small longer-term drop in consumption will be likely.

In fact, during the last quarter of the fiscal year, the price increases seemed to be finally having an effect, albeit a very modest one. Usage for April, May and June was about 4 percent below the prior year.

The next budget will likely face flat revenues again and legislators will have to replace the $60 million borrowed. The rest of the budget will also be under pressure to replace the additional $80 million it will borrow and the other pressures of the $200 million revenue shortfall, so no help will come from that quarter.

The choices will be the same: cut spending or raise taxes. Putting another $140 million on the state's credit card should not be an option.
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Charles M. Arlinghaus is president of the Josiah Bartlett Center for Public Policy, a free-market think tank in Concord.
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Readers' COMMENTS:

Mr. Boyington,

I'd like to remind you that like our New Hampshire legislature, the United States legislature is ruled by a Democratic majority. Is that the parallel you were trying to draw?
- MIB, Kingston, NH

One way to increase revenues is to allow people who are at least 18 years old to buy alcohol. This would increase the amount of money the New Hampshire State Liquor stores make and increase the revenues of many bars and restaurants. This may increase the amount of tips that many servers obtain.

I think it is ridiculous that we tell an 18 year old soldier who has lost an arm in Iraq that the soldier may not drink alcohol in a bar or a restaurant. If you do not think 18 year olds should be allowed to drink alcohol, do you think 18 year olds should be allowed to serve in the military? I support allowing 18 year olds to serve in the military.

A friend of mine was murdered by a drunk driver in 1980 when I was 10 years old. I want drunk drivers who harm others punished severely.

Live free or die means you get to harm yourself. Live free or die does not mean you get to harm others. New Hampshire should have mandatory auto insurance so that people who harm others will be held accountable. My friend's son has significant brain injury because of an uninsured driver. The driver is now required to have auto insurance.
- Ken Stremsky, Manchester, NH

Gavin from Concord: We need all those troopers to sit in their cruisers at construction sites with their engines running. They are part of the New Hampshire welfare system.
- Bill, Tuftonboro

Federal funds to the states have been cut way back. The percent change after adjusting for inflation from just 2006 to 2008 is down 5.13%. This is the case even as things have gotten more expensive and the federal government has provided more unfunded mandates. Where did you think this money was going to come from? Republican fantasy land?
- Robert, Deerfield

While I agree that cuts need to be made, what we are losing sight of is that "spending run amuck" starts at home (ie city, town, village, etc). Look how many new schools were built or are in the process of being built. Why couldn't they be renovated? Renovations make the most sense as the census bureau reported a few months back that NH is losing school age children and is expected to decrease further over the next 10 years. Here in Concord we have 4 elementary schools which are less than 50% occupied! I know because my daughter goes to one.

To answer Tom St. Martin from Candia.

I would cut or revamp the following:

From employment security-Its time to centralize everyone to cut out all the managers who supervise a manager and so on. Employment security is a good example as it seems that there are 10 managers (too many regions overlapping) for each employee. It seemed to work pretty well and efficient when they were all centralized.

Highway Patrol-do we really need troopers and the highway patrol in a state this small?

Total revamp of the state and local welfare system. Our current system has multiple generations on welfare which proves the system is a failure.

Maybe Mr. Marsh one of the authors of the budget can add his two cents....oh wait that will never happen.
- Gavin G., Concord, NH

Thanks for so many comments. Of course steve is right that there are significant problems federally as well "How very congressional" in the eighth paragraph is not meant to be complimentary.

I would hope that Washingtonian thinking doesn't excuse our foibles but rather makes us look again at a balanced budget amendment or some sort of Gramm-Rudman mechanism. Let's export discipline to DC regardless of who wins what office rather than import federal-style budgeting.

Let me say, before someone points it out, there are some differences in federal budgeting. States have a capital budget and an operating budget, the feds just have the one. Nonetheless, a balanced budget would be a sensible discipline. Going back to balance over 2 or 3 years is fine but taking 8 or 10 is too long I would think.
- Charlie, Canterbury

Unfortunately, we have no real choices. The democrats only want to expand government and take more from us "rich" folks to pay for it. Republicans have been no better; when Shaheen was Governor the republican controlled legislature gave her everthing she wanted. Then came Benson, they turned on him like a pack of wolves. He wanted to cut, cut, and cut. They couldn't stand the heat. Then led by great republican minds like Ted Gatsas and Dick Green stabbbed him in the back constantly.
You can't tell the difference between the two anymore, demoncrat, republican all the same.
- M Bodruk, manchester

New Hampshire might want the rooms & meals tax to be 5 percent to encourage more New Hampshire residents and residents of other states to eat in our restaurants and visit our hotels. Companies that do business with restaurants and/or hotels may have more sales and increase employment. This may increase the value of many properties helping cities obtain more money from property taxes.

Allowing smoking in restaurants will encourage more smokers from New Hampshire and other states to eat in our restaurants. This could increase the tips that many servers obtain. It may help many restaurants stay in business that may be on the verge of closing because of high gasoline prices.

Reducing the cigarette tax by 25 cents or more may encourage more people from out of state to visit New Hampshire to buy cigarettes, visit restaurants, and shop in other businesses. Convenience stores may be able to sell more lottery tickets if they have more customers.
- Ken Stremsky, Manchester, NH

Sorry tom, candia, but I have a very specific recommendation. Get Concord out of the education business. Return all education funding, spending, and (most importantly) decision making power to local government.

If we don't, Concord will do for education what it has done for every other function it seeks to control: Drive up costs, lower quality, and deficit spend.

Educrats have worked hard over many years (think Claremont, Londonderry, HB927, and "educational adequacy") to place control of education in the hands of the state. This allows for one-stop influence shopping to drive costs sky high.

Every function we can move from state control to local control will save us money. We'll waste billions if the NEA/AFT crew gets its way on this issue.
- Jim Peschke, Croydon, NH

I understand that Bush himself is not running in the fall. Could you McCain fans explain how he is going to change direction from Bush on the economy? What spending will he reduce? He has already said he will only cut taxes. No spending cuts; more tax cuts; that seems like a terrible fiscal plan for the country. You guys comfortable with him running bigger and bigger deficits?
- steve boyington, Chester

Hey Tom from Candia: Cut welfare and the other socialist programs funded by the state. Refuse the Section 8 funding from the feds that force state agencies to manage it. Once Section 8 housing subsidies are gone, crime will drop and we can cut the number of police needed. We can also cut the number of firefighters needed as the meth labs will not be causing fires. Get the state dependents out of the state and let Massachusetts have them.

Borrowing is NEVER responsible for balancing a budget. You bond for projects, not for everyday needs. You mortgage for a house, not for food and water.

Sadly, the Republicans will be spenders as well, just hopefully less.
- Mike, Nottingham

So ... let's cut beyond the rhetoric and see what useful suggestions for cutting spending you have?

Most of the increase in the state budget is due to previous obligations, can't cut that.

Police?
Other law enforcement?
Bureaucrats ( always popular, but bear in mind that many positions in NH are actually for administration of federal programs and bring in more than they cost)?
Raise the university system tuition?

Got anything constructive besides the usual 'cut the fat' rhetoric?
Didn't think so .... just more election year republican bull-oney.
- tom, candia

Hey steve,considering the "evil" Bush will not be on the ballot in the fall,I would recommend the lesser of two evils.John McCain.

Robert,to borrow a line from Reagan(you brought him up):
"There you go again"
Were you refering to the same No Child Left Behind boondoggle championed by your fellow "progressive" Teddy Kennedy?
Speaking of being "progressive"(read socialist).Are we to understand,Robert,that you would like to leave the Arabs behind?
That's not very inclusive,from a good liberal such as yourself.
- Mike P., Manchester

The only cover Democratic apologists can give on this issue it to point at the federal government, which I think we can all agree is a mess. This article is not about the federal government but rather about the terrible fiscal trends in the State of NH. The federal government is a mess, NH needs to save itself from the same type of mess by voting for fiscally conservative legislators from both parties. If NH does not, we will have an income tax in 2 years.
- Sally, Dover

Robert and Steve, get over your BDS (Bush Derangement Syndrome) and address the issues here in New Hampshire. Our budget problems are not Bush's fault (yes, believe it or not some things are NOT his fault). The blame lies squarely with Lynch and his fellow travelers in Concord. New Hampshire's debt has been created by them, not Reagan, not Bush. Also, Chris makes an excellent point - why on earth would any Republican support Lynch?
- Mark, Amherst

Steve Boyington, vote Responsibly and give the majority in the house and senate BACK to the responsible party. Keep the Responsible party in the White House and get them in the State House also. THATS the recommendation. Unless you like lies and taxes.
- Mike, Concord

There really is no choice but to boot the Democrats out of the majority in Concord. They've proven themselves to be utterly incapable of governing the state properly.

NH is a fiscal trainwreck and they are pushing us to the point where we're on the verge of becoming Taxachusetts North.

Enough is enough. Vote Republican and save New Hampshire!
- Jim, Wilton

Responsible Republican - now there is a novel concept. Your share of the National Debt is now over $30,000. Eight Trillion of that was run up by Reagan and Bush II. Perhaps you are having trouble with the math. Not only is this debt owned by China, Saudi Arabia and rich people, the costs which used to be born by the Federal Government are shifted to the states so that we have to pay for things they mandate - like No Child Left Behind, and my favorite - No Arab Left Behind.
- Robert, Deerfield

Charlie too bad no one took those independent budget reports seriously.
- DFM, Salem, NH

Come on guys be fair. It seems like the borrowing was very resposible paying for things long neglected by previous administrations. In a poor economy government can't just stop providing services and the roads are in horrible shape and need to be fixed. Your making a mountain out of a mole hill on this.
- Harold, Strafford

Michael in Epping, you got it right. The Democrats are sinking us into a financial whole (as is usual for them). When they are finally voted out, which I hope is this year, the lame media and unthinking masses will claim it's the Republicans' fault while they try to clean up the mess left by the Dems. Ugh.

The state government should be ashamed of themselves and what they are doing to our wonderful state.
- Catherine, Brookfield

New Hampshire is at a crossroads.

We can take the toll road to the left and have one state government budget crisis after another even as we are taxed ever-larger amounts of our income in pursuit of never ending claims for government largess.

The other choice is to return to the road to the right - the freedom road that has most often been traveled in New Hampshire. This is the road of low spending, low taxes, local control, and personal responsibility.

That will be the choice this November: Democrats and continued fiscal irresponsibility or Republicans and a return to the New Hampshire Advantage.
- Bill, Mont Vernon

Hey Charlie, ever look past the borders of New Hampshire? The GOP under Bush has done and is doing much worse than the Dems under Lynch in NH. What would you recommend a voter to do in the fall?
- steve boyington, Chester

20% of Republicans voted for Lynch last election. Shame on them. Maybe they will wake up and smell the coffee.
- Chris, Merrimack

The Dems are being crazy like a fox. Create a fiscal crisis that can only be solved by a new tax. I see a state income tax in my future. The only way to avoid it is a Republican majority in the House and that might happen this fall.
- John Bachman, Amherst

These big spending and borrowing Democrats must be thrown out of power. All Republicans must do their best to make people aware of the scam that is being run and the debt that is being run up. This is absolutely disgraceful. And there is no reason for it. Spending can and must be cut. This Governor has been a disaster and his accomplices in the legislature have brought us to the point where a major new tax will be needed if we don't reverse course. Vote Republican in November or hello Mr. Broadbase.
- Mark, Amherst

Thump...thump...thump....thump....

Thats the income tax/sales tax drum beat folks. Here it comes!!!!!!

Funny, the Mass people that moved here changed the state to little Massachusetts and now Massachusetts is trying to vote out their own income tax.

I can see the speeches AFTER the Democrats are retained in power in this state...."There is no more revenue for us to tap into without an income or a sales tax. It's the fiscally responsible way to "FAIR" taxation."

You voted them in NH Voters, will you be fooled yet agin this fall???????
- Mark, Candia

In the last election I heard people complain about the States Republicans and decided to vote in the Democrats. Well you got what you wanted The Democratic Spending Machine, now what? The Democrats are now, for the first time in what 100 years, in power. Look what they do, they take away our rights and spend us into oblivivan. Now the voters can vote in responsbile Republicans so they can complain about the cuts necessary to make the state sovent again. Be careful what you vote for and realize the consequence.
- Michael King, Epping

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"Where did the state suddenly get money to study trains?"
By CHARLES M. ARLINGHAUS, NH Union Leader, Op-Ed, July 23, 2008

FINDING A LITTLE extra money from the taxpayers to help out your friends is always more popular than cutting spending to balance the budget. It shouldn't surprise us that just weeks after the latest round of spending cuts, some administrators are talking about finding some of our money to help out their favored projects.

The broad parameters of the state's situation are well known. Revenues came in about 2.5 percent higher than last year but are nonetheless below the amount budgeted. Projections are for a two-year revenue shortfall of around $200 million. To fix the problem, Gov. John Lynch proposed a few smaller tax increases, issued executive orders to cut back some spending and borrowed the money for the difference.


Click for Editorials & Op-EdsThis budget had included a 17.5 percent increase over the last one, the largest increase of any of the budgets passed over the last 20 years.

The governor issued a hiring freeze and proposed two rounds of cuts of about $80 million. Unwilling to cut any further, he made the controversial decision to borrow $80 million to pay operating expenses.

Any cut is going to be difficult. Program administrators tend to end up defending their turf instead of aggressively seeking savings. Every program sounds like a good idea and no one item of a few hundred thousand dollars sounds like it will break the bank.

This week, we were treated to the classic example of why the government has so much trouble tightening its own belt. A group that wants to bring passenger trains from Boston to Concord wants government funding. In the short term its members want to hire two staff people to run a rail authority to figure out how to come up with $200 million in capital costs and additional annual operating subsidies to pay for trains.

The state just cut $80 million from the budget and was unable to find the additional $120 million needed to plug the remaining hole. Despite that, state Transportation Commissioner George Campbell offered the rail authority money from "his budget," as the Nashua Telegraph phrased it, to help pay some of their costs.

When the governor was looking for ways to cut spending to plug a giant $200 million hole in the budget, the transportation commissioner didn't mention he had some extra money in "his budget." It's hard to imagine the governor refusing the extra money, saying "don't worry, balancing the budget isn't nearly as important as keeping it in case we need to pay some of the costs for rail authority staff in a few months."

Unfortunately, this is human nature. It is personally gratifying to take some of our tax money from "his budget" to throw a little largesse at some people who will be suitably grateful. Recipients will be grateful in the same way they are grateful to the philanthropist who takes his or her own money and donates a new stove to the soup kitchen or a new wing to the museum (or perhaps cash to his favorite local think tank).

But cutting your budget almost seems like a betrayal of purpose. You want to do great things in your own bailiwick. Solving a budget problem or saving tax dollars to be spent by someone else or not spent at all seems like someone else's job.

This helps explain the appeal of an across-the-board 10 percent spending reduction. While in theory every single expense might be examined and a priority list established to guide reductions, practice never seems to work that way. The newest expenses are more likely to be cut than existing programs. Large dollar amounts reach your savings goal faster than small ones, so nickel and dime expenses are more likely to be overlooked.

An across-the-board cut is awkward but it forces every manager of large or small projects to examine every detail and find extra money in "his budget" to help the entire budget.

Most recent budgets include something like this. Back of the budget footnotes often direct an entire department to come up with an additional $2 million in spending reductions. The recent executive orders directed the university system to find $2 million and send it back. The managerial decisions are left to the administrators.

Without some mechanism to force every department to look for savings, we'll be left scratching our heads and asking: "if cuts were so deep that we ended up cutting aid to the neediest, how was this guy able to find some extra cash for trains in his budget?"
-
Charles M. Arlinghaus is president of the Josiah Bartlett Center for Public Policy, a free-market think tank in Concord.
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Readers' COMMENTS:

Steve - I cannot believe you are pointing to China as a model of smart growth! They have built a heavily polluted, traffic-jammed nightmare of a country. It is precisely because China is building so many roads and putting so many new cars on them that oil is so expensive. Is this the model you really want us to follow?

Dependence on oil is what dragged us into a trillion dollar war ( a state-controlled war, by the way) - is that a smart use of our money?

We are widening 93 now. But - that is costing nearly a billion dollars. How in the world can we spend so much money building highways and securing our oil supply and yet reduce the costs?

And don't say drill more here - because there is no way to drill enough oil to cover our imports. We need to be reducing our overall dependence on oil and not increasing it.

That much should be obvious by now.
- Art, Portsmouth

Anyone who has waited on a platform for an infrequent train, or missed their connection laments the freedom that is lost with rail travel. Time is money.

The lawyers that increase registration fees, insurance fees, taxes and gasoline prices all seek to increase the cost of citizens operating their own private vehicle, which represents the freedom to travel anywhere one wants on demand.

We should to do everything possible to lower these costs. People who advocate rail want state control over your movements, which is why Europe and Canada heavily subsidize rail, and tax accordingly. They love dependency on the state. The Chinese are not building trains, they are building highways. We should widen I93 instead.
- Steve, Manch

Funding once again. Each side says that the other is the worst. We had Republicans and now we have Democrats after the last election. What has changed? In Washington it is the same thing. Congress is controled by the Democrats and look at the problems. The approval rating for Congress is at its lowest level in history. Doesn't that tell you something.
- Dennis, N Woodstock

Are you _really_ asking this question? Considering that the rail position right now is unfunded and comprised of volunteers, it astounds me that the UL would question this. How much will this take? $30,000 out of a $2 billion dollar budget?

Nah... on second thought the UL does not astound me, just disappoint.

(Editor's note: The author, Charlie Arlinghaus, is a regular columnist but is not a Union Leader employee and does not speak for the newspaper.)
- Art, Portsmouth

I think that the gentleman from Deerfield misses the point. In this reader's opinion, it is not so much the function that is being performed here as much it is the process by which the function has been implemented.
- Jack, Manchester

During my 3 terms as city councilor in Laconia the council and school board seemed to "find the money" for studies, etc. that did not have a line item from "a bare boned budget".
My question at the time was: from where are you transferring the money and what effect does that have on that line item/deparment?
And now Governor Credit Card is doing it again.
Charlie is correct. If Lynch and the Dems continue to "find the money" for small projects how long before that adds up to "real money"?
Politicians from both parties forget this is not Monopoly money - it is OUR MONEY!
Niel Young
bnyoung@metrocast.net
- Niel Young, Laconia

Robert, if "giving corporate greed merchants no bid contracts for pet Republican projects" isn't a good thing, why do you imply that giving corporate greed merchants no bid contracts for pet Democrat projects is? (That's why I'm a libertarian - I don't believe in supporting corporate greed at all.)

Remember, trains are an awful way to transport people. Economically, trains are good for hauling dense materials like coal or iron ore, but not for light things like people. I suppose you could increase the economy by packing people in like sardines, but it still wouldn't get to the point where it made sense.
- Ron Helwig, Deerfield

Investing in Commuter Rail for New Hampshire would be a rare example of tax money well spent. We would get every penny back and more in economic stimulus to NH--much more overall benefit than $600 checks to buy gas for your SUV.
- Chuck, Nashua

Where did the state suddenly get money to study trains? It is the function of government to anticipate needs and handle problems which are by their very nature community based. The new thing here is that government is actually performing their function after people like this opinionist opposing spending any money on anything. The reason money is a problem now is that we are blowing off trillions for a war of no value to us and giving corporate greed merchants no bid contracts for pet Republican projects and just losing billions and shrink wrapped pallets of hundred dollar bills. So now, having trashed the economy, another reason for the government not to do its job is presented by someone who hates any government. Big surprize.
- Robert, Deerfield

Great article and very well stated. Do you think that the governor or department heads might respond...I doubt it, which really furthers the point of the article. Give the readers more stories like this one.
- Les Silver, Manchester

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"Charlie Arlinghaus: Follow Sweden's lead on education reform"
By CHARLES M. ARLINGHAUS, July 30, 2008

New Hampshire should become more like Sweden. It is hard to believe I just wrote that, but the country of Volvos, ABBA and third-way socialism has moved aggressively and successfully to choices and decentralization in improving the education of its children. New Hampshire can and should follow in Sweden's footsteps.

In the 1970s, Sweden was held up by would-be socialists as a model for greater government control. But in truth, Sweden's experiment with socialism was short-lived.

In the 1960s and early 1970s, Sweden slowly moved away from a moderate-sized government, but the end began in 1976 thanks to Pippi Longstocking. Yes, that Pippi Longstocking.

In 1976, the highest rate of taxation had risen to a ridiculous 102 percent -- for every additional $100 of income, workers had to send the government $102. Astrid Lindgren, the beloved author of many children's books, including the Pippi Longstocking series, protested and roused the populace in a way that economists never can. The government was ousted in favor of the "Moderate Party." In Sweden, the party furthest right is the Moderates.

After 42 years of socialist governments, Sweden experienced competitive elections and real policy debate. Taxes became more rational, and non-socialist coalitions (led by the Moderates) would occasionally form governments.

In 1991, a Moderate-led coalition took up education reform. Up until then, teachers had been employees of the national government and schools had a universal state curriculum.

The reform made education a local responsibility and allowed schools to adopt their own curriculum. "Local control" is what we would call that over here. Ironically, these reforms in Sweden took place at about the same time New Hampshire's Supreme Court was trying to force us in precisely the opposite direction.

The reforms went further and decentralized the provision of education in a way that would make Milton Friedman proud. Independent and government schools were established on an equal footing with parents able to use their funding wherever they chose.

The result is predictable. More choices were created, and parents and students had many more options to better address the individual needs of a child. According to a 2003 study of the program, "different schools compete through the quality of education by offering special subjects or focusing on children with special needs."

The program originally pushed by the Moderate Party has been accepted and supported -- even by the Socialists when they returned to power. A full decade-and-a-half later, none of Sweden's political parties opposes the program, except the former Communist Party.

Sweden is miles away geographically and miles ahead of us metaphorically, but there's no reason New Hampshire can't learn from its lessons.

New Hampshire's recent attempts at education reform have been half-hearted. A landmark 2003 law established charter schools, but funding has been a struggle from the beginning. We recognized that having 25 percent of our children drop out of high school is an embarrassing failure, but the state's "reform" is to merely say you can't drop out until you're 18, as if that will actually help.

The Legislature persists under the notion that endless discussion about reshuffling state aid to towns for education is the same thing as discussing educating our children.

But change is possible. Tomorrow is Milton Friedman Day, when we celebrate the accomplishments of one of the legendary thinkers of the 20th century. Friedman is largely responsible for the vision Sweden adopted of separating the financing and administration of education and for helping us understand that more choices can lead to better outcomes for everyone.

Two years ago, New Hampshire came within a whisker of adopting a school choice scholarship bill that would have created scholarships for families of modest means to have more choices for their children's education.

In New Hampshire, rich people have the means to move to another district or choose a different school to suit their child's educational needs. Giving poorer families similar choices can only lead to better outcomes for everyone.

Sweden has figured out that one size can never fit all. For something as important to our future and our children's future as education, why would we not want many different choices to better match the individual needs of an individual child?

--
Charles M. Arlinghaus is president of the Josiah Bartlett Center for Public Policy, a free-market think tank in Concord.
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Readers' COMMENTS:

I believe the quote that William cited was referencing the economic effects that school choice would have on its "taxpayers". I wouldn't want it to be misinterpreted.
- MIB, Kingston, NH

Great article Charlie. Wasn't Sweden also used as the model for Bush's private retirement accounts proposal?
- Gavin G., Concord, NH

Such enthusiasm for a socialist system seems surprizing when the results as reported by economists reviewing the data is as follows. "The overall conclusion is that neither the negative effects one could have feared, nor the positive effects one could have hoped for, were large." This is from the summary of the Hoover Institution which is known to vacuum up any conservative possibilities. Most significant finding, independent schools attracted children of the rich and immigrants. Is that what you want?
- William, Deerfield

I can hear the uproar and rioting already. Get ready Charlie, anyone who strays from the sole/rigid orthodoxy that public schools funded completely by the state (aka shelving local control and bleeding the taxpayer dry) is the only way to do business gets labeled “anti-teacher, student, education, progress, etc.” It is no exaggeration to state that some of my colleagues on the House education committee feel that they and other government bureaucrats are vastly superior to parents in making the proper educational choices for their children. Our friends on the left advocate diversity all day long when it comes to culture, race, and religion (which is important in many ways). But when it comes to education and crossing the NEA...it’s time to sell out and break out the one size fits all “cookie cutter.” Raise other ideas like school choice, vouchers, charter schools, home schooling, or any other free-market approach and you become a threat to the public. I come from a family of two public school teachers (mother and father) and I was public schooled my entire academic life (elementary through college). I believe in public education. However, I’m not so narrow minded to believe that my education is the best and only way to educate in every circumstance for every student. Some of these other philosophies (such as the ones tried in Sweden) may very well strengthen public education and education as a whole. I like to think I’m practicing open-minded tolerant liberalism when I am at least willing to entertain other approaches to education.
- Rep. D.J. Bettencourt, Salem

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"Charles Arlinghaus: Who pays taxes, and how much, might surprise you"
Op-Ed, The NH Union Leader, Wednesday, Aug. 6, 2008

Don't tax you; don't tax me; tax that fellow behind the tree. Everybody's favorite tax policy is to tax the guy behind the tree. I pay too much in taxes, and I'm willing to believe you do too. Maybe if we take the money of the guy behind the tree, we'll both become richer. This is the same philosophy, by the way, that undergirds the decision of the guy with no neck to take someone's lunch money in sixth grade.

Popular culture suggests to us that rich people take advantage of the dreaded loopholes to get off scot-free while hard-working Americans are forced to shoulder their burden. Or at least they probably aren't paying their fair share. Like Charlie Brown's little sister Sally, all we want is what's coming to us; all we want is our fair share.

To help Charlie Brown's sister figure out what exactly her fair share is, the IRS publishes data on tax liabilities each year. I think you might be surprised by who pays how much.

The most recent data are for 2006. Start by asking yourself how many Americans don't pay any income tax at all -- they either don't have to file or have every dime and sometimes more refunded to them. Maybe 10 or 15 percent?

It turns out that about 41 percent of us have no income tax liability whatsoever, the highest percentage in modern history. Around 32 percent of all tax returns filed have no liability, so they get back everything they paid. An additional group of people don't even have to file.

Of the people who file income taxes, including the third that has no liability, the bottom half pays 3 percent of all taxes and the top half pays 97 percent of all taxes. Narrowing even further, the richest 1 percent of all taxpayers account for 40 percent of taxes paid.

You are probably telling yourself, "they make more so they pay more, that's simple enough." In fact, the top 1 percent of American earners make 22 percent of the income and pay 40 percent of the taxes. That sounds like maybe they're paying their fair share and then some.

The bottom 50 percent of tax filers earn 12.5 percent of all income and pay just 3 percent of all income taxes. No one is suggesting they should pay more, but it seems clear that their burden is getting lighter. Twenty-five years ago, the bottom 50 percent paid 7.5 percent. Now it's down to 3 percent.

Another common accusation is that tax cuts have shifted the burden away from rich people. From 2002 (before the Bush tax cuts) to 2006, the share of taxes paid by the top 1 percent went up from 33 percent to 40 percent.

Tax cuts in the Reagan years also increased the share of taxes paid by the rich. In 1981, the richest 1 percent paid 17 percent of the total tax burden. It had increased to 25 percent by the time Ronald Reagan went back to California.

In recent years, the share of the total income tax burden paid by the richest 1 percent has been increasing and the share paid by the bottom 50 percent has been decreasing. In addition, the number of taxpayers paying no taxes at all is increasing.

Because New Hampshire is one of the wealthier states by average income, many of us will assume that we have many more of the highest earners than average. It turns out that New Hampshire is a very middle-class state with fewer high earners than average and fewer low earners than average, but a big middle.

Our top 1 percent earned only 18 percent of the total for New Hampshire, and the cutoff to be in the top 1 percent was $360,000 instead of $390,000 nationally. At the other end, only 24 percent of New Hampshire filers had zero tax liability compared to 32 percent nationally. New Hampshire's median taxable income was $37,331 in 2006, about 15 percent higher than the national average.

In election years, it has become popular for politicians to seek your vote by turning you against the other guy. He's going to lower your taxes by sticking it to the guy behind the tree. You can vote for me because we both have a common enemy.

Remember, the richest 1 percent of Americans earn 22 percent of the income, but pay 40 percent of the taxes. They didn't get tax rebate "stimulus" checks this year, but they paid for mine.

Tax cuts for everyone who pays taxes, like the Reagan, Bush, and Kennedy tax cuts, are fair. Pitting you and me against the guy behind the tree is not a good recipe for unity or fairness.
-
Charles M. Arlinghaus is president of the Josiah Bartlett Center for Public Policy, a free-market think tank in Concord.
-
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Readers' COMMENTS

Nice article, Charlie. It's a good thing the rich keep getting richer, I guess. If they didn't, all the deadbeats who "feel" something is wrong and don't pay the kind of taxes that the wealthy pay would have to go to work or find another way to have their lives subsidized. If we had a national sales tax instead of an income tax, we would not have the stupid sense of entitlement that comes with the ability to take someone else's money to pay for our wants and needs.
- Rich, Manchester

I don't know if this will post, I was unsuccessful in getting my second comment through but let me offer some information. The IRS data is summarized in a few tables by the excellent Tax Foundation at this link: http://www.taxfoundation.org/news/show/250.html

I hope you'll find that the information I selected was not misleading (a concern of paul's) If you do please let me know how I may have erred.

Anywho, to answer Breyer: I don't think the percentages are meant to be equal. The richest 1% of income tax filers have a total adjusted gross income that is 22% of all the income of all the filers. The amount of taxes they pay is 40% of all taxes paid. Similarly, the top 10% of filers (includes the top 1% and more) pays a total of 71% all income taxes collected while they earn 47% of the income being taxed.

If we taxed every dollar at one rate with no deductions, the numbers would match. But we don't tax the first 20,000 at the same rate as the next 20% (nor am I suggesting we should). Look at tables 5 and 6 at the link provided and you'll see what I mean.

The top people aren't throwing off the curve, they're allowing the others to pay less. The break even point is about 10%. That is to say that those below 10% pay a smaller share of tax than their share of income. This shows only that this one tax works as intended.

As for income inequality, that's a subject for a whole 'nother column!
- Charlie Arlinghaus, Canterbury

Eliminate all income taxes, period. It's not fair that someone who is successful financially should be penalized for that success.

Instead we should have a federal consumption tax. It is the only fair way to go, if you consumme, you pay regardless of your income.

Of course, the real problem is that the government spends money at an alarming rate!
- Lex, Lowell

Well Charlie, you forgot to take the sqaure root of pi and multiply it by Richie Rich's $$ stashed away in UBS Banks of Switzerland. Yet another arrogant Republican trying justify the polarization of wealth using fuzzy math. Too funny.
- Ed, Manchester

Paul, a good point. Whn I refer to the 40% paying no federal income taxes, I tried to always make clear I meant income taxes, one sentence slipped in without an adjective (reminder: adjectives are our friends, use them more).

The people I mention are left out only of this one tax system - the federal income tax. Most of them pay payroll taxes which our government insists on thinking of as a retirement contribution not a tax.

In addition, I don't suppose that any human living in the United States escapes taxes altogether, at least not that I can think of.

My point is merely that the big tax we use is actually quite progressive in its impact. I hope that the data I used was not selective. In fact, I'm convinced that it is not. Nonetheless, like all of these things, you should examine it yourself. If you do think I erred or used something that was misleading, please let me know though. We should disagree on policy and implications not on the basis of discussion.

As for other points, of course poorer people pay less because they make less and it should be so. No one would suggest that a guy making $20K and a guy making $100K should both pay $800 or some such thing. The point I'm making is that the people making 22% of the money are paying 40% of the tax meaning all of us in the lower brackets are benefitting from that.
- charlie, canterbury

It is sad that many people do not undrstand the truth when it comes to taxes. There is no reason that one group should be paying huge amounts of their income when others pay nothing! to put it more simply; McDonalds doesn't charge $.50 for a burger if you make less than $50k and $1.00 if you make more than $50k and if they did everyone would have a fit.
How come the liberals do not quote JFK talking about tax cuts as noted by Charlie? They always stick to their montra that the rich do not pay their fair share. This article makes it pretty clear that they do. Maybe we should forward it to McCain!
- Jesse, Orford

Charlie, thank you for the link... it was a nice read.
Perhaps my biggest complaint is your comment that the top 1% "...pay 40% of taxes with only 22% of the income." I feel that this is comparing apples to oranges here. You're comparing percentages of two different pools of money. The number 40 is obviously greater than 22, therefore the rich must be getting ripped off.
Should your two selected percentages be equal? If so, then I feel bad for the bottom tiers.

My argument lies with the fact that I feel that the rising tide is not lifting all boats. I don't have a link(sorry), but much has been made about the growing income disparity. The free market is working, unfortunately it doesn't seem to be working for everyone. Yeah, my own tax contribution isn't as high (percentage-wise) as it "should" be. But is it because of the current progressive tax rates, or is it because the top 1% is (like that one smart kid in class) just throwing off the bell curve?
- Breyer S., Manchester, NH

Anna, the reason most jobs go overseas or to Mexico is BECAUSE of prohibitive tax laws - not low wages. And which rich are those you think are sending jobs overseas? Surely not the mom and pop businesses that make up a great percentage of employers!
- R, Raymond

Rick, I made no mention of who was good and who was bad. The income tax system is very progressive. My post was that the amount that the upper-tier earners pay has jumped largely because the upper-tier earners make more than they used to.
- steve boyington, Chester

The real issue at hand here is the fact that the reason so many people have no tax burden is because they are in low paying jobs, probably due to the rich shipping the good paying jobs overseas where they can pay pennies on the dollar for the same work.
- anna, manchester

Probably, don't you know?

So are those people doing the work for pennies on the dollar exploited or greaful for the chance to earn a income? We made our choice in this country I'd say. Manufacturing jobs we were told should support a familly of four. We could not manufacture at that price and keep people buying a product they could no longer afford or were unwilling to pay the new price for them. We all bargain shop and even you would like to make a profit. I'd be happy to tell you how much that profit should be but I'd rather leave that up to your customers to dictate to you.

If I could get a job right now part time manufacturing to supliment my income I would. As a matter of fact I'm heading to the job section now rather than post any more replies. Nanny and myself needs more tax money so I'm off to do my part and work for nanny. I mean myself even though it will put me in a higher tax bracket.
- Deb, Derry

Barack Obama must know these statistics quite well already. We already have an extraordinarily progressive tax structure. So called "progressives" (the new word for what used to be called "tax and spend liberals") will probably criticize that this data doesn't include payroll taxes (social security, and Medicare) in order to try to muddy the waters. While true, that does not invalidate the basic truth that income tax rates are already incredibly progressive. It will be interesting to see how Obama spins and twists this "inconvenient truth."

Obama's politics of "hope and change" is a scam, empty words. In fact, his campaign has a calculated strategy of class warfare -- attacking a small percentage of the electorate, while promising to enrich the rest. His plans to hammer the rich with substantiall higher taxes will do substantial damage to our economy at a time when we really can't afford that.

He likes to create simplistic boogeymen to blame things on: Bush, the rich, oil "speculators", and Exxon Mobil, for example. Maybe given his recently declining poll numbers, people will see that Barack is just a "typical" politician, but more crass in his demonization of the straw men bad guys he has created.

How about those subsidies to the ethanol industry, Mr. Obama, Junion Senator from Illinois?? Where do you stand on the ethanol industry, oh wise one?
- Ditmar Kopf, Hollis

To Steve and Anna, when did it become bad to be rich? The underlying problem indicated in this editorial is that 40% of the population pay no income taxes and guess what, I bet the follow up story could show that 100% of the takers of welfare programs are in that 40%. So what we get is a large group of people that pay nothing but get full benefit, and then a small amount of people that pay a lot and get nothing!

Again I ask why do we punish a person for achieving the alledged American Dream?
- Rick, Manchester

Charlie might have a point, but it is hard to tell when his use of statistics appears to be selective. One major question I have is what Charlie means by people who pay "no tax at all." Are these people who really pay no taxes, or are they people who pay no Federal Income Tax but pay Social Secuirity and Medicare taxes, as well as state and local income, sales , and property taxes (which would, in turn, reduce their Federal Income Tax liabilities). If it is the latter, then Charlie has proven nothing.
- Paul, Concord, NH

The real issue at hand here is the fact that the reason so many people have no tax burden is because they are in low paying jobs, probably due to the rich shipping the good paying jobs overseas where they can pay pennies on the dollar for the same work.
- anna, manchester

the average rate paid by the bottom 50 has declined from 3.2 to 3 from 2002-2006. The income level for 50th percentile increased from 28,600 to 32,000. Cut off for the 90th percentile increased from 92,600 to 108,900.

By the way these income numbers are for the adjusted grioss income number from the tax form, it doesn't include some things, notably government transfers or employer paid health insurance. Of social security, it includes only the taxable portion, a very small amount for typical taxpayers.

steve is also right that the wealthiest pay more as their share of total income rises. But it remains that they pay 40% of taxes with only 22% of the income.

Breyer is right, a rising tide lifts all boats. Incidentally the quote is attributed to John Kennedy (and to an Irish Prime Minister). Kennedy used it to explain his across the board tax cuts, the model used for Reagan's. Jack Kemp was fond of repeating it often when he was politically active. Kennedy proposed cutting all the tax rates by about 30%. The top marginal rate of taxation was to be cut from 91% to 65%.

Kennedy's explanation is compelling and relevant even today. Read his speech here: http://www.presidency.ucsb.edu/ws/index.php?pid=9057&st=&st1=

The tax cut talk starts at about the tenth paragraph. It's striking. We ought to assign it to those running for federal office with the simple instruction "discuss."
- charlie, canterbury

Another issue not raised by Charlie is the income mobility data released by the IRS. A large percentage of the top 1% are "new rich" not inheritors of fortunes. There is a rapid turnover of the richest Americans so that the people who started in the top 1% of income in the 1980's and 1990's suffered the largest decline in earnings of any income group over the next decade according to the Treasury Department. In America, it's hard to stay on top.
Another interesting tidbit, the # of Americans who declared adjusted gross income of $1 million doubled from 354,000 from 181,000 in a mere 3 yrs after the tax cuts.
Finally, taxes paid by millionaire households more than doubled to $274 billion in 2006 from $136 billion in 2003. So the next time the lefties claim the tax cuts were for the rich, point them to the facts. The tax cuts actually soaked the rich.
By raising taxes as Hussein wants to do, the rich will only find more tax shelters, work less, and earn less thus reducing the amount of tax revenues to the treasury. During the Carter years which is where Obama wants to take us(high tax rates), the rich only paid 19% of all income taxes vs 40% today.
As I stated before in other posts, liberals don't care about facts they only care about control on our lives. I am sure they will tap dance around the facts but it is hard to dispute the IRS data.
- Kyle, Bedford

This column reminds me of the new Wal-Mart in town that puts the Mom&Pop store out of business...and then hires back Mom & Pop to work for them at $0.90 on the dollar. A similar argument could be made that Mom&Pop should be grateful that Wal-Mart is giving them a job.
Personally, I think a rising tide should lift all boats, not just the yachts.
- Breyer S., Manchester, NH

Thank you for the insight, this article has changed my thinking but what about the percentage that do not even file, what is that percentage. What can be done so that everyone pays their fair share.
- Lisa Smith, Palm Coast, FL

This is the reason why the FairTax makes more sense and is more "fair" that the Robin Hood plan. With the FairTax, those who have more who spend more would do so based on consumption - not some political hacks whim. Of course, that says nothing to those who control the budget - or say they do. We would still need actual, real time cuts and controls.
- R, Raymond

Good article, Charlie. One thing you could have done is list the quintile numbers for income. Example: maybe in 1990 the 10/30/50/70/90 earners made 18,000 32,000 50,000 95,000 and 155,000 but now they make 16,000 30,000 45,000 85,000 and 250,000. This would help explain why the top pay more taxes; their incomes have increased a lot. It would also help explain why the bottom half pay less; the wages for the bottom half have dropped.
- steve boyington, Chester

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"Charles M. Arlinghaus: School funding should be on New Hampshire's radar"
By CHARLES M. ARLINGHAUS, Op-Ed, Columnist, The New Hampshire Union Leader
August 20, 2008

One of the travesties of the 2006 election was that it quashed an opportunity to do something about education funding, not because of the election's result, but because of the way it was conducted. The current election is again missing the opportunity, but it needn't be so.

By now, the average citizen is sick of education funding. In fact, you probably stopped reading this piece two sentences ago, thinking "people talk about education funding all the time but nothing ever happens; no crisis, no change, no impact on my life."

For more than a decade, politicians of all stripes have raised an alarm about this approach leading to an income tax or that approach hurting our education system. Yet every two years, the Legislature passes some variation of what it did before, not significantly different to the average citizen, and examined in detail only by the big winners and losers in the how-much-did-I-get-on-this-spreadsheet game.

Seven years ago, then-Gov. Jeanne Shaheen pushed a sales tax to fund the familiar system. Businessman Gary Levy and the retail merchants sounded the alarm, and the sales tax was defeated predictably and easily. Since then, the funding mechanism has been the same.

As the 2006 election approached, the latest court case had some calling for a constitutional amendment. It had failed routinely for 10 years, but supporters felt the current court had ruled out some reasonable approaches and thereby increased the numbers who would wish to do something different.

We know now that after the election, Gov. John Lynch would make an amendment the centerpiece of his approach. However, when presenting his case to the people and campaigning for his governing mandate, he repeatedly claimed opposition to an amendment, opposing the Senate's attempt to pass one after the court decision.

Sometime during the campaign or shortly thereafter, he changed his mind and decided a sensible amendment was needed. It was too late. He wanted to pass an amendment after the election, but hadn't campaigned on it at all. The moral authority and popular support to be gained from the people's vote wasn't there. Members of his party could say "this is not what the election was about" and the opposition, which is predisposed to oppose, need not fear they are going against the will of the people.

I don't mean to suggest that either John Lynch or Republican candidate for governor Joe Kenney campaign on an amendment. Large quantities of both parties support an amendment, but the amendment I expect they will pass next year won't be on the ballot before 2010. We need to do something before then.

In recent years, the Legislature does not what it thinks is right, but what it thinks will please the court. This year's much-ridiculed funding plan that takes from the poor and gives to the rich is defended by some supporters as the best we can do and still comply with the court. And yet one part of this plan limits your supposedly constitutional aid to a percentage of what you received under the previous formula, which was considered unconstitutional.

These mind-numbing gyrations are not caused by the Constitution. Rather, they are a result of trying to do something practical that also contorts to the court's latest interpretation of the Constitution. Each new court decision brings a new understanding of what the court seems to be allowing and seems to be prohibiting.

Gov. Lynch is a good example of the gyrations this causes. He opposed an amendment in his first term because a sensible plan didn't require an amendment. Then the court issued a new ruling, and Lynch supported an amendment in his second term, not because his opinion changed about what was constitutional or the right thing to do, but because he felt the court was now disallowing what he thought was appropriate.

Let's stop trying to read the court's tea leaves. In this election, both Gov. Lynch and Sen. Kenney should tell us what they think the right thing to do is. After the election, that plan should be passed with a detailed explanation of why the plan satisfies the words of the Constitution itself.

A plan passed with an earnest explanation of its constitutionality will have great authority. The court itself does not have the benefit of the struggles that our elected officials go through. The next court decision should be about a plan we think is both constitutional and a good idea, not a mediocre plan the court might allow.

-
Charles M. Arlinghaus is president of the Josiah Bartlett Center for Public Policy, a free-market think tank in Concord.
-
Readers' COMMENTS:

New Hampshire needs to pass a Constitutional Amendment that gets the New Hampshire Supreme Court out of education. It could say the New Hampshire Supreme Court may not decide how money is raised to pay for education and what the money is spent on. It could say education is a legislative issue and not a judicial issue.

The Federal government should allow money to follow the students. The Federal Government should make it easier for "free exercise" of religion (Amendment 1 of Constitution) to take place by allowing public money to go to religious schools belonging to many different religions. Education is a national security priority and should be treated as such. The better educated our soldiers and workers are the better our War Capabilities. The better educated our workers are the higher per capita income is likely to be if taxes are not high. Federal income taxes on individuals and businesses should be reduced to make it easier for families to pay for private schools, colleges, and other things.

The Federal Government should be providing State governments and local governments with block grants for education that have no strings attached. There should be fewer Federal mandates and State mandates dealing with education. We need more competition and innovation in education.
- Ken Stremsky, Manchester, NH

What is to be done?

"What is to be done?" is the theme of this column, and the name of a pamphlet written by Lenin. http://en.wikipedia.org/wiki/What_is_to_be_done

It is not the State's job to fund education. Education is a local responsibility, if we are to have public schools at all. Do you have any children?

The answer is: nothing. Let markets work.
- Steve, Manch

I would only agree with S.L., from Hudson, on the condition that I am no longer required to fund Social Security, welfare, medicaid, federal housing, or any other state or federally supported handouts for which I am not currently a participant.

I want to fund my own retirement, choose my own competitive health care plans, now and later in life, and would then willingly invest my money in my childrens education as S.L. suggests.

But since I am essentially paying tuition out of pocket for each child I must also insist that I no longer be required to send my kids to the government run shools. It is my money. I should be free to choose to send them wherever I like, and any such plan must permit me to do so or it is unfair to me and my children.

If we can agree to those terms S.L., I will support your plan willingly.
- Steve, Merrimack

Reading this I'm still unclear what the issue is here other than the courts ruling some thing to do with funding is unconstitutional.

It's my guess that the system worked until the last decade until government chose to tweak it. My property taxes which fund the schools doubled and yet there is a short fall of funding? The state also got involved in gambling to fund the schools and there is still a short fall.

I'll take a guess and say our leadership is not up to the task of managing the people’s money as if it was their own. I'd love to see how many state jobs have been created in the last decade and how many pensions were promised in them. All of which is money that could have been used for the schools. We do not have children of our own, and do not mind helping ensure the children get a good education, but I expect the money to be used wisely and for the purpose of teaching.

It seems today everything from social security to our schools are mismanaged and the same ones doing so want to get government involved in health care. Only government can create the problems and then claim to be our savior from the problems at the same time. As for our courts there seems to be a trend of interpreting constitutions how ever it suits the appointed judge by their political counterpart rather than what should be plain language in the constitution itself, or the politicians themselves trying to twist the meaning to suit their needs. It’s amazing how well the constitutions worked for so long until recent times, and now suddenly our leadership has issues with how it’s interpreted. Maybe the issue is not the constitution but the leadership we elect?
- Deb, Derry

School funding should be provided by those who have children. Those people who don't have children should not have to pay an equal amount. Let the heaviest burden fall to those that use the school systems. The more you use the more you pay. Include those that are not property owners. Discontinue school taxes for people 60 years old and older provided they they do not have children in the public system.
- S.L., Hudson

For 11 years my wife and I worked as volunteers for an elementary school here in Manchester. Twice I sat with facilty to discuss the school improvement plan and it was approved both times. Then I spent three years working on the MANSD master plan with a team of professionals. Again with input from staff, administration and parents we put together a plan that helps children expand their potential and become lifelong learners. Then I assisted the elementary school with the purchase of a resource kit for everyday math. Now it is going to be used district wide to again help students grow. Through local control, parental involvement and educational choices, children can receive learning initiatives that unlock their potential and help them become lifelong learners. Maybe Gov. Lynch and Sen. Kenney should look into such things that are going on at the schools. It just might 'teach' them something.
- Robert M Tarr, Manchester

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"Charles M. Arlinghaus: Conventions are tax-funded indulgences"
By CHARLES M. ARLINGHAUS, Op-Ed, The NH Union Leader, August 27, 2008

This week and next, the news media will be preoccupied with two of the biggest wastes of time and money in American politics: the Democratic and Republican national conventions.

While at one time national political conventions may have served a purpose, they are now useless anachronisms that simply waste millions of dollars of taxpayer money for the indulgence of political insiders.

The Democrats and the Republicans will each receive a check for $16.82 million courtesy of you and me. In addition, state and local taxpayers in Minnesota and Colorado will contribute tens of millions of dollars for the dubious privilege of having their city disrupted by the descending hordes of delegates, media and camp followers. In 2000, state and local taxpayers funded $77.6 million of the two conventions, according to the Campaign Finance Institute.

At one time, the convention was a useful reform that opened the political process. In the early years of our country, party elders, usually in Congress, would choose the presidential nominee. During the age of Jackson, delegates from around the country would come together in one giant meeting and choose for themselves.

At one time, party conventions were a coming together of people who couldn't talk to each other otherwise. Party organizers had to communicate by mailing letters back and forth. Talking to someone in another county was difficult; it was even harder to reach another state.

The telephone may have been invented, but a long distance phone call was a great expense and very unusual. As recently as 20 years ago, people would wait until the rates went down at 11 to make brief long distance calls. Unlimited long distance was unheard of.

Bouncing back and forth around the country by train was time consuming, and commercial flights were significant expenses until airline deregulation lowered prices.

In that climate, a convention was an important and unique gathering. It was a critical part of the presidential selection process. That, however, has changed. Organizers are in constant contact via e-mail, cell phones, Blackberries, unlimited long distance calling and relatively cheap plane tickets. Conventions aren't part of the organizing process.

In addition, conventions are no longer open contests. No convention since 1976 has decided anything. Even then, Gerald Ford technically didn't have a clear majority, but he was so close and so obviously the next nominee that Reagan was reduced to throwing Hail Mary passes that had almost no hope.

Conventions now are carefully choreographed four-day parties that are a nice reward mostly for insiders and party workers. Nothing is left to chance. I worked the 2000 Republican convention. Each morning we received the "line by line." Those managing the convention prepared a minute-by-minute description of what would happen -- "spontaneous demonstration at 8:47 to last four minutes."

Television coverage is carefully monitored and delegates and signs moved and adjusted because the limited number of minutes broadcast on national television are the whole purpose of what amounts to a long infomercial. The roll call vote, once a dramatic piece of Americana, is now considered a boring anachronism pushed out of prime coverage except for the final state.

The party platform was once one of the few documents that stated the basic proposals and beliefs of a candidate and his party. Hearing the actual candidate was rare, but the platform was accessible, sort of like a direct mail brochure today. Now, however, the words of the candidate can be heard incessantly on television, in their entirety on C-SPAN and in speeches across the country, again and again. The platform is one document and a particularly unreadable and poorly written one at that.

However, conventions are fun (less so if you're working). Corporations and media companies have lavish hospitality tents, wine flows like water and people compete with each other to see who can throw the best and most exclusive parties. For party faithful, the carefully managed floor rallies can be more energizing and intoxicating than the best political event.

Because the event doesn't really determine anything, taxpayers should not be shelling out millions of dollars to pay for a really fun infomercial.

Let the parties throw a party; it's no skin off my teeth. Let the networks cover a speech or two at the event (or in a nearby football stadium). But why are we funneling $33.6 million in corporate welfare to them for it? Eliminate the subsidy and don't let your state or city fork over another $20 million or $30 million for the great honor of having streets closed and traffic disrupted.

Now we just need to get the Republicans and the Democrats in Congress to take $33 million away from themselves.

Don't hold your breath.

--
Charles M. Arlinghaus is president of the Josiah Bartlett Center for Public Policy, a free-market think tank in Concord.
--

Readers' COMMENTS:

Kevin: I agree 100%
Tom: I'm the Libertarian in Ward 4. Thanks!
- Morey Straus, Manchester, NH

Morey,, what ward are you running in .. I'd vote for ya
- tom, manchester,nh

It's not just the conventions that should be off the dole -- the primary elections should not be conducted with taxpayer funding.

Primaries are how the parties, which are private entities, select their candidates. The parties should be every cent of the associated costs.
- Kevin, Lancaster

Amen!
What a complete waste of time and money for everyone involved!
- Jesse, Orford

I agree with Charles M. Arlinghaus.

Taxpayers should not pay for political conventions. Let the donors to the parties pay for them.

It would be nice if candidates from both parties read the United States Constitution and supported the Constitution or amended the Constitution. Candidates from both parties support many positions that are not constitutional.
- Ken Stremsky, Manchester, NH

Hear, hear! When I am elected to State Rep, I'll sponsor a bill to get the major parties off of the dole here in NH.
- Morey Straus, Manchester NH

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Charles Arlinghaus: "Obama, Palin agree on a reform for NH"
By CHARLES M. ARLINGHAUS, NH Union Leader, 9/10/2008

Barack Obama and Sarah Palin are running on different presidential tickets, but one promising reform proposal unites them and can unite their supporters in bringing needed reform to New Hampshire no matter who wins.

The way politics usually works is that you have to think any idea of the other guy's is necessarily bad. If I think Gov. Sarah Palin is the best vice presidential pick since 1920, I'm supposed to think anything Barack Obama or Joe Biden ever proposed is suspect. If I think Sen. Barack Obama is the greatest Illinoisan to run for President since Adlai Stevenson, I have to look askance at anything John McCain or Sarah Palin ever wanted to do.

Yet Obama and Palin are both trailblazers in the bipartisan movement to make government and its spending as transparent as possible. Their leadership can show New Hampshire a path to needed reforms that will eliminate a big blind spot in state government.

In 2006, Sen Obama together with conservative U.S. Sen. Tom Coburn sponsored and passed the Federal Funding Accountability and Transparency Act. The bill created a Google-like database of federal spending to allow anyone to search government spending. Sen. Obama hailed passage, saying "By helping to lift the veil of secrecy in Washington, this database will help make us better legislators, reporters better journalists and voters more active citizens."

In 2008, Sen. Obama along with Arizona's Sen. McCain (you know, the other guy running for President) and two others introduced a follow-up bill to strengthen and improve the original Web site, usaspending.gov. Sen Obama said, "Whether you believe government ought to spend more or spend less or just spend differently, we all should be able to agree that government spending should be transparent and that public information ought to be accessible to the public."

The federal database is still enormous, but many states have data of a much more manageable size and in more detail. One of the leaders in the state efforts has been Gov. Sarah Palin of Alaska. More devoted readers will recall that I wrote glowingly of her efforts six months ago.

Alaska's Web site has the simple but descriptive name Checkbook Online. As a start, Alaska decided to post every payment of at least $1,000 in both sorted Excel spreadsheets and pdf files, making a very consumer-friendly site. Just google "Alaska checkbook online" and you can look at the file and find out that a state employee named Sarah Palin received $177 for out of state travel. She sold the state jet on eBay, so I guess she has to submit expense reimbursement forms like every other state employee.

Taking the equivalent of the government's checkbook and positing it online for anyone and everyone to access is a great model for any level of government or public agency. It would be helpful for cities and towns but especially for the state of New Hampshire.

New Hampshire is perhaps the most transparent state in the country on the revenue side of the ledger. On Sept. 1, the government posted on a Web site a list of each tax and how many dollars it had raised for the month that ended just 24 hours earlier. Every tax and every dollar is accounted for every single month.

But we have one of the least transparent spending systems in the country. We don't do regular spending updates and share them with the people. In fact, how much our state government spent is calculated only many months after the entire year is over. More regular updates would be useful, especially in years when we are struggling to balance the budget.

Almost every department could run monthly calculations today and provide periodic updates. The formats might not all match, but each department could post its own information. Two years ago, Gov. John Lynch announced this as a priority in his budget address, but budget problems pushed it off the agenda.

For greater transparency to make "voters more active citizens," the governor could decide to set an example and post his office's expenses as a start. Or perhaps the Legislature could lay bare its own spending in the level of detail Alaska provides.

Some reform-minded mayor or board of selectmen could start the process in their towns. Someone needs to start the ball rolling as Gov. Palin did in Alaska and Sen. Obama did in Washington.
-
Charles M. Arlinghaus is president of the Josiah Bartlett Center for Public Policy, a free-market think tank in Concord.
-
Readers' COMMENTS:

Ryan from Manchester said "Can anyone name off changes that former VP's have made in office that drastically changed the country??? "

How about Dick Cheney orchestrating the current war in Iraq? That seems like a pretty big change. Google "White House Office of Special Operations" before you give me your knee jerk reaction.
- Bob, Manchester

Hopefully, the State government and city governments will have the information on a New Hampshire governments spending website.
- Ken Stremsky, Manchester, NH

Yes, that ranking should be a wake up call. Texas has one of the best websites I think. It may be a small stretch to say trailblazer but she went ahead and did it and that's the path I'm suggesting. The checkbook online is not perfect but rather than waiting on perfection she plowed ahead and did something, precisely the trail I want us to blaze.

As for comparing a P and a VP, well I hope it was obvious that I wasn't suggesting anyone use this to make their general election voting decision. I use them because they're both moderately high profile this year for some reason and just saying hey McCain and Obama agree on this doesn't allow one a transition into discussing what the state can do. But in case anyone is having trouble allow me to beg those of of you reading this not to use this column as the basis for making your presidential decision. It is conceivable that there are other issues you might want to use to differentiate between McCain and Obama and between Biden and Palin. Certainly that's my plan.

Ryan, you might want to go back and read the column with all the names changed to Smith and Jones or Coolidge and Truman and see if you can get past presidential politics which after all ought not determine state policy. In fact I may try that myself. I just have to think of someone other than Adlai Stevenson to compare Coolidge to. Maybe John Hancock or John Volpe.
- charlie arlinghaus, canterbury

Why are we comparing a presidential nominee to a vice presidential nominee?
Am I missing something here? As vice president you're not in a position to make drastic changes for the country. Can anyone name off changes that former VP's have made in office that drastically changed the country??? I don’t really think so. Let’s compare apples to apples people. That seems to be the big problem here. McCain can’t hold a candle to Obama. So the republicans used Palin to draw away the attention from McCain and in doing so. People will grow to like Palin and vote republican. Nice tactic. But I think the American people can see through the smoke screen. Sad, really sad.
- Ryan Depalmenary, Manchester

Huh? Senator Obama wants to transfer $850 Million Dollars to the UN to fight 'global poverty'.
(Global Poverty Act)

How does he think he's going to do this without raising taxes on the middle class? Why doesn't the press expose this?

Make that transparent won't you Senator Obama?
- Sue, Manchester

Great column, Mr. Arlinghaus. We pride ourselves in NH on transparency in state government, but unfortunately we don't do a very good job of using the internet to further this. Last year's "State of State Disclosure" report gave us an F and ranked us 47th in the quality and quantity of information we make available to our citizens. An on-line checkbook showing state spending would be a good step to improve our ranking and make government more accountable.

One brief comment. Gov. Palin is not precisely a trailblazer in the movement to put state expenditures on-line. Nine other states do this in some form, and an additional nine are launching their sites in the next few months.
- Michael Marsh, Greenland

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Charles Arlinghaus: "Next state budget crisis debate starts October 1, 2008"
Op-Ed, The NH Union Leader, Wednesday, Sep. 17, 2008

For months we've known that the current two-year budget is difficult and will require continued work to end up balanced. What hasn't been discussed yet is that deliberations for the next budget begin almost immediately, and this budget promises to be even worse.

On Oct. 1, department heads in state government must submit budget requests to the governor. According to state budget law, they must submit at least a so-called maintenance budget that details the cost of doing whatever is in current law. In addition, they submit other requests to improve their operations.

Inside state government, these budgets are often referred to as agency wish lists. These budget requests are usually high because each department head knows it will be cut significantly. Every governor, whether increasing spending overall or cutting spending, makes a lot of noise about how he or she cut millions from the agency requests.

In addition, state budget law requires the administrative services commissioner to prepare for Oct. 1 a preliminary estimate of what each existing tax is likely to raise in the two years beginning next July. Combining the maintenance budgets and the preliminary revenue estimates, she presents what the budget law calls a tentative budget.

Interestingly, this process occurs just as the election is coming. Whether the governor stands for re-election or is stepping down, he must direct the department heads to prepare a budget that may well be used not by him but by his successor.

In most cycles, Oct. 1 comes and goes and no one pays any attention. This year promises to be different. Budgets are about choices, and the next budget promises some very difficult choices.

The current two-year budget will end with revenues about $200 million below the level anticipated by the last budget. Some spending cuts were made, some unorthodox borrowing proposals were floated, and more decisions must be made. But in the end, those decisions were not long-term adjustments. Like almost any post-budget changes, they largely consisted of emergency tweaks and one-time revenue injections.

Because of the shortfall and the need to make changes outside the regular process, in the next budget, the starting point for revenues and spending will be widely separated.

The Center for Policy Studies released estimates that include the last half of the current budget that suggest a gap as high as $400 million for the next budget depending on the scenario. That is, if the law isn't changed, spending would be about $400 million higher than likely revenues. My organization, the Josiah Bartlett Center, will release a report soon that suggests a starting discrepancy of about $300 million.

Knowing how bad things are going to be, many will want to examine the government's own revenue estimates and the agencies' descriptions of what spending happens if no changes are made. The tentative budget is not directly comparable to other estimates, but taken with other reports, it will start a budget debate that can begin while people are paying the most attention -- during the election.

In many ways this debate is healthy. New Hampshire has at least some small budget crisis every two years (if it happens every two years maybe "crisis" is the wrong word). That continual tension requires lawmakers to examine spending priorities and revenue structures during each budget debate. That's healthy.

One goal should be to have more people of all philosophical stripes examining the budget. Recently, I held a seminar for the Josiah Bartlett Center to help anyone running for office and anyone else interested to learn more about understanding the budget. It is important that people can find their own information (rather than just believing everything I write, although that's still your second best bet). We had hoped for 20 to 30 people. We got 140. There is a huge thirst for information.

The response has led us to plan two or three more seminars. People want to know more about the state budget. They want to learn for themselves. It used to be enough to just leave everything to Rep. Neal Kurk or some other smart budget expert, but increasingly people want to know more. This, too, is healthy. More eyes mean more ideas for cutting or tweaking or fixing, whatever you prefer.

The budget debate is already beginning. Gov. John Lynch, although in the middle of an election, has required department heads to submit not just the maintenance budget and a wish list but to submit a level-funded budget and a budget with a 3 percent reduction. This is a good first step.

In the end, a small cut probably won't be enough, but it's a good place to start. Oct. 1 is the very beginning of the process, but it isn't too early to start paying attention.
-
Charles M. Arlinghaus is president of the Josiah Bartlett Center for Public Policy, a free-market think tank in Concord.
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Readers' COMMENTS:

Another excellent column from Mr. Arlinghaus. It is indeed going to be a very difficult budget, and its difficult to understand how the events in the financial market that we've seen in the past 10 days will affect the larger economy and therefore state revenues in the next biennium. If Mr. Arlinghaus can help shed some light on that before the legislative budget process gets started, it would be good for all involved,

It is probably not a serious comment to say, as Mr. Bettencourt does, that John Lynch and his Democrat legislators caused the national economic crisis that we are in. It gives the Governor and NH a little too much credit in my estimation, but I guess it's election time and silly things get said by some people. Perhaps Mr. Bettencout doesn't understand that Mr. Arlinghaus is talking about a potential deficit in the next budget, which will not be considered until January.
- Mike Marsh, Greenland

Way to keep the budget cannard alive. I think that comes from the French like Palin's glasses. Perhaps this is the fois gras version in which you try to force feed a goose to make its liver explode. Perhaps the part you don't like is the budget transparency passed this year so that Republican controlled houses in the future are unable to hide things tacked on after the session ends like in the past. At the one end, (the past fifty years), Republicans have said that there will be no state income for the next biennium so we should cut out all government, Dems say there will be huge increases in government income so we can pay for bridges, army, post office, kitchen sink etc. and the result lands somewhere in the middle. Except the long term result is that New Hampshire is 48 out of 50 states for tax burden. In exchange we haven't paid for bridges, roads, schools etc. which are now falling apart. Did you get what you wanted? I think we should actually paint red lines on bridges as see who goes across. Perhaps we can get local volunteers to learn about paving.
- Robert Mann, Deerfield

Charlie:

Why did Gov. Lynch not show such fiscal constraint when he signed into law a 17.5% spending increase? At the time he called the budget, which relied on irresponsibly high revenue estimates and was the largest budget in state history, “fiscally responsible.” You’re correct, spending cuts are a step in the right direction, but this is a crisis of Lynch and his Democrat legislators own making. There is no way around this...
- D.J. Bettencourt, Salem

Level-funded budgets and a budget with a 3 percent reduction IS a good place to start sure. How about some transparency in our state government? How about we publish online the two year budget for tax payers to access and give comments on such spending? This next budget cycle should start at looking to do a reduction in spending and take a closer look at tax payer subsidized items. Another look at revenues and their projected growth in the last five years will help to estimate how the state government can better utilize spending without more bonding. Start now looking at ways to consolidate so the budget cycle after this one can continue to reduce our deficit spending. Smaller government, lower taxes and less bonding. That is the right thing to do.
- Robert M Tarr, Manchester

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Charles M. Arlinghaus: "NH should be paid for oil drilling off Hampton Beach"
By CHARLES M. ARLINGHAUS, Op-Ed, NH Union Leader (Online), September 24, 2008

If we drill for oil in New Hampshire and off our coast, why should all the money go down to Washington? The new drilling plan coming out of the U.S. House ignores the rights of states and creates incentives to lock oil under the ground instead of drilling it and reducing our dependence on foreign oil.

In the last year as gas prices approached $4 a gallon, more and more Americans sought an energy solution that included drilling for and using American resources to save money and reduce the extent to which we rely on oil from the Middle East.

In 1985, America produced about 9 million barrels per day of oil and imported an additional 5 million barrels of crude oil and other petroleum products. Today, domestic production has declined to about 5 million barrels and imports have skyrocketed to about 13.4 million.

While gas prices were very low, few Americans paid any attention to increasing oil production. There was a regular debate over drilling in the Arctic, but it generated little passion outside of Alaska and the caribou fan club communities. Most people assumed we had developed most of the domestic oil and had little left to find, or not enough to make much difference.

It's amazing how paying $4 for gas can concentrate the mind. Suddenly, oil has our attention. It turns out that there are billions of barrels of oil currently off limits because of congressional action. According to the Department of the Interior, offshore domestic reserves on the outer continental shelf alone are about 86 billion barrels, with an additional 420 trillion cubic feet of natural gas. For comparison, total domestic production in 2007 was less than 2 billion barrels.

Almost everyone agrees, at least in public, that drilling on the outer continental shelf ought to be allowed to some extent. The sticking points are how close to land it should be and what to do about state compensation.

Generally speaking, oil rigs can't be seen when they are more than 12 miles offshore. It is logical then to allow drilling at a minimum beyond that zone and out to the 200 mile limit. Of course, the farther out from shore, the more expensive drilling is. More oil is also thought to be available within 100 miles of shore than beyond. Yet the energy bill is only willing to concede drilling beyond 100 miles.

Within 50 miles, no drilling would be allowed. Between 50 and 100 miles, states would have to approve any drilling. But they would not be allowed any revenue sharing whatsoever, thus eliminating the incentive to allow drilling.

This abuse of the states is an exception to established policy regarding oil revenue. Onshore drilling on federal lands requires 37.5 percent of the royalties to be shared with the home state. In 2006, after a struggle that dates back to the Truman administration, Louisiana politicians finally secured parity for offshore drilling in "federal waters." But the new bill would eliminate federal revenue sharing. We'd have one policy for the areas off Louisiana and Texas and a different one for the New Hampshire coast.

Abolishing any federal revenue sharing for the areas of the continental shelf not yet open to drilling can only be designed to prevent drilling while pretending to allow it.

Consider the case of Seabrook. Many people agree that nuclear power plants are fine in theory, but they are somewhat reluctant to live near one. In the case of the Seabrook plant, it generates millions of dollars of property tax revenue for the town. We didn't decide that it was a New England resource and therefore should not generate taxes for the town. The people of that town who have to deal with the plant receive millions of dollars of tax revenue. They live there; they benefit.

If we were to drill off the coast of Seabrook, in the waters off the coast of New Hampshire, it would be only sensible that the royalties go not entirely to Washington but be shared with the state. After all, if they drill in the White Mountain National Forest on federally administered land, three-eighths of the royalties would go to New Hampshire. Eliminating revenue-sharing when it already exists can only be designed to increase local opposition. A sensible plan must not abolish current states' rights.

Already, some oil consumption is being eliminated by people not driving. Decreased demand is part of the solution. But replacing a large part of the imported oil with domestic supply is equally important. We shouldn't continue to import so much oil when much of it could be replaced with oil we already have. Eliminating the federal effort to trample on the states is a good first step.
-
Charles M. Arlinghaus is president of the Josiah Bartlett Center for Public Policy, a free-market think tank in Concord.
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Readers' COMMENTS:

Tom, why are there warning sirens all over the Seacoast? The same reason there is a Decommissioning Fund that kicked in the moment Seabrook I began generating. These were political decisions; when liberals stopped being able to block the nuclear plant, they attached conditions designed to give us the false sense that nuclear power was expensive and liable to explode.

Jeff, if we drill more, OPEC won't drill less; that means they would forego revenue! In contrast, if we even show the will to drill more, OPEC will drop their prices. If we were a big producer, we'd be the world's only stable producer, and Arabia would have no export except terrorism.

Mr. Arlinghaus, the scary prospect of swimming around oil derricks at Hampton Beach is a "bete noir" that insults our intelligence. The assumption that oil rigs must be out of sight--like the assumption that they can't exist in the Alaskan wasteland--is a concept of SACRED GROUND that comes from the environmentalist RELIGION that has been forced on this nation.
- Spike, Brentwood NH

Robert, stick to facts that you are familiar with such as socialism, communism, Marxist theory and leave these important topics to the adults. If we really only have 3% of the world's proven reserves, then why are you so opposed to allowing our private oil companies the ability to explore for more. Oh, you hate private business.

Here is a link to review.

http://www.ibdeditorials.com/IBDArticles.aspx?id=299977602247481

An Energy Department study states that we have up to 2 trillion barrels of oil in shale deposits or 7 times the proven reserves of Saudi Arabia. Just google Green River Oil shale formation and check out the links.

Jeff, your theory doesn't hold water. If we increase drilling here, it creates excellent high paying jobs and means we are less dependent on Opec. They can lower supplies if they like but that will mean less control of oil on the world market. I presume the opposite will happen. They will increase supplies in order to sell oil presently at higher prices before the glut of new oil hits the markets in the future. Thus driving down prices now. Plus in the near future we won't be sending 700 billion a year to foreign nations and keeping that money in the states. I agree with having more renewable energy supplies but wind, solar, and geothermal makes up less than 1% of energy supplies currently and the department of energy states by the year 2030, we will need another 30% of energy supplies to keep up with future demand. Thus, we need a combination of renewable and fossil fuels to keep energy prices low for our economy.
- Kyle, Bedford

let me try in my own sloppy way to respomnd to Thomas (although MIB did a fine job and he doesn't need a proofreader).

1. Indeed unlikely to produce oil in months rather than years. I don't suppose that NH can expect bazillions (not a real number) of dollars but we ought to drill off the coast of some states even if it takes 7 years and that state ought to share in the royalties even if it were Massachusetts.

2. I paid 3.499 today and while that may not be historically high, I was supposing that prices at that high historically, my point is that people (other than you of course) think they're high and have changed behavior and thinking as a result. Maybe they shouldn't have but they did.

3. I'm certainly not opposed to seeing an oil rig on the horizon as I cavort in the surf but some are and would prefer they be ought of sight. All a matter of taste of course.

4. I'll need to rethink whether people agree in theory or they agree in practice. What may be likely is that those who agree in theory (and let's start by assuming that that set is smaller than the set of all people) includes some who prefer it be located elsewhere. I suppose we could both agree that of the people who agree in theory that we need nukes (however large or small a set that it), a subset would prefer it be located elsewhere.

I should warn you lest you tax your arteries by attemting to plow through another column of mine that I don't anticipate making style changes or hiring a proofreader. Happy to have you point out any typos or erros in syntax (as opposed to a cigarette tax hike which is an error in sin taxes -- quite different) but for the sake of your sanity, if the sloppy messy dirty ugly horrid silly style is off putting, you may want to give me a pass next wednesday. However, if you can stomach it, please drop in again. Its nice to have comments and thoughtful discussion if you can manage to wade through my turgid prose. I need to mention Pippi Longstocking more often, I think softens people in the same way as meat tenderizer.
- charlie arlinghaus, canterbury

Drill, Baby, Drill!!!
- Rick, Hampton

Tom,

1. Charlie is trying to draw a connection between NH residents and, say, FLA residents when it comes to a state's rights to royalties.

2. Gas in Boston in January of '07 was $2.25 a gallon. Our economy has inflated that much.

3. The sight of rigs off of the shorline is an issue in Congress with states like NJ and Florida opposing rigs because it would effect tourism (beaches). Do you watch C-SPAN? That is why Senators Menendez and Nelson have been so vocal in their opposition.

4. People still fear nuclear power. They think of Three Mile Island as a catastophe, not as an example of effective containment. In practice, people are concerned about waste.

The rest is just plain petty.
- MIB, Kingston, NH

I've wondered what Robert does for a living (assuming he's employed). I would have said teacher, or professor, or maybe even community organizer. But now we know he's an exploration geophysicist with particular expertise in seismic analysis, structural modeling and gravity and magnetic interpretation. How else would he know that we don't, won't, haven't and can't have enough oil to do anything to reduce our dependency on imported oil? With those kinds of smarts, I can only hope that President McCain appoints him to a special oil-exploration task force with Vice President Palin.
- Rick M., Portsmouth

Urrggghhhhh!

Domestic Drilling is not the answer! I am just glad Washington does not listen to the alarmist's in the US!

If we increase domestic drilling then OPEC will just decrease drilling. The cost of oil will continue to skyrocket! Just think, if oil doubles again they can produce have the oil and make the same amount of money.

If we increased our dependance on RENEWABLE energy we could then get by with much less oil and have enough here in the US to meet our needs. At that point it would make sense to drill, but not now.

That is what the oil companies and alarmists won't tell you!
- Jeff, Dover, NH

Arlinghaus' messy writing style does not bolster the weak points being made. I'll knock off a few of them, but taken as a whole the article is very soft

1. Drilling for oil anytime soon off of NH, of all places on all of our coasts, is unlikely. We don't have rigs to drill with and when they come up with a couple they'll put them someplace where the return will be greater. So this dangling carrot of state income Arlinghaus tries to tantalize us with is an illusion.

2. $4 a gallon for gasoline is about as low, adjusted for inflation, as any other time in the last thirty years.

3. Why would rigs being visible, if this is so important, matter? Makes no sense if this is a real saving grace, to concern ourselves with aesthetics.

4. People DO NOT AGREE that "nuclear power plants are fine in theory." Not at all. It is in practice that they seem fine, because they run and nothing ever seems to go wrong. It is in theory that they stink: theoretically we could have a HUGE DISASTER. This is why there are fifty foot tall warning siren towers ALL OVER OUR SEACOAST. Does Arlinghaus understand the evacuation plan?

I read all of Arlinghaus' columns and they always suffer from poor composition. Points are made casually and not backed up, and so conclusions that follow are unconvincing. Then I read he's president of
a "think tank." Well he ought to think about hiring himself a proof reader.
- Tom Labrie, Rochester

Charlie says, "But replacing a large part of the imported oil with domestic supply is equally important" continuing the fantasy that we have enough oil available here to do anything to reduce our dependency. Well, we don't, haven't won't, can't. Americans consume 25 percent of the world's produced oil, but our nation holds less than 3 percent of the world's proven oil reserves. So stir up all the wackos again and hope that real change doesn't come. When the going gets tough, the Republicans become socialists.
- Robert, Deerfield

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"Charles Arlinghaus: NH led the way in publicly exposing employees' votes"
The NH Union Leader, Op-Ed, October 1, 2008

Elections are required to be conducted in secret to avoid corruption and coercion. For whom you vote is your business and doesn't have to be announced to your neighbor or your employer or anyone else. That reform is considered one of the most basic elements in keeping elections free from intimidation. However, the principle of private voting is under attack nationally and is already being surrendered in New Hampshire.

A proposal in Washington called "card check," contained in the Employee Free Choice Act, would end the secret ballot for union representation elections. New Hampshire did its part to end privacy by passing the same provision for public employee labor elections in 2007.

A few hundred years ago, there was no guarantee that your vote was private. An oral ballot required you to state publicly for whom you were voting. In some places, newspapers would even publish a complete list of every voter and for whom they voted. You could check out the newspaper and see that the Johnsons had both voted for candidate Smith.

A voyeuristic interest in your neighbor wasn't the problem; the possibility of intimidation was. Reformers as early as 1600 saw the potential for abuse and began a campaign to make voting secret. An obvious concern was that an employer could make sure each of his employees voted for the candidate he wanted them to or fear retribution. In England, aristocratic interests felt that voting in secret would eliminate some of their influence over people and so opposed secret ballots.

Reform took hold in Australia in the 1850s and spread to the United States as the Australian ballot. People voting in secret could express less popular opinions and defy the interests of wealth and power. To this day, we insist that elections in emerging democracies cannot be considered free unless the ballot is private to keep it free from coercion and intimidation.

In 2004, the New York Times worried that military ballots sent by e-mail would not be secret. Their concern was that soldiers would feel intimidated that higher-ups might "learn their political choices and hold it against them." In a free country, a secret ballot is a critical right. A general should not know how the privates voted.

When the rules for labor union elections were developed in the 1930s, the notion of a secret ballot was considered critical. The system is designed to protect secrecy. If enough workers sign a petition, the federal government holds a secret ballot election. Neither the employer nor the union nor anyone else ever knows who voted for whom. The ballot is secret. In the 1930s, the decade in which Ford Motor Co. police beat up Walter Reuther and his United Auto Workers colleagues in the Battle of the Overpass, freedom from employer intimidation was considered paramount.

The secret ballot protected employees from intimidation from their employers. Signing a petition was merely allowing an election. The actual vote was secret.

The card check bill currently being pushed nationally would allow the secret ballot to be bypassed. If a union were able to gather enough signatures, there would be no secret ballot to see if people's private wishes were the same as the wishes they expressed when a colleague or an organizer asked them to sign the card. You can't privately oppose a union because to sign or not sign is the vote.

It is the equivalent of having the newspaper publish the names of everybody and for whom they voted. So far, opponents of the secret ballot have not been able to get their bill through Congress.

In New Hampshire, the right to a secret ballot is not held nearly as firm. For public employee elections, the current Legislature passed and Gov. John Lynch signed a bill in 2007 ending the need to have secret ballots.

We can all see the obvious potential for corruption in this sort of open ballot. We all understand why the English have to be able to oppose their king or queen. We see the need to vote differently from your employer without him knowing about it. No one would dispute the New York Times' contention that the voting preferences of soldiers must be kept confidential from their higher officers.

Even in terms of union elections, we agree that the process of decertifying a union must maintain a secret ballot. Employees voting to possibly end union representation must not be intimidated by their employer or by the union to keep its position.

It is also bad policy and anti-reform to eliminate the secret ballot when deciding whether to have a union. Our governor and majorities of both houses of the Legislature saw things differently and removed a protection for public employees. Congress should ignore their misguided example and keep all ballots, including union ballots, free and private.
-
Charles M. Arlinghaus is president of the Josiah Bartlett Center for Public Policy, a free-market think tank in Concord.
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Readers' COMMENTS:

Perhaps Mr. Arlinguas is figuring out truth verses fiction?

Apparently not, but his readers have.
- Peg, Concord

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The New Hampshire Union Leader - Letters, Friday, October 3, 2008, Page A7

"Arlinghaus misleads on employee choice act"

To the Editors:

Unfortunately Charles Arlinghaus did NOT do his homework and read the legislation before misleading the public on the Employee Free Choice Act.

In his October 1, 2008, column (above), he is clinging to the notion that democracy and free choice start and end simply with a secret ballot. Yet under the current Labor Board "election" process, workers wanting to form a union have to go through a process resembling elections in the old Soviet Union rather than those here in the United States.

Employers plaster the workplace with anti-union leaflets, while banning employees from doing the same. Supervisors frequently take workers aside for intimidating one-on-one "meetings" where they are given false information about the union.

Even their job security is threatened: 30 percent of employers faced with an organizing effort fire workers for their support of a union. This has to stop.

These tactics are illegal, yet regularly take place in the secret ballot union "election" process. If a party is not allowed to campaign freely and without fear, there is no free choice. That is why reform of our unfair labor laws is needed. The Employee Free Choice Act will give the 60 million workers who want to join a union a fair and direct option, so they can earn better wages, have access to health care, protect their job security and achieve the American Dream.

MARY BETH MAXWELL
Executive Director
Americans Rights at Work
Washington, D.C.

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"The state budget is in trouble"
By CHARLES M. ARLINGHAUS, The NH Union Leader, October 8, 2008

If politicians are to be believed, the state is running both a surplus and a deficit at the same time. In the same week, Gov. John Lynch asked his department heads to cut millions of dollars from the budget, and the Senate president said on the radio that we're running a surplus. They can't both be right, can they? Well, actually they are, which is a good symbol of how difficult the budget is to understand.

The current two-year budget has a problem, but some of its individual components are fine. The first half of the budget turned out OK, but the second half is a disaster.

Overly optimistic revenue estimates created a large deficit. At the time, Republican revenue expert Rep. Norm Major warned that the revenue estimates used to balance this spending were at least $100 million too high. He was dismissed as a pessimist. Interestingly, time has proved him to be something of an optimist. First-year revenues ended up $71 million below budget projections. Second-year revenues are on track to be more than $200 million below projections.

So the budget problem is a tale of two years. The problem in the first year is much smaller, with most of the pain delayed until the second year. In addition, we started the budget with $61 million that should have been put in the state's savings account, the rainy day fund, but was kept available as a cushion in the budget.

Because we start the budget cycle with the cushion, the first budget year, which ended in June, ends up looking pretty good. Between the $61 million extra and some modest spending cuts, the state was able to spend $44 million more than it raised, leaving what counts as a surplus under state rules of about $17 million. So, fiscal year 2008 had a $44 million deficit, but because we had extra money for a cushion, it counts as a surplus.

For the 2008-2009 fiscal year, the one we're currently in, the situation is much worse. First, the budget called for spending $12 million more than it hoped to raise. Second, revenues are on track to be at least an additional $200 million below what the budget expected and needed. The governor had proposed $30 million of cuts and an additional $40 million of bonding to erase the deficit. He'll need to find an additional $140 million to $160 million.

The obvious place to turn is to the massive spending increase that had been described as mandatory. The budget increased general funding spending over the previous two-year budget by 17.5 percent, the largest spending increase in the last 20 years. Supporters of the budget agree that the increase was that high but insist that much of it was nondiscretionary spending. They say they could control only a little more than 3 percent a year, or 7 percent of the 17.5 percent two-year increase.

Yet every budget of the last 20 years faced similar decisions. If spending goes up here, something has to give there. Each of the previous budgets for two decades and six different governors made those decisions and came in with a smaller spending increase. Clearly the increases were never mandatory, as the governor is asking his department heads to cut those very same expenditures.

As bad as the current budget problem is, it looks easy compared to the next budget due after the election. Because each budget builds on the spending and revenue of the one that went before it, problems tend to grow exponentially. Weak revenue growth and an uncertain economy mean money will not be available to sustain normal levels of spending growth.

Next year, if spending were to grow at historical rates, likely revenues would be at least $500 million short. In an election cycle, politicians are most responsive to the people they hope will elect them. Each candidate should be asked if he or she will consider or rule out an income tax. In addition, candidates should be asked whether they would consider increasing other taxes or look to balance the budget during difficult economic times without any tax increases.

We know today that the problem will be as large as it has ever been. Some politicians will want to avoid all tax increases during difficult times. Others will rule out an income or sales tax but be open to other tax increases. Others, concerned about cutting spending levels, will want to consider an income tax. We need to know today what approach our would-be leaders will take. There's no need for a post-election surprise.
-
Charles M. Arlinghaus is president of the Josiah Bartlett Center for Public Policy, a free-market think tank in Concord.
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Readers' COMMENTS:

The solution to the problem is simple: Lynch has had a pass for too long. He can blame the 'economy' all he wants, but it's his irresponsibility that is to blame.

The only solution is to vote him and the Democrat legislature out in '08 and give NH back to the adults.
- Jane Aitken, Bedford

Gov. Lynch's mismanagement of the state's budget is appalling, and what's more appalling is the way people who should know better are giving him a "pass." We have a great candidate for governor, State Sen. Joe Kenney, who is a fiscally responsible conservative and who can set things straight in Concord. Gov. Lynch has proven over and over again that he cannot say 'no" to increasing spending and hiking taxes at the legislature's bidding. It's time for him to GO!
- Stephen Abbott, Manchester

The people who want to pay more tax should set up a fund in Concord and send their donations in. We could then review the donors every week, and thank them over the airwaves for their kind donations, much like a Jerry Lewis Telethon.

Another suggestion would be to send the "we need more taxes" folks out to California to study how residents in such a tax heavy heaven are prospering.
Not only is housing expensive, but income tax is 9.3% on wages over 43k,
sales tax is 6.25 to 8.75%, gasoline prices are some of the highest in the nation, yet the state budget is still in the red. Not only that, all pensions, be it public or private are fully taxed. No wonder people are fleeing the state of California for lower cost of living and lower cost tax burden states.

Once that tax Genie is out of the bottle, you never get it back in. State spending will only increase. Remember when Connecticut did not have an income tax? The pro income tax people said it would solve all the problems. The income tax did NOT lower property or sales tax in
Connecticut. Go ahead and institute and income tax. Your property taxes will NOT go down, only your paycheck will be lighter.
- Paul, Bedford

The state's budgetary accounting rules may show that there is a "surplus" in 2007, but when financial statements prepared according to Generally Accepted Accounting Principles come out, it will show that the state in fact ran a deficit in 2007, and covered it part by drawing on reserves.

If I spend $1000 more in a month than I earn, but pull $1000 from savings to cover it, my budget was NOT balanced that month.
- Ditmar, Hollis

Well Mark, I for one am certainly against an income tax. I make 6 figures and have 5 kids in the school system. We live in a modest sized home so why should we pay any more in taxes than the elderly lady who on social security who lives alone next door. PLEASE people, leave this system alone. I love the "NH advantage".
- Chip Sanders, Wilton

Two more years of Lynch and the Democrats controlling the NH House and Senate and you can kiss our way of life goodbye!
I still say that the GOP in the first two years of Lynch were part of creating his power and loss of the NH House and Senate.
Anyone who can see what the Democrats have done in the past two years should know they are not through.
Income tax - Gay marriage - spending beyond our means - less parents' rights - my goodness, is that what you want?
bnyoung@metrocast.net
- Niel Young, Laconia

The Democrats in Concord have set us on a course to an income tax. If they are not thrown out of power next month, that's what we will have. It's that simple. You want an income tax? Vote Democrat. If not, vote Republican. It cannot be more clear than that. There can be no question that this is the choice that voters face. If people don't wake up, this state is finished.
- Mark, Amherst

My observation is this on state government:

It seems when the economy is good, we don't talk about budget shortfalls, or adding new taxes.

However, when the economy is not doing well and the sheople are hurting due to job losses, poor wage growth, high energy, food, and housing prices,
now is the time to raise the sheoples
taxes. Take more money out of the sheoples pockets when they need it the most.

If you unable to raise the sheoples taxes, then write more I.O.U.'s.

It's the American Way.
- Paul, Bedford

This last session we had 23 new taxes and fees and the largest spending increase in 20 years. What we ended up with is the fiscal mess that Charlie Arlinghaus points out here. Folks we have a spending problem that is being led by John Lynch, Speaker Terri Norelli and Senate President Sylvia Larsen. The only way to change the problem is to go right to the source. You are in control, politicians do respond to pressure. All you need to do is apply it.
- Michael Biundo, Manchester, NH

The answer is quite simple for us voters. Just vote out those who voted for spending increases and vote in those who atleast claim to cut spending and give them a chance.
- Ned, Milton

As a candidate for State Representative for Hillsborough District 12, I oppose all broad-based taxes. I even oppose tax increases. I answered a survey by the Granite State Tax Payers. Four questions were asked and I answered them with honesty and respect to the tax payers of New Hampshire. My opponents scored less than four, four being the highest score allowed. It tells the truth to where the candidates stand with the taxpayers of this state. It's time for real leadership, dedication and responsibility to the people of NH. That is what I can offer those in District 12, and will continue to support smaller government, health/welfare reform and educational choices to help get NH back on track. Your vote on November 4th matters. Please come out and cast your vote. Thank you.

Robert 'Bob' Tarr
Candidate for State Representative - District 12.
- Robert M Tarr, Manchester

Charlie:

What do you think the State should do to increase revenues? What would you like to see be cut?

I think New Hampshire's economy would grow more and the State would take in more revenues over time if the following are done. Have the rooms and meals tax be 5 percent to encourage more New Hampshire residents and tourists to vist our restaurants and hotels. Allow smoking in restaurants to help create jobs in many restaurants and increase rooms and meals tax revenues from many restaurants. If more people are employed by our restaurants and hotels, New Hampshire may be able to spend less money on food stamps and Medicaid. Reduce cigarette taxes by at least 25 cents to encourage more people from other states to buy cigarettes from us and possibly lottery tickets. If more people come to New Hampshire from other states to buy cigarettes, they might smoke them in our restaurants. New Hampshire should spend some of the money it obtains from the rooms and meals tax on buses within cities and buses between cities. If people have an easier time getting to jobs and from jobs via buses, New Hampshire may be able to spend less money on food stamps and Medicaid. Improved bus service may also increase tourism, attract more businesses to New Hampshire, and make the air cleaner. New Hampshire needs to do a better job promoting State Parks and other things via video and audio on its websites and other websites.

New Hampshire needs a Constitutional Amendment that gets the Supreme Court out of education. It should say education is a legislative issue and not a judicial issue.
- Ken Stremsky, Manchester, NH

FULL DISLOSURE-I am a lobbyist for the greyhound track in Belmont The Lodge at Belmont. Stop talking taxes and pass slot machines at the racetracks and you can start talking about solving the problem instead talking about the problem.
- Rick Newman, Nottingham

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"With no income tax, NH fares better than its neighbors"
By CHARLES M. ARLINGHAUS, The NH Union Leader, Op-Ed, Wednesday, Oct. 22, 2008

As state government braces for a budget crisis as bad as any in recent history, we look back to the last recession and find that it proves the strength of what former Gov. Hugh Gregg called New Hampshire's "unique and admirable fiscal history." New Hampshire falls prey to the problems that other states experience, but our enviable tax structure insulates us from the worst excesses and also mitigates the calamitous declines that other states experience.

Budget problems come from a boom and bust cycle of state revenues. When times are good, revenues tend to skyrocket and politicians spend them as if the highest years of growth are average and will always exist.

As the recession approached at the beginning of this decade, Gov. Gregg warned about spending without any regard to an inevitable downturn: "when business is good and help wanted signs are posted everywhere, governments tend to be profligate and don't worry too much about tightening their budgets," he said.

Across New England, states with an income tax saw revenues skyrocket, and they ratcheted up spending as if tomorrow might never come. The Federal Reserve Bank of Boston noted in its post-mortem on the New England fiscal crisis that "on the spending side of the equation, states expanded their spending obligations significantly through the late 1990s and into 2000 and 2001."

In the other New England states, income tax revenues created the engines for government spending programs that would not be sustainable when the boom cycle turned to bust. When the recession came, it was particularly hard for five of the six New England states.

According the Federal Reserve, "rather than just slide into trouble gradually, the states fell off a fiscal precipice. With the exception of New Hampshire, New England experienced an extraordinary decline in revenues."

The recession was a calamitous event that the staid Federal Reserve bank described as falling off a precipice. But New Hampshire was singled out as being a notable exception. Why?

The single biggest reason is our lack of an income tax. During a boom economy, budget writers look enviously to our south as income tax revenues skyrocket and those states can say yes to everything. But then the inevitable bust comes, and those states "fall off a precipice." New Hampshire doesn't have the explosive boom, but neither do we experience the precipice.

In Massachusetts, legislators had a rude awakening. Income tax revenues declined by 16 percent in one year and forced sudden and drastic cuts. In that climate, New Hampshire's calmer system is the envy of our neighbors. According to the Fed, "by contrast, New Hampshire, without an income tax, was insulated from such revenue losses."

Without the roller-coaster ride of an income tax, our revenues don't rise as high or fall as low. We experience less turmoil.

We do have a milder version of the boom and bust cycle. When other states increased their spending significantly, we did too. After Gov. Steve Merrill ratcheted down spending during his last term in office, we saw a boom that would soon bust. Six years of spending growth put enough pressure on the budget that it had to be followed by four years of correction.

From fiscal years 1997 through 2003, we expanded general fund spending at about three times the rate of inflation and added about $900 million a year in education spending. We erased all the gains we had made when Steve Merrill tightened our budget belt and actually reduced spending in his second budget.

There had to be a correction. Gov. Craig Benson became the first governor in decades to actually veto a budget even with a Legislature of the same party. The final compromise budget reduced spending relative to the rate of inflation by about $90 million. The next budget, John Lynch's first, also came in below inflation by about $5 million.

Rather than find a middle ground and prepare for the next bust cycle, we decided to spend everything we had saved and then some. The current budget contained the biggest spending increase in 20 years and was the poster child for Hugh Gregg's warning about profligate spending. Now, with a recession upon us, Gov. Lynch is cutting spending he previously described as mandatory, and the state is looking at a bigger problem next year.

We're fortunate that not having an income tax is not only good for our economy but lets us avoid the worst of the roller-coaster ride. Our revenues do a good job keeping up with inflation; they just can't keep up with the appetite of spenders who forget that there's always a slowdown around the next corner.
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Charles M. Arlinghaus is president of the Josiah Bartlett Center for Public Policy, a free-market think tank in Concord.
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Readers' COMMENTS:

Hey JB, NB, NH We arew doing just fine with the 16 Billion deficit, and compared to the global recession just a drop in the bucket. As far as tax free NH, just go to Wikipedia (unless you think that is a left Coast org too) and you will see the following:
New Hampshire's lack of a broad-based tax system (aside from the controversial state-wide property tax) has resulted in the state's local communities having some of the nation's highest property taxes. Overall, New Hampshire remains ranked 49th among states in combined average state and local tax burden.
NUFF said!! Tax free indeed, give me services or give me......
IMHO
- John W., Atascadero California

Jeez Deb get up to speed. Now we are worried about Cindi McCain and her $500 million fortune and whether she is paying for any of the $150,000 worth of clothes for Palin or is that just your McCain contributions? Ketchup just doesn't do it any more it is beer uber alles. Imelda Marcos has nothing on Sarah's shoe collection unless it is Mr. McCain with his Ferragamo loafers. These people are just like you. They make over $250,000 and are worried about Obama's only actual tax hike. The rest is just pretend like your concern about those that actually have jobs.
- Robert Mann, Deerfield

Fred, It took 79 NH governors 200 years for state spending to reach 1 billion dollars and it only took 1 Democrat governor 6 years for state spending to reach 2 billion dollars. That's a 100% increase in 6 years.

For many voters, this November's presidential election won't be about voting for the best cabdidate. It will be about voting for the lesser of 2 evils.

Using you government spending analogy, if given a choice of a 40% increase in 8 years or a 100% in 6 years, I would vote for the candidate that would increase spending by only 40%. It will hurt less.
- David R, Manchester

To Fred in Amherst....yes, the Reagan administration (with help from the democratic controlled congress - you left that part out) did increase spending while reducing the size of government. That spending was largely on the military-industrial complex that was allowed to backslide in the 70s. It was a needed expenditure, as the Soviet Union was quite a large threat at the time and surpassing us in that field. We achieved Reagan's peace through strength largely due to that spending alongside not caving to socialists. Clinton on the other hand, came along and decimated our military-industrial complex while RAISING your taxes (after promising not to do so). So sure, he erased the deficit, at the expense of American National Security. The Russian General Staff used to think he was their favorite US president. Wonder what they will think of Obama? Anyways, Bush, before doing his best imitation of a drunken Massachusetts US senator, managed to stave off the coming Clinton Recession in 2001 when he took office. He bought us some time, but then took a left turn. That, coupled with a congress now controlled by tax-and-spend liberals, brings us to today. So no, sorry, I do NOT trust democrats to control spending. They don't exactly have a track record for America's best interests.
- Mike, Temple

Well Fred I'm sorry but I'm paid only in actual dollars and not by GDP just like everyone else including teachers. What you posted sounds more like a fancy way of saying we should be taking from some to put into the schools. The easy thing for me to do would be to say yes but I know sooner or later someone will come looking at my wallet again if I do.

I'm sorry but I see the problems in education as being more than simply a money issue. Or is that a GDP issue?
- Deb, Derry

Evidently, we have such a large community of the middle class who makes upwards of $200,000 a year - perhaps they are all relatives of Cindi McCain.

Robert Mann, Deerfield

Or John Kerry the richest man in the senate.

Do me a favor Robert and ask Mr. Kerry when his wife is going to bring all those Heinz jobs back from South America so she can make less profit paying Americans to do the jobs. Do I have to keep reminding you of your own parties lie to their slogans? If they are going to talk the talk they can at least walk the walk. I doubt even you would buy ten dollar a bottle pickles or relish. Of course we wouldn’t have to if Mrs. Heinz would make less profit right and paid a decent wage? Go for it Bash Heinz/Kerry for me? Tell us all how evil she is and what party her husband is in?

No let's keep paying people just as much not to work or have babies in this country and wonder why jobs keep leaving. It's their right.
- Deb, Derry

Fred--from your numerous past posts on the UL boards, it is easy to conclude that you are at the extreme in your views of education and education funding. Please understand that not everyone feels the same way that you do, and that it doesn't make said people wrong because they disagree with you. I am one of those people.
- JB, NB, NH

Christine, you don't trust the DEMOCRATS to control spending?! Ah, I think it was a couple of guys named Ronald Reagan and George W. Bush who took our national deficit from 1 trillion to 5 trillion, then 5 trillion to 10 trillion. A guy named Clinton, on the other hand. . .

I'm the myth buster today. How the Republicans can continue to claim they are the fiscally conservative party after the 40% (!!!!!) growth in government spending under the Bush administration is mind boggling.
- Fred, Amherst

Deb, the idea that America spends more than most countries on education is a total myth. In actual dollars, yes we are near the top, but when you look at the money spent as a percentage of GDP we are right in the middle. Right where our test scores are.

America is the richest country on earth, yet many European and Asian countries with much lower per capita incomes spend nearly as much or more than we do on education.
- Fred, Amherst

I think this commentary is only partially correct. Town's, counties, and school districts can weather changes in the economy because they are primarily funded through local, county, and state property taxes.

Don't kid yourselves. NH has a state income tax, a tax that many people, in particular retiree's pay. It is the interest and dividends tax. With the bottom falling out of the stock market, the interest and dividend income that many retirees live off of will crash; as will the tax revenue generated by the interest and dividends tax. This drop in tax revenue accounts for a large part of the income shortfall that Gov. Lynch is predicting for the state.
- Jack, Derry

As a lifelong, NH resident, I am completely opposed to an income tax. I have resigned myself to the fact that the property tax is never going to "go away" (or even be reduced for that matter). I understand that states, including NH, need revenue and the way for a state to raise revenue is through taxes.

What I don't understand about NH though is its reliance on what I'll call "pleasure" taxes to increase revenues.

Let's look at the recent increase in the cigarette tax. First it was, "let's increase the cigarette tax." Then it was, "let's wait to see if all those Massachusetts folks come buy their cigarettes in NH." And finally it was, "well, we didn't meet our goal in cigarette sales, so we have to increase the tax any way."

Why is NH relying on taxes like these, taxes where revenue is "projected" based on sales, yet the legislature is spending that "projection" like there is no tomorrow? Then, when they don't make their "projected" revenue, the state ends up in the red. Why does NH place so much emphasis on income/revenue from these types of sources when it passes its state budget?

On the weekends, when I see all those cars on the highway coming from Massachusetts, Connecticut, etc., I can't help but ask myself whether NH would ever consider a sales tax.

A sales tax would be the only "fair" broad based tax I would support. EVERYONE pays a sales tax, poor, rich, resident, non-resident alike.

No, I do not support a broad based tax, but I also do not trust the democratic legislature and/or democratic governor to reduce and/or control spending (and I can't afford to pay any more in property taxes while the value of my house continues to decrease as those around me go into foreclosure).

Finally, thank you Jack in Londonderry. I too will share my "wealth" the way I so chose. I do NOT want the government deciding how to "spread" my "wealth".
- Christine E., Pittsfield, NH

Evidently, we have such a large community of the middle class who makes upwards of $200,000 a year - perhaps they are all relatives of Cindi McCain. The median income in New Hampshire is $41,000 a year. That's a little more than the average income for Joe the Plumber. The average income in New Hampshire is $69,000. What does that tell you, if anything? There are a large number of people here who make mega money. You know, those people whose yaughts you wax and whose lawns you manicure and for whom you install those hot tubs. You don't need to feel sorry for them. They already feel sorry enough for themselves and do very well shedding their share of the burden for the country that has made it possible for them to rake in all those bucks. They'll be fine without you giving them more. This standing outside the gated communities and shouting at the residents that we are going to lower your taxes whether you want us to or not is really silly and lowers your dignity to the level of those in Kansas.
- Robert Mann, Deerfield

Just remember folks - any vote for a Democratic State Rep or State Senator is a vote for a state income tax. I don't care what they tell you - if the D's maintain control in Concord, we'll all have an extra line on our pay stub within 2 years: STATE TAX. Bank on it (if you can find one still operational).
- Mark, Amherst

NH State Dem's adopted what can only be described as an income tax as part of their party platform.
The NH State Dems have made it their party's goal to enact an income tax.

Only 20% of NH residents are aware of the Democrat's 17.5% increase in spending and the resulting $200 million dollar deficit. Let people know.
- TM, Nashua

All I was trying to say was as we are moving forward as a nation and we find something is not working maybe we need to simply go back to find when it was working better and correct what we tried now that is obviously not. It just seems a lot more logical than leaving things as they are and injecting yet more new untried ideas hoping it works.
- Deb, Derry

It's not so much that those of us who are anti taxation because we feel the stress of it in our lives want to hurt the children. It's that anyone should know how much government has grown and with it taxes and maybe we just feel there is always a few old Yo Yo's hiding in the junk closet somewhere we could do without before tax increases are even mentioned. Why is it government never shrinks even in hard times but my money does?

As for the school systems it is also fact America pays more per student than much of the world and has lower test scores also. See a correlation here? Maybe if we worried about actually teaching English, math, science, and history while expecting the kids and parents to try rather than focusing on dodge ball being bad or red ink hurting the children’s self esteem, or teaching the wonders of diversity, sex and condom use the test scores would go up? Maybe we could also let those who don't care fail and spend the time encouraging those who want to learn succeed. They most likely will fail either way so why let all suffer? Teachers can not be both parent and teacher and do the job asked of them properly.

It's just my opinion but the schools are what they are today for a few more reasons than just money. The values have changed and with them the quality. Not all conservative values are bad, and maybe it’s time some were brought back like being accountable for oneself. There is a difference between a student who tries and struggles and one who does not and disrupts the classroom. By all means do everything possible for the one struggling because the effort is there. I just see us striving to make it easy for all than encouraging kids to rise to a challenge and it’s not working.
- Deb, Derry

Taxes should be kept as low as possible and as local as possible.

I am in favor of spreading the wealth. It is good and necessary to take care of the poor and less fortunate. I would just prefer that I maintain control of how my wealth is distributed. The further away from me that decisions are made on how to spend my money, the worse off I am.

Government is the least efficient and least accountable method of distributing wealth.
- Jack, Londonderry

The comments on the UL website are overflowing with anti tax vitriol. That's fine. I would just like to suggest that some of you folks who hate taxes so much go take a look inside any of the public schools in Manchester.

Manchester spends less per student than almost any district in the state and finishes dead last in test scores. Anybody see a correlation here? I know conservatives have spent countless hours trying to prove that throwing money at the education problem isn't the answer, but that assertion just isn't supported by facts.

Nobody likes paying taxes, but they are necessary. If they weren't there would be some civilized country somewhere that didn't have them. There isn't.

Children don't ask to be born and they can't choose their parents and they don't have the ability to get themselves into a better school. It is our duty as a civilization to properly fund their education. If we don't we will pay far more later. Just something to think about next time some of you get your blood boiling thinking about how much you pay in taxes.
- Fred, Amherst

So California John...how's that $16 BILLION state budget deficit treating you out there on the Left Coast...?

Let me repeat that--SIXTEEN BILLION (!!). $16,000,000,000.

Good luck with that...
- JB, NB, NH

The biggest "LIE" is that no sales or income tax really benefits people living in NH. Can you spell USER FEES and NO SERVICES. I was born and raised in NH and lived for more than 50 years and the biggest eye opener was to leave and see how other States actually provide services to their residents. How many elderly residents are forced to sell their home because they cannot afford the property tax increases? How many cities in NH have adequate public transportation systems? Why is car registrations and hunting/fishing liscenses etc so much higher in NH? And I know education is doing fine in NH (Can you spell donor communities)Despite all the issues here in California most do not have a problem paying a tax and actually getting something in return. Once you buy a home your lifetime tax is fixed (based on 1% of purchase price) and only if sold will the new owner be subject to an increase. YUP keep up the good work NH, taxes are all EVIL!-LOL IMHO
- John W., Atascadero, Ca

Lived in many states and have seen taxes rise and rise and rise. Town income taxes and county taxes are now appearing. Please do not ruin NH anymore than it has been. The property tax is not as high as you would be made to believe. Live in a high tax state where everybody gets what they want and every program you can manufacture is present and you will return to NH faster than you left. Less is better. We don't need the state overrun by MA people who demand everything.
- Mike, Deerfield

After reading both the epistle by Charles Arlinghaus and the comments that followed, I have to conclude that the one written by Bill Cat of Boston is likely the one that is most accurate regarding taxes. However, without tax revenues, the federal, state, and local governments could not function! Therefore, taxes are a necessity and a reality.
I do take issue with one of Mr. Arlinghaus' "facts" because we had a recession during the governor Judd Gregg regime. In his typical fashion, Gregg refused to acknowledge it and preferred to call it a "repression"! I suspect this guy is doing the same thing.
I submit that NH has failed to honor all of its financial obligations and needs more revenue. Republican oriented politicians have historically cut, cut, cut, and cut the state and local budgets due to lack of sufficient funding and now those cuts are nearly Draconian! Lack of sufficient funding is because NH lacks a broad based tax structure that can transcend economic downturns.
Another way of saying that is to paraphrase what financial "experts" call a broad based or diverse portfolio. NH too heavily relies on the local property tax to fund its primary local expenses. It needs diversity and that is limited to additional forms of taxes because NH governments are not in the "for profit / greed" private sector.
- Gary L. Kerr, Chichester

More radical ramblings from our friend in Deerfield. Imagine the surplus NH would have if it did not go on an obnoxious spending spree. This budget mess was self created and laid the framework for the implementation of an income or sales tax.
- Alex Capri, Northwood, NH

It's good that we are insulated as a state from steep income tax income that would result in huge budget shortfalls. But aren't we already seeing a budget shortfall? This country (and state) spend money we don't have. In every state the budget drives the tax rate as opposed to the reverse. People who make less money after being laid off still pay the same amount of tax they did when they were making more money. If half this state were unemployed tomorrow the property tax rate would still generate the same amount of tax revenue. Even if house prices fell the tax rate would simply be readjusted to bring in the $$$.
- Bryan, Manch

Bottom line, an income tax sucks money into the parasite sector with such amazing ease as to invite indiscretion. The pipe-dream that any of it will reduce other taxes has been disproven in other states and was crystallized by Gov. Sununu (the Senator's father) when he said, "You don't lower taxes by raising taxes."
- Spike, Brentwood NH

So let's see we have no income tax or sales tax so we have a nice firm footing. If the state is short money and your house value has gone down then the property tax is raised and you can move out of the state but you can't move your house. The end result is any homeowners are on the hook for the bill. The rich just write it off as an expense and the rest of us sit in the dark with the house at 50 degrees so we can pay our property tax bill.
- Don Armstrong, Henniker

NO Income Tax!!!! This is why our state is one of the best states to live in!! I echo Jim from Wilton's response, I will NOT vote for any party that supports a state income tax, EVER!!!!
- Joe, Stratham NH

There's a yes, no and maybe on this statement. Yes, NH fares a bit better because the economy isn't tied into income tax -- when jobs slow up or go away there's not a strong effect on the local economy. Then there's the 'no' part where hospitals can put a lien on homes for the cost of medical care if the folks have no insurance -- because there's no money in the budget to help with that. And the 'maybe' comes in when the school year rolls around and it's a choice between sand and salt for the roads this winter and new books for the kids. NH better off for no income tax? Yes, no, maybe.
- Bills Cat, Boston, MA

I will vote against any politician of any party - Republican, Democrat, Independent, Green or Libertarian - who advocates an income tax.

As we saw in Connecticut and other states, once an income tax is in place then property taxes will ultimately begin rising too. It may take a year, two years, five years or two days but you can count on the property tax going up steeply after the income tax is phased in.

Politicians NEVER give up a tax once they put it in and they are ALWAYS keen on raising taxes so that they have more money to spend.

No income tax for New Hampshire. Not now, not ever. And let's cut spending steeply so we can lower property taxes in all of our communities.
- Jim, Wilton

Dear Robert Mann, I am a member of the middle class. I fully disagree with your assessment. Again. I don't need you worrying yourself over me and mine. We're doing quite well.

NO income tax. NO sales tax. Institute budget caps. Reduce spending. Reduce government.
- JB, NB, NH

Bill,
That is not completely correct... it would behoove every property tax payer to read the small type on their bill.
- John Edward Mercier, Belmont

And now from the guy who said there was no housing bubble. Just look at the ten or so pages of foreclosures in this newspaper. If you are rich, New Hampshire is just as wonderful as any other place except that you don't have a state income tax to pay. If you are middle class, not so much. We already have an income tax on business (BET) and those who report income from dividends and interest mainly a burden to retired persons. Worry about how life is for the middle class. Those are the actual workers who make the state run. The rich are always with us and will avoid paying whatever taxes you might want to raise with loop holes, no bid contracts, shrink wrapped pallets of hundred dollar bills and tax accountants. They worry about themselves why don't you worry about yourself for a change?
- Robert W. Mann, Deerfield

What is not mentioned in this article is that the property tax has to be paid, whether your income goes up or down. If you lose your job or if your business is on the skids - it doesn't matter, you still have to pay your property tax.
- Bill, Amherst

Maine is the kind of disaster that NH could be with a state income tax. Maine is the true welfare state unlike Massachusetts which has a better business climate by far. It wouldn't take long for the economic rot to spread across this state if an income tax were to be instituted. What ever it takes stop the income tax.
- Chris, Merrimack

As for this reader, I find it surprising that incumbents running for re-election aren't talking about bill HB1373 that came into session in January? This bill establishes an income tax at the rate of 3.5 percent. At the end of the bill's text is this wording. "The Department also states that the low and moderate tax relief section of the bill (RSA 76-A:24), will place a cap on a property owner’s liability for local, county and state property taxes at 8% of the property owner’s household income beginning in 2010 with the difference appropriated from the general fund. The Department cannot estimate the fiscal impact of this section of the bill." They can't estimate the fiscal impact? Just as they couldn't estimate the fiscal impact of their over spending which now has the State of New Hampshire facing a deficit of more than $100 million. As voters and tax payers we need to take the next fourteen days and ask candidates running for state offices; "Do you support tax and fee increases or do you stand with the citizens and are willing to reduce spending in the next budget cycle?". As a candidate for District 12, I stand with the citizens, as I have and will continue to sign pledges to fight tax increases and fees. It's time to get NH back on track.
- Robert M Tarr, Manchester

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"The distorting effect of 'free money'"
By CHARLES M. ARLINGHAUS, The NH Union Leader, Op-Ed, Wednesday, Nov. 5, 2008

For decades, politicians in New Hampshire have promised to go to Washington and get us our fair share. The problem is that there isn't a fair share, and the impossible quest for our mythical share distorts local decision making.

Federal bailouts and largesse merely take money from us and send it back only for the projects or in the amounts deemed appropriate by someone in Washington rather than someone here at home.

Many states hope Washington will send billions back to states to help fix state budget problems. This sort of state budget welfare rewards states that have done a poor job managing their finances at the expense of states that have been prudent and responsible.

New Hampshire used to be among the prudent and responsible states. Today, we regularly make the top 10 lists of poster children for budget crises. One strategy is to hope that a rich relative in Washington will bail us out so we don't have to go to the trouble of changing anything. The better solution is to take a look in the mirror and solve our problem ourselves. There is, after all, some evidence to suggest that Washington might have fiscal problems of its own.

Fiscal emergencies come and go. There will always be pressure for federal help when a crisis hits, regardless of its cause. But federal distortion is an ongoing problem that isn't always noticed outside of a crisis.

In short, the availability of federal funds distorts policy decisions. Some policy choices jump to the front of the line because they are not paid for with state taxes but instead come from the seemingly "free money" out of Washington.

This dynamic exists in most departments of state government but can be seen most clearly in transportation.

When you buy gasoline, you pay a state gas tax and federal gas tax. The state tax is sent to Concord and assigned to state priorities as laid out in a state planning process. We have a 10-year plan that theoretically lays out which bridges need to be fixed right away and which highway projects are of first, second or third priority.

The federal tax, on the other hand, is a giant political football. The money is sent down to D.C. and then doled back to the very states that sent it. When the money comes back to the state, it doesn't help us with the projects we have decided are important. Instead, some programs receive favored federal status and others are the infamous earmarks -- projects deemed important not by the planning process of a state or even federal DOT officials, but by the powerful member of Congress who often ends up with a bridge named after him.

In ordinary circumstances, would the state decide to spend millions of dollars to subsidize bus service? It might and it might not, but that decision was made by default because federal funds are available to pay for it. That money, collected here and sent to Washington, comes back not according to our analysis of priorities but according to Washington's.

Some people think it would be really neat to have a commuter train that comes into New Hampshire from Boston. It would cost about $300 million to put in place and millions more each year to subsidize the operating costs. New Hampshire rail officials are looking to Washington to help pay for it.

If we are going to collect money, send it to Washington and have them dole it back to us, wouldn't it make more sense to keep it here and develop our own priority list? If we want to use it for bridges instead of buses, or trains instead of paving, that decision about our needs is best made here, not in some giant office building in southwest D.C.

If the federal gas tax were just renamed "additional state gas tax," each state could decide for itself what to do. Without the expense of sending it to D.C., having officials decide what's worthy and not, there would probably be more money for programs and less for overhead.

Without the temptation of a giant transportation bill to earmark up, there would be fewer bridges to nowhere and Lawrence Welk Museums. If the people in North Dakota favor building a museum instead of fixing a bridge, it will be up to them.

After a bitter and divisive election, it would be nice to start with something both parties can agree on. Keep the money out of Washington. The same amount and maybe a little more will be available, but I won't have to care about what people in New Jersey do. That'll be up to people in New Jersey.
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Charles M. Arlinghaus is president of the Josiah Bartlett Center for Public Policy, a free-market think tank in Concord.
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Readers' COMMENTS:
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Normally I'd avoid responding to the cute rants of the guy from Rochester (huzzah on the spending cap vote by the way) but his annoyance gives me a good op. to emphasize a couple thingamajigs. Not suggesting we refuse the cash, suggesting it be doled out differently. Instead of sending it down and having it sent back, everyone keeps it. That way Terrible Ted doesn't get a bridge because he's got seniority and a good lawyer. Alaska gets what they get and we get what we get. What we do with it is our business not the business of the Senior Senator from the transportation committee. Just a thought. Not terribly right wing (I'll save that for later in the month when I roll out stuff that'll make you question my sanity not just my literacy).

And I'm not from New Hampshire. Well know to my friends (or the people I pretned are my friends -- I like to humor myself) that I, like the majority of those occupying space within the current state boundaries, am "from away." Pretty sure about that anyway. have memories of my zip code when I was in high school and it didn't start with a zero. I think that's a sign.

P.S. rehashing shallow right wing philosophy and mired in old thinking is my motto. I'm gettin' a T shirt!
- Charlie Arlinghaus, canterbury

I can't take Arlinghaus to task (as I usually can,) for sloppy writing and poorly connected points, as this column pretty much doesn't have any points. It's a rehash of shallow right wing philosophy, devoid of new ideas and mired in old thinking. I wonder if Charlie realizes this is online and not just for people buying a paper copy of this publication, because he only preaches to the hard right UL choir.

I agree waste is bad, we all do. But if you wanted to address federal government spending thoughtfully and not just lazily rant about spending generically, you'd step back and take a look at what our money is spent on. Doing that, you'd have to take a totally different angle than Arlinghaus has taken.

You'd immediately have to point fingers at billions in BORROWED money a month for a wrongheaded war with the attendant downstream medical, benefits, and rearming costs yet to be even calculated. Billions of consumer dollars wasted for a broken health care system that is designed by and for corporation's benefit. Billions at the defense department for absolutely useless and criminal investments in boondoggle projects like missile defense. Billions sucked from expected tax revenues by corporations using loopholes and offshore fronts. And of course billions in personal income tax redistributed upward to a tiny percentage of the population, who coincidentally benefit from the war's rearming costs, the corporate designed health care quagmire, and corporate loopholes.

No, Arlinghaus wants us to stoically refuse to accept monies for well-planned and needed infrastructure for our own state before we look else where for savings. If you can't afford a Humvee to blast over rotten roads and a limo to relax in during traffic jams, well I guess you are a slacker who deserves the teeth rattling ride and three hours a day extra commute in traffic. And, it's just us here in NH who should sacrifice. It's ok for pig farmers in the Carolinas to get fed money to clean up ground water they've contaminated, it's ok for Ted Stevens to use his seniority to demand $300,000,000 for a bridge to an island with fifty people on it. Are you sure your are from NH Charlie?
- Tom Labrie, Rochester

Mr. Arlinghaus omits only that the NH money that Washington returns to NH comes back with strings attached, notably that we change our laws by adding various driver-safety laws that have always been unpopular.

I have never understood how, if an issue is not within the power of the federal government (such as changing a state law), how the federal government can acquire the same power through blackmail.
- Spike, Brentwood NH

Fred: You need to look a little deeper.

Alaska is in that position because they get money from oil and gas extraction revenues much of which is in federal land but which the federal government shares with the state.

If you have ever been to Alaska (I have), you might want to compare the people and communities with those of a state that really is a sponge for federal largess, they are quite different. But hey, better to maintain ignorant ideological perspectives right?
- Bob, Rochester

Alaska receives more federal money per capita than any other state. I'm sure that Gov. Sarah Palin, after reading your commentary, will say "Thanks, but no thanks." and send all the federal money back.
- Fred McGarry, Deerfield

Keep the money out of Washington? Get real. That's something NEITHER party can agree on.
- Rowland, Fremont

So NH could build the interstate highway system better? Paid for by federal gas taxes. How many years has the Conway bypass been in the works because of perennially low budgets? Only federal taxes have the funds to enable big first cost projects like bridges and highways because the Feds do not require a balanced budget. If liquor sales are down this year, construction gets cut to balance state budgets because it is a big target. When I93 is widened after waiting how many years (and now reduced in scope for lack of state funds), personally I prefer that gas taxes from DC are driving it so that it actually gets done rather than wait until this cheapskate state gets its piggybank full. The alternative is like PA is doing: lease the turnpike to private industryfor 30 yrs of tolls. Ask Merrimack how much they like that idea.
- bob s., Northwood

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"Legislators can balance the budget if their priorities are straight"
By CHARLES M. ARLINGHAUS, Op-Ed, The NH Union Leader, 11/26/2008

While the state still struggles to fix a $250 million budget deficit in the last year of this budget, a much bigger problem looms just after the new year. The next budget will start with the largest budget hole in recent history. Politicians of all stripes will need to put principle over politics and avoid the sniping that too often replaces debate in modern times.

Legislators dealing with the current two-year budget had to resolve a $71 million revenue shortfall in the first year and an additional $250 million problem in the second year. A series of spending cuts, small tax increases and borrowing has trimmed the second-year deficit to $75 million. However, some of these proposals have put problems off until next year's budget.

As the governor prepares a budget proposal due in February, estimates of the gap between current programs and likely tax revenues range between $250 million and $800 million. Although much depends on whether the economy recovers quickly, a good median estimate is that we face a $500 million problem. By almost any measure, this will be the most difficult budget in many years.

Many politicians and outside observers will be tempted to pick apart the details of any proposal to score points against their political opponents. Instead of squabbling over details, politicians should agree on broad goals to limit the games that can be played over small points selected out of context.

Broadly speaking, I think the vast majority of elected officials can agree on the end goal. At the end of the budget cycle, regular expenditures and regular revenues should be in balance. That may sound like a fairly simple goal to the average citizen who has no choice but to balance his or her own budget. However, New Hampshire's budget is not balanced that way and is not currently required to be balanced that way.

The last couple budgets, for example, have spent more than they hoped to raise. The current budget got in trouble because revenues fell quite a bit short of the estimates used to balance spending. However, even if revenues had come in as budgeted rather than $300 million short, the state's general fund had planned to spend $108 million more than it hoped to raise.

The extra spending was balanced with one-time revenue sources, notably surplus money from the previous budget. Generally, regular recurring programs should be paid for with regular recurring tax revenues, not one-time windfalls, just as you wouldn't pay for a mortgage payment with an unexpected lottery windfall.

Getting back to a truly balanced budget will take both years of the next two-year state budget. In the current economic climate, it is reasonable to expect the first year to be a transition period. Many unusual and one-time sources are being used to balance the current budget, and it will take some time to readjust.

The current budget will be balanced with $40 million of "bonded" or borrowed money. It also includes a series of one-time revenues, such as a large transfer from the Pease Development Authority and the governor's recent proposal to take $15 million from other dedicated funds to bail out the state general fund. In addition, the incoming President is likely to propose a bailout package that could include $50 million to $100 million in one-time aid to the state.

The one-time revenue and borrowed money cannot be expected on a regular basis. Therefore the state must wean itself from it. Adjustments to spending this year and next must be made so that spending and revenue in the second year of the next budget balance.

Once the budget is restored to balance, our sloppy balancedbudget law should be amended. Each year the budget should be in balance, and surpluses carried forward from the previous year should not be counted toward balancing current spending and revenue. The sloppiness of the existing law makes it possible to defer some decisions and put off problems into the second of the two budget years.

The legislative session will see many arguments and debates over raising taxes, cutting spending, finding new revenue sources and changing the budget process. But both parties and most factions ought to be able to agree on the ultimate goal of getting back to balance at the end of the second year. Agreement on that goal offers some hope that the real debates will center on differences of principle and put at least some modest limits on less productive political bickering.
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Charles M. Arlinghaus is president of the Josiah Bartlett Center for Public Policy, a free-market think tank in Concord.
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READERS' COMMENTS:

The Union-Leader had an excellent first step: Kill the Commission on the Status of Women. (And, for symmetry, kill the one on Men too.) I've proposed that we kill all the agencies that pass out loot to advertising agencies in order to nag the citizenry, such as the NHTSA. The Governor instead wants a moratorium on travel to conferences: That is, do the same things more carefully, rather than rethink the things we are doing. That's not leadership--nor would it be to send taxpayers a new bill based on unwillingness to rethink.
- Spike, Brentwood NH

A governor who will not allow a state sales or income tax to become law must request of each department head a PRIORITIES list in order to meet their mission statement.
Then a review by the governor and leadership of both parties.
And this time listen to people like Rep. Norm Majors who strongly suggested two years ago that the revenue would notbe there to cover the 17.5% increase in spending.
Now, with all elected representatives included the department heads/commissioners are instructed to live with the amount appropriated to them.
And if they cannot, without good reason - time to look for another job!
And do not sit around waiting for Obama to send the "free money".
bnyoung@metrocast.net
- Niel Young, Laconia

This piece seems to suggest common sense and sound fiscal policy as the road to budgetary salvation. What a novel concept

WE ARE DOOMED!
- Mike P., Manchester

We need to reduce government and its leech like employees. Then and only then will this country return to its values of self reliance.
- Jay, Concord

What a great idea. Let's continue taking and acting on the advice of those who took part in the economic problems in which we are now emmeshed. There really seems to be no limit to the amount of money that they will accept from us if we insist. Arlinghaus found no housing bubble, I hope he does better finding his other turkey. Happy Thanksgiving!
- William, Deerfield

A balanced budget may not be seen until 2011-2012 at the very least. Given what we saw with the last budget and heading into this one, the majority needs to stop playing with bonding and one time 'quick' revenue streams. Reduction of overhead, consolidation of departments, consolidation of vendors and a central purchasing department are good places to start. This one time bailout package (if it comes) from the Federal Government isn't going to help for very long. "The legislative session will see many arguments and debates over raising taxes, cutting spending, finding new revenue sources and changing the budget process." Mr. Arlinghaus couldn't have said it any better.
- Robert M Tarr, Manchester

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"NH has quietly built a mountain of debt"
By CHARLES M. ARLINGHAUS, Op-Ed, NH Union Leader, 1/28/2009

New Hampshire's budget deficit may be the worst in the modern history of the state, but it may not be the worst financial crisis we currently face. As the current budget eats away our financial reserves and puts enormous pressure on our budget structure, the state's long-term debt and obligations are rising to dangerous levels that make the budget deficit pale in comparison.

Like almost every government entity in the country, New Hampshire finances many of its capital projects with long-term debt or bonds. Twenty years ago, our general obligation debt was $349 million. Over 20 years, that number has risen to $738 million (as of June 2008) and is growing every year.

By federal standards, of course, $738 million is nothing. It's only $556 per capita. However, the trend is disturbing, as is the willingness to turn to debt whenever there's a problem. The most recent budget includes $40 million worth of items that had always been considered operating expenses before but which are now paid with debt. On top of that, we borrowed an additional $60 million to pay for highway fund expenses that used to be paid for with taxes.

The real problem isn't any one year of debt. The cumulative burden has been building for 20 years, slowly and inexorably. Stopping that growth is a long-term project.

Regular state debt is getting worrisome, but the hidden obligations of state government are the real problem. While nominal state debt is a little more than $700 million, the state's unfunded pension and similar obligations are almost 10 times that amount and growing rapidly.

Government accounting rules require a periodic statement of the state's pension liabilities and funding ratio. As recently as 1989, the state's unfunded liability was zero. We had enough assets in the system to cover our expected liabilities at projected growth rates.

Then the state's unfunded liability began to creep upward. By 1999, we were only 90 percent funded with a liability of $340 million. As of June 2008, the unfunded liability had exploded to $2.5 billion, and it's getting worse. The state reported that through October, the system lost almost $1.5 billion, making the unfunded liability $3.95 billion and growing. But that's only the beginning.

Recent accounting changes have forced the state to report the value of other benefit obligations. As of the last valuation two years ago, the state had no assets set aside for its "other post-employment benefits" (OPEB) obligation and had liabilities of $2.56 million.

In addition to the OPEB obligation, the state reports a separate health benefit liability of $495 million. Finally, the much-smaller judicial retirement system has dropped to 92 percent funding and has a liability of $4.3 million.

These four obligations combined have an unfunded liability of more than $7 billion, dwarfing the general state debt of $738 million. What's worse is that each of these obligations gets larger every year.

Our unfunded pension and benefits liabilities increase with serious declines in the stock market. During market retreats, they will look much worse than they are in the long term just as market booms will exaggerate their health.

But regardless of market distortions, we have among the worst-funded pensions in the country. We've gone from being more or less fully funded and keeping up with our growing obligation each year to having billions of dollars in debt.

For decades, debt and the long-term pension obligations were an insignificant part of policy debate. They were out of sight and out of mind. Finally, the growing shortfall had an impact on the state's annual contribution and therefore affected the state's operating budget.

There was a strong effort by the House to pass significant reforms to secure the long-term future of the retirement system. In the end, some changes were made, but there's much more work to do. The changes are not just about the solvency of the pension system. They're about the solvency of the state.

The debt problem is part of the whole budget-deficit problem, and the time to act is now. The new President of the debt-ridden federal government, Barack Obama, put it succinctly: "What we have done is kicked this can down the road. We are now at the end of the road and not in a position to kick it any further."
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Charles M. Arlinghaus is president of the Josiah Bartlett Center for Public Policy, a free-market think tank in Concord.
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Readers' COMMENTS:

No Bob, I don't keep a copy. But when articles on the topic appear, I like to voice my opinion and let the leaders in Concord know that people are watching, and not all are fooled by flowerly language and a kind smiling face.

The unfunded pension crisis is a big deal, whether you admit it or not.
- Ditmar, Hollis

It needs to be repeated, over and over again until those who aren't listening finally hear it, "New Hampshire has never been in debt while a majority of Republicans held power in the state government", and "Under a Democrat majority rule New Hampshire spends itself deeper into debt year after year after year". You can deny these facts but then you would be crazy because this is the reality.
- Don Diamant, Milton, NH

Don't feed the beast that is government because they are never satisfied.. and YES it's Democrats and Democrat governors and legislatures that are to blame... please don't try to blame everything on Republicans, which is typical. Take your fingers out of your ears. If WE don't have the money, taxing us will just make matters worse.
- Sue, Manchester

If I was to fix the problem I would propose fixing it from the private sector. The way this would be accomplished would be producing muncipal debt offering to raise capital for infrastructure, schools, etc. NH taxes muni intrest and dividends therefore provide immediate income and utilizing the current tax code to provide additional income. Each state has their own way for taxes. Dont add new ones just use the ones you have wisely.
- Wayne, Merrimack

Tina of Manchester -- It seems that the answer that the majority of commenters want to see is no government, no public services, all private education, no environmental regulation, no highways or commuter rail improvements, no libraries, no police or fire or emt aid, etc. just so they don't have to pay their fair share of living in NH. You have nailed the NH tax structure - no taxes mean no services and fending for ourselves. That's like the prevailing "me-first" attitude and the rest of society can leave, but don't expect anyone to volunteer to help.
- Gary L. Kerr, Chichester

How about cutting spending by shrinking the size of our government?
- Jay, Londonderry

To all those who want more taxes :: Boston has taxes,, lots of taxes.. more taxes than one can keep count of.. yet: Boston has overspent by $140 million dollars! Is this what you want for NH?
- tom, manchester, nh

Mr. Kerr from Chichester, please take off your knee pads and it appears that you have a little Liberal spew left on your chin...

Bottom line is that everyone got greedy, over extended themselves and had to spend spend spend... Everyone should look at the guy with the OBAMA sticker and mouth the words "Thanks ALOT". This stimulus package is going to affect our childrens children. WE ARE ALL TO BLAME... Last thing we need is a Democratic (Spend spend spend) Administration bailing everyone out and keeping the poor down to make them more dependant on these same spending programs...
- Peter H., Stoddard

Governor Wieker of CT used the bond rating argument to help pass the income tax there to retire debt, steady revenue source, make Wall St happy with bond rating, FOR THE CHILDREN.....and guess what Pamela??? CT is now looking at an 8 BILLION dollar DEFICIT on top of unfunded pensions, huge state work force and long term debt, schools and towns crying for more aid, on and on. IT DID NOT WORK, what don't you people understand.
- Mike, Raymond

So increase in property taxes--out.
State income tax--out
Sales tax--out
New tolls--out
Gambling--out

It seems everyone wants streets fixed and plowed, someone to help financially when you get in a tough spot and clean running water, but no one wants to pay for it.

Texas is a large state. They do not have a state income tax, property taxes are laughably small. How do they do it? Sales tax. 8cents on every dollar spent. Everyone pays their fair share for the goods and services they utilize. The tax is so negligible as to not even be noticeable but it supports the state and the roads are pretty good there too!
- Tina, Manchester

I laugh at the name calling here about which party is to blame for all of this. In reality it is the voters who vote these people in not which party and let them do the things they do.
There is plenty of blame to go around for each party. As pointed out the Democrats have had control in Concord for a number of years and I have not seen any changes just more spending.
I still have not seen a good answer about school funding and I still see no real plan to fix our roads and infrastructure.
Yet the fees and registrations and tolls go up.
This pension issue like many issues in Concord is not new yet nothing ever seems to be done about it that really amounts to any good.
For you broad base tax or sales tax advocates I can only say look at the states that surround us that have thm and see if they are any better off?
It's time to stop all the name calling and finger pointing and fix this broken mess. Freeze all raises or monies until all items have been reviewed and any unnecessary funding cut out.
We have elections every two years so if your rep or senator or governor are not getting the job done then vote them out instead of staying with the status quo and listening to sound bites and rhetoric.
The state government much like the federal government needs to be reeled in because they are all out of touch, only care about themselves and the next election and how much power they have.
Time to have a government for the people by the poeple instead of one that rules the people and they have no say because no matter who gets elected nothing much really changes.
- Bill B., Pelham

Ditmar do you just keep a copy of your retirement rant on your computer and paste it on the UL every few days or so. I am retired, and guess what they don't offer health benefits anymore. So you need to update your statement, and update your research. There is my rant to you.
- Bob, Hooksett, NH

Reforms to the pension system are necessary. These defined benfit plans are relics of the 1950s, where workers lived just a few years after retirement. They were never intended to have people work as little as 20 or 25 years, and then get paid for 30 or more.

Reform of the public pension system is needed. Unfortunately, the state legislature recently punted on any major reforms, and the Governor stood mute during the debate. Very, very minor cost cutting reforms were enacted, but the polticians disingenously claim that they have enacted significant pension reform.

They could start by setting up a new tier for new employees, requiring a few more years of work before vesting and beginning to collect benefits. And by requiring employees to pick up a greater share of the cost, as well as the cost for any post retirement health insurance benefits.

All over the private sector, these plans have been eliminated years ago because they are far too costly. Lets see if anyone in Concord has the guts to propose any real reforms this time around.
- Ditmar, Hollis

I think I get it now. My income is steady or decling so I continue to spend as usual, spend more "for the children," and ignore saving for retirement or a rainy day. Repeat year after year. Ponzi scheme? Madoff took rich people's money. The state wants everyone's money and will keep taking more and more until there are no rich anymore. Debt will ruin us all. Instead of leadership the Govenor is AWOL.
- Steve Machovic, Windham. NH

I think that it is significant that CHARLES M. ARLINGHAUS started his thoughts while the infamous republican John H. Sununu was governor. That was the year when he personally moved the state from its historic, well funded budget management into GAAP. Yes, "gaap" as in "hole" because he moved NH from a mode of paying for all expenses with TAXES (in supposedly "tax free" NH) collected in the previous years to spending this year's tax collections this year. IE he spent two year's worth of TAX collections in one fiscal year! From John H. Sununu's reign it was all down hill. That includes republican governor Judd Gregg and republican governor Craig Benson.
NH governments have failed to fully fund their part of the retirement system by relying on investment yield and employee contributions to cover all costs. That approach worked somewhat o.k. until each of the recessions (a republican Judd Gregg repression) took much of the investment credit. Now the blame is being thrown on the employee whose contributions have actually held the retirement fund together. It's not the worker who is to blame, but government and republican failures to adequately fund all its OBLIGATIONS. All obligations such as public education, highways, bridges, and other public safety programs need to be fully funded regardless of what party is in office.
- Gary L. Kerr, Chichester

This is a Democrat strategy to force sales and income taxes down our throats. They're going to keep spending and spending until the hole is too deep to climb out of without a broad-based tax.
- Joe, Manchester

Ah, more rants from Robert of Deerfield who thinks that the answer to everything is "more goverment" and to blame republicans for everything. Maybe it's time for the "do nothing Gov" and tax happy legislature to represent all NH residents not just senior citizens and state workers.
- Alex Klemac, Deering, NH

Broad based tax is not the solution. Look at our comrads from the south. They still have the same problems that we do if not worse. Instead of throwing away money to fix the problem and taking it away from other effective uses of these resources lets actually fix the problem. If you have a leaky bucket you do not pour more water into it unless you fix the holes.
- Wayne, Merrimack

Robert of Deerfield take your head out of the clouds and pay attention. Those obligations of the past were being met with slow and steady growth. As been noted on many occasions the state of NH cannot be all things to all people. It's a nice bumper sticker to blame the Republicans, but for awhile now the person on top and the two branches of the house have been under the Democrats control. Governor Lynch as slowly been killing us with his nice smile and kind words. In the meanwhile the state budget has run amok. Have you notice all the graffiti that is not being taken care. That is the 1st sign that the state, is spending money to take care of social programs and telling us how to run our towns and schools from Concord and Washington. I will say it again,it is high time we take back our state and put NH on a diet.
- Joseph Santaniello, Kingston?NH

Lets hike taxes to pay for all of these debt obligations. We needed higher broadbase taxes as it seems to work so well with our neighbors. They are all sitting on mountains of money and surpluses. When will the people of NH wake up and understand the government can spend us out of this recession. In fact, lets have a 100% income tax and just wait for money from Concord to take care of us all.

Pamela, will you come to the Capital and hold my hand and sing Kumbaya together until we get these knuckle heads to raise our taxes? I am begging you!
- Kyle, Bedford

It's time that we ran these spend happy Democrats and phony Democrats who call themselves Republicans out of office. We need to put back into office, people who run the State budgets like they run there household budgets. Spending only what they have. These people forget that it's not there money. It is more the reason to never have a state income or sales tax. The best way to get rid of these debts is to starve the government of money. We need to take our state back and bring back the true Tax-free NH.

I would be interested in feedback. I am strongly considering a run for office, as a fiscal conservative pushing for a smaller and leaner government. NH needs to go on a diet!
- Joseph Santaniello, Kingston?NH

This state is being ruined because we keep trying to make it like all the other populated states. We don't need a 4 lane highway each way on 93. We don't need every little program that costs to make sure every single person is protected from themselves. Cut costs, reduce govenment, reduce the ridiculous entitlements. NH people used to make do with what they had, now all the newcomers want their hand out and want the state to provide everything for them that they had where they came from. NH can grow but slowly. We do not need strip malls on every corner and we do not need government to provide everything for everybody.
- Mike, Deerfield

CUT SPENDING NOW! (caps and shouting intended)

We don't want a broad-based tax.
- Kevin C, Nashua

We make 60 to 80 million a year on alcohol tax. If we legalize hemp/cannabis and use the same control tactics as with alcohol we could easily make another 60 million. Or maybe we could crawl back under a rock and ignore that one.

Next would be to act on the expanded the gambling discussion.

Toll booths are dangerous and not fair across the board. I hate to say it, but increasing the gas tax is better option.

My 2Cents...
- JR, Manchester

We can thank all the socialist democrats that came before Jeanne Shaheen but mostly ex-gov Shaheen and those libs since that have spent us into all this debt by promising government solution to our problems. It's becoming more and more clear that government spending IS OUR BIGGEST PROBLEM and it must be drastically reduced in a BIG hurry.
- AJ, Windham

Those accounting tricks which hid our obligations for years were done by Republican administrations. Now the truth is being dealt with by Democrats.
- Marty, Bow

Do you guys have editors? Look at the fifth paragraph. I think it is supposed to be $700 million, not billion.

*** Editor's note: The story has been corrected. As accurately noted in the second and third paragraph, the state's debt is in the hundreds of millions. ***
- Greg, Manchester

All this wonderful stuff from the "think tank" guy that told us there is no housing bubble. The major part of this flim flam is that the Republicans for years inserted their accounting gimicks into our state revenue system to make it look as though the cities and towns were paying their share of agreed upon retirement benefits for public workers. This was done in order to keep taxes artificially low. Guess what? If you don't pay things when they are due no little green monkey comes along and pays them for you, you have dug a huge hole and have to pay that money back.
- Robert, Deerfield

Pamela of Barrington, I suggest if you feel the need to be taxed to death at the whim of inept, self-serving, currupt politicians, please move to Massachusetts or Maine and pontificate in their newspapers.
- Doug, Dover

With young people moving away in droves and a huge debt building up here the question remains do you want to live here when NH becomes the next VT or ME with high taxes and a unproductive economy.
- Chris, Merrimack

Chris/Manch & Jason/Epping - you might want to reread this line before you rant further about the Dems -
"the cumulative burden has been building for 20 years, slowly and inexorably. "

It isn't just the Dems, the Repubs are responsible too. In fact, more than half this past budget's increase was due to obligations incurred by previous (Republican) legislatures, and by Dems making the budget process more transparent (i.e. not hiding parts of the budget as separate items, which the Repubs had been doing for years).
- tom, candia

Yes, Denis; last year Puerto Rico instituted a hefty new sales tax (to go along with an income tax similar to ours) because of a "crisis" of inability to sell bonds. (It was, of course, a crisis of overspending.) But maybe we won't need this excuse; Pamela weighs in with the tried-and-true old one: New taxes "for the children."
- Spike, Brentwood NH

How else are the Democrats are going to introduce a broad based tax. State Rep. Tim Butterworth(D) of Chesterfield is "open to all new ideas". When further asked if that included including an income tax he said yes!!
- Denis Murphy, Winchester

Yes, it is the democrats that have been running this state into a hole that NH hasn't been in decades
- Jason, Epping

So how long are we going to quietly, stubbornly, and mule-headedly hang onto our dubious distinction of being "tax-free" and slide more deeply into debt? Is Governor Lynch hoping no one will notice the debt and finish out his term patting himself on the back for not enacting a broad-based tax? When are we going to get someone with some spine who will bite the bullet and tell us to tighten our belts (some more) so we can pay our obligations and not leave our children a crushing mountain of debt?
- Pamela Williams, Barrington

And for this, we can thank the Democrats who are ruining our state.
- Chris King, Manchester, New Hampshire

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"Stimulus may worsen state budget woes"
The NH Union Leader, Op-Ed, By Charles M. Arlinghaus

The bill formerly known as "stimulus" has gradually morphed into a gigantic Christmas tree that no longer promises to help, but rather threatens the fiscal stability of state and local governments.

With recession on our minds, the federal government began pushing the idea of using government spending to help the economy a year ago. In February 2008, George Bush pushed through stimulus checks to taxpayers costing a mere $168 billion -- chump change after the trillions in debt he was busy running up.

It turned out neither the $500 check he sent you nor the massive deficit spending managed to stave off the recession. It doesn't matter; we're going to try it again anyway.

Last October, they upped the ante and decided to print $700 billion to send initially to banks and then to car companies. Without it, we were told, we faced another Great Depression. It had to be a huge number to convince markets we were serious. So far, they're not convinced.

The next big idea was infrastructure. Instead of giving you money to pay bills or buy a TV, which is made overseas anyway, let's take lots of government money to pay directly for roads and the like. The idea is to give the money to state and local government to build roads, fix bridges. We build stuff, right here, right now.

President Obama talked about spending money only on "shovel-ready" projects. We weren't going to plan new things that would take a while, but we would immediately infuse the economy with billions of dollars in every state. The phrase "shovel-ready" was a good summary: "shovels" because these projects were substantive dirt-and-bricks-and-pavement kinds of things, and "ready" because it would happen immediately, if not sooner.

Remember, though, that Washington is a town without fiscal discipline of any kind. A giant spending bill like this wanders through, and everyone will take the opportunity to add a little here and there. As a result, the bill has become enormous and complicated.

We're told that the Senate "slashed" $100 billion off the House version of the bill, yet the Senate ended up spending $19 billion more ($838 billion versus $819 billion, according to Bloomberg). That sort of math goes a long way toward explaining the nation's debt problems.

Simplicity has also gone out the window. The spreadsheet summary of the bill contains more than 400 line items (I've posted it on www.jbartlett.org). The Washington Post published a flowchart of where the money is going. It will make your head spin.

If the $800 billion were divided up by population, New Hampshire would receive a grant for about $3.5 billion. Instead, we were told this week that the state will receive about $130 million for roads, bridges and trains.

The rest of the money will go to programs that don't necessarily need a shovel and aren't ready. In fact, the Congressional Budget Office found that only $107 billion (about 13 percent) of the package will be spent the first year. By the end of 2010, about half of the so-called stimulus will be busy providing "immediate help."

The sad truth is that any bill in Washington becomes a political football and is used to pay for other programs people weren't able to pass on their own. Just about everything the government does will be rationalized by some congressman as "helpful for the economy."

At the state and local level, everyone still sees dollar signs. Local wish lists total $2.4 billion. How many of those projects are things we would do if we were spending our own money? The danger is using the lure of "free money" to do things you might not otherwise do instead of paying for existing priorities.

At the state level, there is a risk that lawmakers will use one-time bailouts from the feds to cover up a serious budget problem. With revenues continuing to deteriorate, the next budget will be close to $600 million short, even if lawmakers freeze state spending for two years. If that hole is papered over with one-time grants from the federal government, the problem will be merely delayed, not fixed.

Bailouts and other one-time grants ought to be used for projects, such as bridges, that are one-time capital expenses. A one-time windfall can't support operating expenses that will recur year after year.

We stand at a crossroads. The governor has a great opportunity to lead us down the right path when he presents his budget tomorrow. At the beginning of the year, he said that we got into this budget mess ourselves and we need to solve it ourselves. His budget can and should be based on a solid financial foundation, not one-time, evaporating revenue. That sort of fiscal leadership will earn broad support irrespective of partisanship.
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Charles M. Arlinghaus is president of the Josiah Bartlett Center for Public Policy, a free-market think tank in Concord.
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READERS' COMMENTS:

The lefties revisionist history is at it again. Mike, check the actual votes on the Bush tax cuts. There were plenty of Dems who stuck their finger in the air and voted what was politically expedient at the time, the same could be said on the Iraq War. By the way, you might want to google, "a rising tide lifts all boats..."It may surprise you to realize it wasn't a Republican who coined the phrase. And just because you read the Huffington Post or Krugman does not make you any different than someone who listens to Rush or Fox news. Get off your HIGH horse before it bucks you off.

Bob formerly Robert Mann formerly William from Deerfield fears the debt, huge govt, greed, cronyism of the Republicrats but looks the other way when the chosen one nominates tax cheats and threatens to bankrupt the next 7 generations of Americans. Why would he care, he ain't paying the bill.

Word on the street is the Obama administration is looking into naming Bob/Robert/William from Deerfield as his next Stimulus Czar as his multiple personality syndrome could prove helpful in the vetting process as he has trouble remembering what his name is and can't possibly remember if he paid his taxes 5 yrs ago...
- Kyle, Bedford

Mike Lane - it is the truth: the Democratic Congress, including your guy Obama, voted FOR those budgets. Some of the only times he didn't vote 'present'. I know it is hard for you to accept, but make like Obama - have a smoke and relax.

Obama can whine about the deficit he 'inherited', all he wants, but we know he is lying - Obama helped CREATE it.

And now that he's in the White House he wants to surpass his previous work. In a single year.

That's what I call the audacity of a dope.
- Tom, Campton

Bob "bring me back to the 1930s" from Deerfield. My friend I know you are a Senior and wish for Obama care so that the government will force me to pay people to wipe oatmeal from your chin, but get real. The last time big socialist government ideology was employed was during the late 1970s and look where it got us. The peanut farmer from GA gave us double digit unemployment, inflation, and a misery index off the charts. When will you silly marxists learn that flooding the country with useless services just creates more problems in the end.
- Alex K., Deering, NH

Ah, Nick of Manchvolga, the old "real Republican" argument. We have had "real Republican compassionate conservatives for eight years just recently and they increased the size of government by 60% and doubled the deficit. Now, I know that whoever makes any misteaks can't possibly be a Republican conservative in your mind but that has to do with the echoes of Faux Noise. Let them die down and you will see what damage your cohorts have wrought. It turns out that some fears are real. I fear the greed, debt, huge government, cronyism, lack of science, religious fanaticsm and just plain stupidity of the last regime. Evidently you would like more of the same. I don't think we can afford it or you.
- Bob, Deerfield

Ahh, yes, Tom the 6 years that the GOP controlled congress and the 8 years that Republicans controlled the White House are of no consequence. Only the two years that Democrats controlled congress matter in your world right Tom?

Every time I hear the old "your party controlled congress for two of those years" defense it makes me chuckle. Bush controlled the veto pen and he never let anything get past his desk he didn't agree with, including improved healthcare for children in the form of SCHIP (which was supported by a majority of both parties, so much for the consent of the governed), and stem cell research. The Democrats never had enough votes to override a Bush veto and anyone who was even remotely paying attention or not in a kool aid induced haze knows that perfectly well.
- Mike Lane, Manchester

William - the debt increased by 4-5 trillion $ while Bush was in office, depending upon how you want to look at it. Let's not forget the Democrats controlled Congress the last 2 years when deficits really took off, and that Obama voted for those spending bills and for TARP.

Obama is going to exceed that total in a year, two tops.
- Tom, Campton

Ah, Nick of Manchvolga, the old "real Republican" argument. We have had "real Republican compassionate conservatives for eight years just recently and they increased the size of government by 60% and doubled the deficit. Now, I know that whoever makes any misteaks can't possibly be a Republican conservative in your mind but that has to do with the echoes of Faux Noise. Let them die down and you will see what damage your cohorts have wrought. It turns out that some fears are real. I fear the greed, debt, huge government, cronyism, lack of science, religious fanaticsm and just plain stupidity of the last regime. Evidently you would like more of the same. I don't think we can afford it or you.
- William, Deerfield

Stephen - that's a nice point, and it is true nationwide. "Shovel-ready" means irrelevant and unwanted. Obama's "stimulus" gives us $1 trillion of nothing.
- Tom, Campton

Nick from Manchester, I hate to break it to you but Democrats have never taken the position that tax cuts for the wealthiest Americans will trickle down to the poor. Republicans own that philosophy lock, stock, and barrel. You can scream your code words of socialism and Marxism from the highest roof tops. People are on to the fear mongering. People are losing their jobs left and right, your tired slogans ring hollow.

Alex K from Deering, I love you how dittoheads repeat the tired old lies of Rush Limbaugh and the Faux News noise machine. It was written right into the Community Reinvestment Act that banks should lend in keeping with safe and sound business practices, but I am sure you never bothered to read the actual legislation. No one forced these bankers to cook the books. This is a direct result of the repeal of the Glass-Steagal act passed after the Great Depression to prevent exactly what has occurred since the Republican Party rolled back the regulations imposed to prevent a repeat of the Great Depression.

I mean we actually have Republican Senators standing on the floor of the Senate lying through their teeth trying to create the myth that FDR's policies exacerbated the Great Depression. Yeah right, that is why he was reelected 4 times and is remembered as one of our greatest Presidents. Hoover was laughed at because he kept saying "we've turned the corner' over and over again. Sounds remarkably like Dick "last throes" Cheney talking about Iraq or John "the fundamentals of our economy are sound" McCain during the campaign. Republicans are woefully out of touch.
- Mike Lane, Manchester

Take a look at the Washington Post breakdown on the House version of the "Stimulus" that Mr. Arlinghaus referenced through his link in his article. $637 BILLION in spending with $182 in "Tax Cuts" - which is what we need - except that the Congressional Budget Office noted that $100 Bil of the "tax cuts" are really spending since they are going to people who DON"T pay taxes! And the bulk of the remaining spending is on the Democrats investment in socialized medicine and extending unemployment, welfare and medicaid. What kind of "stimulus" is this?
- sandy, thornton

Ah, but Bob of Deefield, it is when Republicans act like Democrats and try those silly things which history have shown are failures that cause Republicans to be defeated. Now the Democrats are up to their old tricks and are trying those silly things again that will lead us down the road of socialism. Former Senator Sununu (who resisted the call to act like a Democrat) had the foresight today's housing problem and call for greater regulation of Fannie Mae and Freddie Mac, but Barney Frank had it blocked.

Woe is you indeed Bob of Deerfield, for the Democrats are going to milk the people of their hard earned money and spend it on their pet pork projects. Woe is all of us.
- Nick, Manchester

Its amazing that the UL continues to post Robert M. of Deerfields obnoxious rants, but is always censoring mine. Bob, I think its the other way around. Its people like you and your ultra lib buddies who learn to milk to the system and have ruinined it for the rest of us. Perpetual welfare, pro illegal aliens, obnoxious tax increases, EIC, getting paid to dig ditches just to fill them in later, status quo jobs which reward even the worst workers, terrible public schools where they teach nothing but lib spin, forcing banks to make loans to people who can't afford them, and the list goes on and on. I think its time you step back and look in the mirror. Your 1930s archaic thinking, and notion that digging a ditch will stimulate the economy was tried, and didn't work.
- Alex K., Deering, NH

In answer to your point about how many of these shovel ready programs would we be willing to pay with our own money, the answer in Salem is not many.

Some of the biggest items on Salem's "Wish List" have already been turned down by the voters. That is why they are shovel ready. The Selectmen proposed them and the voters said no.
- Stephen Campbell, Salem, NH

Oh, woe is me. Those Democrats are trying things. One of them might work. They are helping out all those scummy little poor people who don't have think tanks and who knew that there was a housing bubble as I did not. No, don't do that. No, don't try that. The clarion cry of the defeated Republican conservative. We've found out how to milk the system and if you change things we will have to work for a living. We don't want those pick and shovel jobs because we are used to sitting back and criticizing others for a living. Oh, woe is me, Oh woe is me
- Bob, Deerfield

Lawmakers need to spend only money the State has, appropriations are not a fiscally responsible way to budget. State employees need to oust the SEA and crawl out of the 1950's and let agencies be run like business units, not like individual fiefdoms. Employees need to be held accountable, and a pay for performance system needs to be implemented. Managers who can actually manage need to be hired. I hope it happens in my child's lifetime.
- Dorothy, Concord

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"Lynch's new budget contains good ideas"
The NH Union Leader, Op-Ed, 2/25/2009

Gov. John Lynch's proposed budget for 2009-2010 creates important policy priorities and sets a good path not just for the rest of the budget process but for the future.

I have been critical of the budget for not moving revenues and expenditures closer to balance over the next 2 1/2 years and instead relying on one-time revenue sources to delay the hard decisions. We shouldn't lose sight of that, but the budget also includes a lot of good ideas that deserve to be implemented.

The reality of the budget is dictated by the serious financial crisis. In the four months remaining in the current two-year budget, the governor estimates a deficit of $125 million to $140 million. He must adjust spending and revenues to erase that deficit and then close a shortfall in the next two-year budget.

According to the governor, it would cost $1 billion more than we can expect to raise in current taxes to fund agency budget requests. The agencies never get what they wish for, but even a spending freeze would reduce the budget hole to only about $550 million.

There are two ways to cut spending. One is the hunt and peck method. People who don't manage departments and don't have detailed information hope to find the latest bridge to nowhere or state nursery we don't need. Some cuts will come from hunting and pecking, but the ideas tend to be more serendipitous and less strategic.

The governor pointed out a few hunt-and-peck-style proposals, such as cutting a geography program at Keene State, but the bulk of his savings come from something that we might call directed management. Gov. Lynch has 18 department heads and a host of agencies under his direction. His managers are much more intimately familiar with the details of their operations than he or anyone else in state government. The budget makes many changes that they came up with, but it also includes what used to be caricatured as "across-the-board cuts." Lynch doesn't make every agency cut 10 percent of its budget. Rather, he assigns a dollar amount to an agency and expects the management team to identify cuts in that amount.

This helps avoid a problem Gov. Walter Peterson has talked about. Peterson noted that when a governor asks his commissioners for cuts, the less helpful ones will propose cutting their most popular programs, knowing full well that no legislature would approve such a thing. Directed management avoids that by specifying not the program but the dollar amount.

Lynch's proposed budget directs unspecified cuts in the Bureau of Land and Tax Appeals, Health and Human Services, the judicial branch, the legislative branch, the Executive Council, Safety, Transportation, the Liquor Commission and the Community College System.

He cuts more than $65 million through these back of the budget footnotes. Directed management is a good way to make the most of the valuable management team we have working in state government. We should hope the Legislature does even more of it as the budget moves forward.

More than just managing spending reductions, the governor has proposed changing how we do things. Much is made of the proposed 350 layoffs, but the governor isn't cutting state employees as much as changing what they do. In fact, the budget calls for the total number of state employees to increase from 12,439 to 12,517. Some areas may shrink, but there will be more employees in total.

Conservatives and liberals alike are looking at criminal justice reform. Two decades ago, Sen. Gordon Humphrey talked about electronic bracelets and home confinement. The governor has proposed revisiting that idea. Ten years ago, Charlie Russell (in a paper for the Josiah Bartlett Center) proposed better use of treatment programs to try to keep prisoners from coming back once they were released. The governor wants to look at that idea as well.

No one would suggest that violent crime doesn't demand swift and certain jail time. But the governor is absolutely right to look at ideas to save the state money and make society safer.

Many other principles in the governor's speech point the way forward to reform. The liquor commission's job can be equally well accomplished in "agency stores" as in state-run stores. In fact, wine sales occur half in state-owned stores and half in private stores. No reason then not to look at letting stores that sell wine and fortified wine also sell spirits.

The governor also had sensible things to say about combining state departments in the long term, eliminating dedicated revenues and sunsetting state agencies. If you want to rethink state government, that's a good start.
-
Charles M. Arlinghaus is president of the Josiah Bartlett Center for Public Policy, a free-market think tank in Concord.
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READERS' COMMENTS:

Ditmar, the difference is between asking the agency heads for suggestions and then trying to put those into state law OR in passing a dollar amount that they must meet. In the former situation, you can avoid any cuts at all because what "would have to be cut" is unspeakable. In the latter, they have no choice but to find something. The dollars must decrease no matter what.

Sike, I don't disagree that the budget doesn't do enough but I think that employing a directed management strategy is a good idea. They will need to find many more changes to make but that strategy is a good first step and should be expanded.
- Charlie Arlinghaus, Canterbury

I'd be curious to know how many state pension plans will come due in the up coming years and how much our taxes will be raised to pay for them? Also how many are still being offered as part of the hiring process to state workers?

I'm not a fan of having no prison time for felonies but see no reason why misdemeanor crimes can not simply pay a fine to pay for the felons. If they don't pay within six months then they are felons themselves. But ankle bracelets need to be monitored and that costs money also. Not to mention who is the lucky guy with connections to politics who gets to sell us the bracelets and most likely the monitoring contract. Then what do we do with them if they do something wrong again threaten them with a heavier ankle bracelet?

Just bring back the ball and chain and see how fast they pay to have it removed or bring back chain gangs and have them work off their frustrations for almost no pay and then manufacturing jobs will seem attractive in this country again.
- Ross, Derry

I'm wondering why and how "directed management" -- specified dollar cuts instead of percentage cuts -- will make agency heads not propose that politically unacceptable programs be cut back or eliminated. Whats the difference if the Governor cites a dollar amount, or the percentage that that dollar amount represents? Won't agency heads intent on protecting or expanding their area of the budget still propose politically unacceptable cutbacks?
- Ditmar, Hollis

Ruthie of Fremont, your "simple concept" doesn't work either. State receipts vary from year to year, and basing 2008 expenditures on proven 2007 receipts rather than predictions would also have put the state in a deficit.

Mr. Arlinghaus, I cannot join you in calling this budget "directed management." The Governor's touted review of "everything the state does" proudly exempted most of the charity functions and the entire Division of Nagging and Mothering. If there were ever a time for the state to pull back on dictating to municipalities and landowners, it is now, but there is no policy change to yield to austerity.
- Spike, Brentwood NH

If the Governor and the politicians of this state didn't ASSUME the amount of money coming in, this wouldn't have happened. Budgets should be based on receipts, not on assumptions. If you create next years budget based on this years receipts, then the overspending will be kept in check. If you get more receipts than expected, it goes into the rainy day fund for future use. It is a simple concept and I fail to understand why politicians don't get it.
- Ruthie, Fremont

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"We shouldn't pay for Chicago's boondoggle"
By CHARLES M. ARLINGHAUS, The NH Union Leader, Op-Ed, Wednesday, March 4, 2009

If the mayor of the city of Chicago wants to waste $20 billion on his airport, it shouldn't matter to the people of New Hampshire. Unfortunately, what happens in Chicago affects whether our roads are repaved and our bridges are rebuilt.

Political power determines which giant piece of public works excess we get to watch in any given decade. Granite Staters have had a ringside seat for watching one of the biggest boondoggles in American history. The good people of Boston decided that their city would be much prettier if they could take the Central Artery and put it in a tunnel so we didn't have to look at the ugly elevated highway.

It would look a lot nicer, but it was really expensive to do. The taxpayers of Boston didn't want to put up the money, and neither did the taxpayers of the whole state. Who could blame them? It would cost billions of dollars that wouldn't then be available for other, more pressing needs. Then good news for them came from Tip O'Neill.

O'Neill was the legendary speaker of U.S. House of Representatives at the time. He was a Bostonian and famously said "all politics is local." The wishes for a prettier Boston could be fulfilled if he could tap into his power and have the whole country, instead of the locals, foot the bill. The project wasn't important enough for locals to decide to do it, but federal money is free money, so what the heck?

What became known as the Big Dig ended up officially named the Tip O'Neill Tunnel. It was estimated to cost $3 billion when it started, but it will cost $22 billion when all is said and done.

Because O'Neill was so powerful, your gas taxes and mine flooded Boston. That's the same reason we almost had a Bridge to Nowhere two years ago. Republican Sen. Ted Stevens was the powerful chairman of the Senate Appropriations Committee. As long as he was in charge, there was no need for states to be sent money according to their population or number of road miles. No, the right formula was more money for me because I'm in charge.

The bridge was stopped and Sen. Stevens was bounced from office for corruption a few months ago, but not before he showered his home state with our money.

Coming along this year is a boondoggle to make the Big Dig look medium-sized. Chicago's Mayor Richard Daley has the largest airport in the world, Chicago's O'Hare. He wants to spend an estimated $20 billion to build another terminal and runways and eliminate a small town in the area, generally "improving" the airport.

There is nothing wrong with that as far I'm concerned. Some mayor wants to make changes to his airport, that's his problem. I'm not going to tell Chicago what to do anymore than I complained to Mayor Frank Guinta when the Manchester airport cut its budget last week.

The difficulty is that Mayor Daley doesn't want to run his airport by himself. He doesn't have the $20 billion he wants to spend. He doesn't want to raise taxes to get it. The airlines don't think the airport needs the changes, and the state of Illinois won't pony up the cash. So what's a poor mayor to do? He wants you and me to pay for a project that isn't important enough for his own state to fund.

The airport boondoggle looks like a really bad idea. But I shouldn't care. If Illinois wants to do something stupid, what's it to me? I live in New Hampshire. If we took the transportation money the federal government wants to give us back and just divided it up by population and road miles (there is actually a formula), no one would get extra because his senator was more powerful than someone else's. More importantly, decisions about what's important in Illinois would be made by people in Illinois, and you and I wouldn't have to have an opinion.

In New Hampshire, we do a better job of this than most states do. Money transfers from the state government to local governments are done by formula. The millions in revenue sharing are sent by formula, mostly per capita, regardless of who happens to be Senate president or House speaker. The governor can't help Hopkinton. It gets what it gets.

We should be careful with our own stimulus money so that we don't end up picking winners and losers. When they do it at the federal level, we're all losers unless we have a really big airport or the speaker of the House lives nearby.
-
Charles M. Arlinghaus is president of the Josiah Bartlett Center for Public Policy, a free-market think tank in Concord.
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READERS' COMMENTS:

I am from a Chicago suburb near the airport. Mayor Daley is a true autocrat of the worst kind who is tearing apart a neighboring town of mine to enrich his contractor friends and empower himself in the Chicago suburbs. The cost benefit analysis for the expansion is a sham and no effort is being made to re-assess the plan as a result of the economic downturn and drastic change in air travel demand. The FAA is clearly a partner in crime.
- Don baker, Elk Grove Village, IL

Tim of Mason asks, "how many highways would we have"--at once implying that I am an anarchist and that without the DOT we would have holes in the ground instead of roads. Although this is off-topic, just observe that Wal-Mart does a better job of adapting to New Hampshire's growth than government does either at getting cars in and out, or at teaching Wal-Mart's cashiers arithmetic. My perennial, modest proposal: Let's sell one of the turnpikes--you get to pick it--to see an example of efficient management.

I rebutted Robert's argument, and I use the term loosely: The Big Dig cost overruns were not so much Bechtel overcharging than it was politicians using the project, and the unacceptability of cancelling it halfway, as cover to toss around billions to local political constituencies for buy-in. Not all his polemics need rebutting, nor your claim that bank executives' salaries are a major national problem. Other people's success is not what made you fail.

No, Wall Street does not approve of Geithner salivating over soak-the-rich taxes. It fears this fool with newfound magical power to print money and spread it around to imitate prosperity.
- Spike, Brentwood NH

Tim - the markets were up today because the Shanghai Composite was up over 6% yesterday. That's right, China, not the USA, is attempting to lead the recovery from this global downturn. The world has given up on any hope of leadership from the clueless Obama. This is a humiliating turn of events, nearly as humiliating as having China refuse Hillary Clinton when she begged them to continue buying treasuries to finance Obama's unprecedented debt.

As for whether the markets approve of Obama's policies or not, we can have that discussion after the markets regain the 33% in capitalization they have lost since Obama won the election.
- Tom, Campton

Tim & Robert/William/Bill (or whatever you call yourself today from Deerfield),

I don't need to come to the defense of Spike as he seems to do fine proving the lefties incapable of independent thought. But I would like to comment on Tim's and Robert silly comments.

Typically what happens when it comes to government gauging the true cost of a govt program is to underestimate the costs of the project. Tip sold the bill of goods at $3 billion knowing full well that once the project started, we weren't going to pull the plug. As Tip stated, all politics are local. So compare Bedford's estimate on a new high school, it was passed at $45million but once construction was nearing completion, we were told it was actually north of $60 million and they still want more money. Does this answer Robert's silly assertion?

And Tim, if you think Geithner's comments today had anything to do with the market rise, you are a bigger fool than letting on. China's announcement today had a much bigger impact although fleeting it will prove to be. China is notorious for propaganda maybe more so than the useful idiots in DC. Sell into the rally, we're going lower.
- Kyle, Bedford

Spike: "If he actually favored "control of the citizens," the solution is to leave most money in citizens' pockets rather than taxing it away."

And how many highways would we have? Oh yeah, none.

You totally avoided responding to Robert's argument, that contracting the work out led to billions of $ more than budgeted.

"He wants a world with everyone on the government payroll."

Not sure where he said that. But I suppose you favor doing your banking with the "Capitalist" institutions who are on the govt teet. Let's allow them to exist but have a national bank which is FDIC insured and bring a small interest rate. I'll take that bank any day knowing the CEO isn't bringing in million dollar bonuses when they lose billions.
This just in, Geithner says we need to tax the rich and the market goes up, guess that means wall street likes the idea.
- Tim, Mason, NH

With Obama and the left wing dems in charge you can expect to see these foolish boondoggles all over the country as the 'Bama Bucks flow out of DC. This maqn is doing more damage to this country than we have ever seen.
- Brian, Farmington

Moreover, Charles, "picking winners and losers"--that is, coercively overriding the decisions we would make as individuals--is a power it is impossible to exercise in the "public interest," and whose only obvious purpose is sale to private interests.

Robert of Deerfield's gripe against the Big Dig is not the many payoffs that were made to "community interests" and eco-gadflies, but merely that the technical work was done by professionals and not by the hackarama. He wants a world with everyone on the government payroll. Only such a world offers influence to gadflies who cannot persuade except through name-calling and scorn. If he actually favored "control of the citizens," the solution is to leave most money in citizens' pockets rather than taxing it away.
- Spike, Brentwood NH

...nor should we be bailing out the catastrophe that is California. If Obama keeps this up, the entire country will collapse to the condition California is in.
- Tom, Campton

I love it when the libertarian crowd uses corrupt privatized programs to demonstrate the horror of the government. The Big Dig is a wonderful example. I didn't know that they went from $3 to $22 Billion but I am surprized that anyone thinks that this is the end of the expense. "Tunnel Accomplished" would make a catchy banner. The tunnels leak, tiles fall and kill people what a hoot they say. Compare it with the Fitzgerald Expressway. Done by government employees, came in on time under budget and lasted many years even though it was underdesigned. Get rid of all these private contractors and go back to government employees. Just like the army, they are cheaper, better and actually under the control of the citizens.
- Robert, Deerfield

I'm sure Mayor Daley will make the argument that since Chicago is a major airline hub, travellers from all over the country will benefit from the 20 Bil we'll thoughtfully provide the city. I'm sure he'll get the full backing from Obama, since he's another crooked Chicago Pol.
- steve, nashua

But shouldn't the State gas tax be shared based on the number of registered vehicles in each municipality, or the miles of roads?
And shouldn't the Rooms & Meals be just a direct return to the municipality that housed the business? Or better yet... never taken from the business that created it?
Shouldn't those that create revenue be the true recipients? Not just those that crave it.
- John Edward Mercier, Belmont

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"The governor's strange proposal to raise highway money"
By CHARLES M. ARLINGHAUS, Op-Ed, The NH Union Leader, March 11, 2009

The State of New Hampshire wants to pay itself $120 million with interest. This odd financial ploy from Gov. John Lynch's budget started as an attempt to get around legal restrictions on certain revenue and to avoid raising the gas tax. Instead, the New Hampshire House voted last week for the strange gimmick and to almost double the gas tax.

Gov. Lynch has traditionally opposed raising the gas tax and hasn't announced whether he would veto the House's hike. Instead, in his budget he came up with a clever way to get around legal restrictions on the use of transportation money by having the state sell a piece of road back to itself.

It's well known that the state constitution requires gas taxes, vehicle registration revenue and some other fees to be spent only on highways or traffic supervision. The money can support things like state police doing highway enforcement, but otherwise it has to go toward building and maintaining roads.

Tolls collected on the turnpikes are even more limited. Tolls are a user fee and can be spent only on the toll roads themselves. They are kept in a separate turnpike fund for use on what are legally defined as the turnpikes. After the toll increase two years ago, the turnpike fund is flush with money that can't be spent on any other roads.

Here's where clever accounting comes in. The eastern turnpike includes Interstate 95 up to the Spaulding Turnpike and the Spaulding Turnpike through Rochester. The state wants to take the remaining mile of I-95 not currently part of the turnpike system and transfer it to the turnpike system. The turnpike in exchange would pay the highway fund $120 million plus interest.

At first it sounds goofy, like a man negotiating with himself in the mirror. But actually it is a clever way of dodging state law and using toll increases to fund not the turnpike but the rest of the roads in the state. The governor's budget included millions of dollars of toll increases. Raising a toll is not as unpopular as raising the gas tax, but toll money is more limited. This gimmick allows the state to use the money raised from new tolls to fund a $120 million purchase from itself, which frees millions of dollars from pesky legal restrictions.

The "sale" is expected to give the highway fund an additional $30 million in this budget and $15 million for the next six budgets after that plus interest.

For lawmakers looking to spend more money on roads, the other way to do it is to simply raise the gas tax. A group in the House has been working to do just that and got passed a bill to almost double the tax over the next three years. More surprising is that the House didn't do this instead of the governor's gimmick. It did both.

If you thought the recession would cause lawmakers to be cautious about raising tolls on people or raising the gas taxes they pay, you'd be wrong.

Listening to the rhetoric, you'd think New Hampshire's roads and bridges were falling apart and the highway fund was on the verge of insolvency. Frost heave season notwithstanding, it isn't true.

The state maintains a "red list" of the state and municipal bridges most in need of repair or replacement. Two years ago, the Department of Transportation reported that in the prior decade an average of 43 bridges came off the list each year and 30 bridges were added. In the most recent year of the study, 23 bridges were removed and nine added. So each year we remove more than we add.

The state adopts a 10-year highway plan as a list of the transportation projects we want to fund over the next decade. The plan adopted last year contained $2.3 billion worth of projects and anticipated only $2.1 billion of funding. If this were a budget, there would a $200 million deficit. But the plan isn't authorized spending. It is merely a priority list for how we spend the money we anticipate taking in.

The federal stimulus money will probably fund most of the $200 million by itself. The gas tax hike alone would fund three times that amount, and the weird selling of the road to ourselves would also cover most of it. If there isn't a crisis, we should think carefully about whether a strange accounting gimmick to bypass state law is a good idea.
-
Charles M. Arlinghaus is president of the Josiah Bartlett Center for Public Policy, a free-market think tank in Concord.
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READERS' COMMENTS:

It's actually a pretty cool idea.
- Art, Portsmouth

This shows exactly what I have been saying for awhile. They ask for money for one thing and find away to use it for something else. Makes you wonder why the highway fund is the way it is. Imagine what they can do with increased tolls, increased car registration fees and increased gas taxes? But don't worry they will be back in a few years telling you how the highway fund is broke!!
- Bill B., Pelham

PS--J of Loudon, the "game-playing" you describe sounds like our whole "fractional reserve" system, under which a bank that takes in $1 is allowed to loan it out seven or eight times at once. We assume not everyone will default at the same time, nor will all depositors ask for their money back. The bank can make more profit and the economy can grow faster, under assumptions that are valid ALMOST all the time.
- Spike, Brentwood NH

Please take note, everyone who is advocating casinos or new taxes on the assumption that you can restrain politicians by requiring that the revenue be applied toward desirable goals.
- Spike, Brentwood NH

Sounds like the Eron school of Math. I say lets sell the entire state to ourselves and then give us each a refund. This kind of game playing is what got the economy where it is (banking and wall street games). If there is $120M avialable to do this then free it up and create some jobs today. Gov, How about you hire say 3,000 people for a year at 35K each to make sure no one steals the roads ( traffic supervision). Then they would not have to be paid unemployment, assistance $$ and could pay their mortgage. If I sell my driveway to myself can I get a tax write off on my income tax for the interest I pay myself but then call it non-income? Politicians side stepping the very laws they put into place. Does Gregg get a vote in where the shifted money goes, I want to be in the ground floor with him and his bro.
- J, Loudon

Sound like a duck
and look like a duck.
What a rip off.
Tax payers beware.
- amos, plymouth

It's simple, the Dems will rob, cheat, steal and spend every bit of money they can get their hands on. It is a disgrace, here in New Hampshire, and in Washington. The people are getting angry out here on the streets.
- Harry, Wolfeboro

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"Charles M. Arlinghaus: Instead of throwing tea bags, do something productive"
By CHARLES M. ARLINGHAUS, Op-Ed, The NH Union Leader (Online), April 15, 2009

A bunch of so-called tea parties being held today across the state and the country have the potential to either mobilize a useful check to influence policymakers or live up to their namesake, one of the most shameful acts in American history.

Activists around the country have organized a series of protests to take place on the same day federal income taxes are due, which is today. Using TEA as an acronym for "taxed enough already," protesters describe their rallies as tea parties, taking the name from the 1773 protest against tea taxes that we know as the Boston Tea Party.

The general idea is to bring together people who think that taxes are already too high (taxed enough already), and that rather than increasing our taxes in these difficult economic times, policymakers should restrain spending and leave more money in individuals' pockets.

The largest of these events in New Hampshire is the Manchester version at Victory Park at 5:30 this afternoon (4/15/2009). It also happens to be the one at which I am speaking.

Although they have adopted the name of the shameful Boston Tea Party, this movement can only be successful if its leaders leave behind that horrible legacy and instead do something productive.

In 1773, colonists were upset at a tax on tea, an incredibly widely consumed beverage at the time. They tried to turn away ships carrying tea that was to be taxed before being sold to consumers. After protests failed, a mob gathered; its members disguised themselves as Indians and destroyed the tea by throwing it in the harbor and ruining it. The value of the shipments ruined would be in the neighborhood of $10 million today.

Upset about taxes, they took it out on someone else's private property while disguised as Indians. I don't like the tax the government is making you pay, so I'm going to destroy millions of dollars of your property. Almost everyone outside of Boston thought it was a huge mistake. Even Ben Franklin was horrified.

But today's protests needn't be as ridiculous and unproductive as the event they are named after. The point of a rally isn't just to gather people together so they can vent about how annoying the policy choices of other people are. Instead, the point ought to be to bring people together so they can more effectively advocate for their preferred choices.

The national financial picture receives a lot of attention and generates a lot of protest. State and local budgets receive much less attention even as they ratchet up spending and pass job-destroying taxes in the midst of a recession.

The simple truth is that pressure for spending is more immediate and more visible than pressure against raising taxes, except during a narrow few weeks before an election. After the election, when budget decisions are being made, there is a steady stream of people who have sensible-sounding ideas for spending more money -- a little bit here and a little bit there.

In the face of a problem like a recession, spending money has the psychological effect of appearing to do something. Restraining that impulse and keeping money in people's pockets is kinder to an individual, but it seems passive and a less forceful answer to the question, "what are you going to do about this?"

Surrounded by constant pressure to maintain certain programs and spend just a little bit more on this or that, human nature dictates that you will succumb at least a little bit in the absence of any countervailing pressure. This suggests an obvious role for people who are "taxed enough already."

While we depend on lawmakers to make choices between competing priorities, they need to hear more often from people who want spending restrained. Most lawmakers hear routinely from people who want more money for some program and almost never from people who want their taxes to go down. During election season, potential voters will complain about higher taxes, but then they go away for two years and leave the playing field to those who will cajole a bit more money for this or for that.

If you're going to protest today, make a commitment to stand up for what you believe by actually doing something that really matters. Contact the people who represent you, not to yell at them, but to lobby for your point of view. They need to hear from you. If you don't intend to do anything else, save everyone some time and just go throw a tea bag in the river and pipe down.
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Charles M. Arlinghaus is president of the Josiah Bartlett Center for Public Policy, a free-market think tank in Concord.
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READERS' COMMENTS

The tea party concept is not radial nor a draw for activists. This is a no different than the democratic rallies all through out the election. The tea parties are to say enough to the wastful spending and rampant printing of money. Soon we will have hyper inflation and people will wonder why. These are peaceful non-violent groups, why are they being singled out as extemists. No one called the big democrat rallies as a red alert extremist gathering. It is OK for people to gather and have their freedom of speech. We need more rallys or our representatives will not hear what the people want. We need to make our voice heard, not with violence but with civilized gathering.
- Tammy, Lancaster

Great points Charlie! You can bitch and moan and yell at your tv or in unison at an event all your want- and thats great do it. But it doesn't actually affect change unless you call your elected officials, and work to get those elected in which you believe with!
- Tim, Portsmouth

It was a wonderful Tea Party to express and put into view in a peaceful assembly that many of us believe our government is following a historically known faulty course of action--borrow, increase debt, and spend, spend, spend what you don't have. Being one who does talk, write, email, etc. to my representatives, I know some won't pay any attention to my individual voice. They prefer to go with their party platform-and tell me their opinion shall prevail--now. So I see/saw the Tea Party as a better means to show my voice is not a lone voice and the issue is not one that can be resolved without working together regardless of political party affiliation and working with the wisdom of the past of those nations and peoples who have been successful in overcoming such situations. As they saying goes, "History repeats itself." Bottom line the collective "we" have a choice to what history we want. And are individually and collectively responsible. Lastly, but as more importantly, the Bible speaks to the Way that works and chronicles those who failed to follow God's principles and honor Him and His ways. It tells us what has happened and what will happen to all nations that choose the wrong models to follow. It tells what happens to those that do follow His ways. And it has happened as the Bible states and is happening.
- Jan, Londonderry, NH

William, send me an email if you'd like (arlinghaus@jbartlett.org)so we don't annoy people by clogging this board.
That is more or less what I believe. A protest itself doesn't help effect. People who protest ought to go further than that if they truly want to change things and not just complain. I think many people who will protest want to continue beyond today. If not, change will not happen.

Because a protest is not productive in and of itself does not mean it ought not happen. Quite the opposite. One hopes that speakers and interaction with others will spur a group of people to wish to do more.

The Boston Tea Party is another matter. As a historical matter unrelated to today's events, it was shameful, disgraceful, and a good example of vandalism masqueading as political action. Its instigators moved beyond protest to action but not constructive action. It is not shameful because it is a protest. Rather it is shameful because it involved the misguided destruction of private property, something every conservative should abhor.
- Charlie Arlinghaus, canterbury

I'll be drinking tea all day. Thanks for the idea.
- Tom, Dover-Foxcroft, Me.

I hate to stoop so low as to respond to Baghdad Bob, but come on: citing a few major programs and historical successes does not absolve government of the waste, abuse, stupidity and corruption it employs on a regular and widespread basis. The fact that we have an interstate highway system and a military is not an excuse for a profligate, unchecked government nor a green light to continually raise taxes, often with confiscation and punishment as the primary motive. Unless one is so poorly informed by the universal education system as to believe every dollar spent by government is spent wisely and properly, it seems reasonable to ask our elected officials to keep their hands out of our wallets during a tight economy. Or perhaps you feel that opinion brands one as a violent domestic terrorist, as Obama's DHS would have you believe. By the way, it's "pique," not "peak." Dictionaries: try one today.
- Rick, Portsmouth

No, Charlie.

"If you're going to protest today, make a commitment to stand up for what you believe by actually doing something that really matters."

You suggest that protesting alone doesn't matter and isn't productive. You don't want people to be angry at their elected representatives. You want them to lobby and not yell. I get it--the Boston Tea Party is "shameful" and you think that there are far more "productive" things that can be done.

If that's the case, why speak at a protest--the stated goal of which is to show Washington that people are angry all over America?

If you don't think the protest is productive by itself, then why bother to speak?
- William Smith, Manchester, NH

I believe it is time for all us to enact term limits on all members of congress. We should all vote againist each and every incumbent to remind congress who they for. Their prevailing belief is that we are beholden to them when the exact opposite is true. Until we stand up to them, we will continue to suffer from their 'rule.'
- DN, Portsmouth

Robert is plying his usual spiteful partisanship to assert that any opposition to today's high taxes is opposition to everything good that government has done: his usual, contemptible straw-man that all his opponents must be anarchists. Charlie, do not take him seriously; we don't.

But William Smith is right: If you doubt the efficacy of joining to express opposition to the bailout culture, why are you speaking at one? Only NH Libertarians--who once took "Toward a Three-Party System," the national convention theme, and appended a question mark--are supposed to celebrate their own dithering.

Your solution (lobby your legislator) will give voters the false sense that they are having an effect and that they owe something to the legislator for listening, especially if he appears to bend on an issue or two (which is his stock-in-trade).
- Spike, Brentwood

Charlie,

Awesome piece. I have been feeling the same way for a while. The American colonists were impoverished by taxes, while we are being impoverished by debt. I am sure no one will be throwing their credit cards or their mortgage papers in the river. So in lieu of that I agree that writing their representatives in Congress and educating themselves more as to the problems we face is much more productive.
But we should not be littering Charlie. I think you know that.
- Dave Jarvis, Hooksett

William, I'm not sure I understand your question. You ask if I feel this way (think taxes are too high and spending is too high) why am I spoaking? I think most of the people going think taxes are too high and spending is too high plus the organizers asked me and I'm a nice guy.

The rest of the piece is of course a historical tirade against destruction of private property as a form of protest and an exhortation encouraging people who agree with me that taxes are too high and spending is too high to fight for policy change. I suggest a basic cause of higher spending and a course of action for people who wish to become more active.
- Charlie Arlinghaus, Canterbury

Frank, Manchester -
I don't need to thank anyone for a tax cut. We need massive spending cuts. The taxes should follow. Duh!
- Bob H, Londonderry

Instead of wasting time with public protests which vent your anger and do little else why not turn to something more productive. Find or create an organization to track who in the legislature, both Federal and State level, is voting for these taxes, publicize their names, and vote them out in the next election. That will make all of them sit up and take notice, believe me.
- Mark Givens, Bridgewater

Frank,

The national cigarette tax is proof that this administration has no problems increasing taxes on those who make under $250K. So you need not wait for an apology, as it is not needed or forthcoming.
- Jason, Peyton, CO

Why was the Boston teat Party a shameful act?
- Tim, Merrimack

Okay, let’s get this straight.
I am not expected to be angry that Shea-Porter and Hodes both voted against stimulus/bail out packages before the election to gain votes from those they know are angry with them?
As soon as their guy became president they were back voting against us - and I am not to be angry?
Instead of listening to groups who are promoting themselves I will be busy speaking with like-minded people who are truly concerned about the direction of our country.
Perhaps some of you missed the Washington Times report on how Homeland Security will be monitoring those who use the Internet and are known to oppose the federal government and state’s policies on spending, abortion, immigration, and probably those who strongly believe in the First and Second Amendments!
If I am at any type of rally it will be in Plymouth where I know the folks are truly concerned about the direction of this country.
bnyoung@metrocast.net
- Niel Young, Laconia

Charlie, you're under the mistaken notion that the people who represent us actually CARE. They've proven time and time again that they don't.

"Most lawmakers hear routinely from people who want more money for some program and almost never from people who want their taxes to go down."

That's absurd. Like they don't KNOW that an entire segment of their constituency wants lower taxes?

This is a protest by a bunch of like-minded people who are mad as hell with their Government. If this is the way you feel, Charlie, then why are you even speaking at this event?
- William Smith, Manchester, NH

And if it turns out that only those who earn $250K DO pay higher taxes; are you going to apologize for being wrong, Jeff? After that you should write a letter to President Obama and thank him and the Democrats for your tax cut.
- Frank, Manchester

"The point of a rally isn't just to gather people together so they can vent about how annoying the policy choices of other people are. Instead, the point ought to be to bring people together so they can more effectively advocate for their preferred choices."

Agreed. Let us all hope this leads to something more. It is wonderful to see these first stirrings of a liberty movement. Kudos as well to the great state of Texas. Why doesn't the "Live Free or Die" state join them?
- Tom, Campton

It is really amazing the interstate highway system, the 500 billion a year military budget, the universal education system and all the other fine things that they were able to afford in colonial times with that small tax rate. Also, their ability to give $750 billion of those colonial dollars to Hamilton to buy off his friends and get them to lend money to all the fat cats. I, for one, wish to go back to those times when the average life expectancy was 50 years, people died from bad teeth and reactionary jerks were put in stocks so that citizens in their fits of peak could throw garbage at them. The world would be a better place now if they had allowed honor killings and cutting off of hands rather than the enormous cost of prisons. Women put those bonnets on and get back to the kitc
- Robert, Deerfield

Charlie, if case you haven't noticed lately, the only time our representatives deign to listen to us is when they're up for reelection - no matter how we peons attempt to communicate with them. Instituting term limits at all levels of government would, I'm sure, improve hearing.
- R, Raymond

You mean mailing teabags to my representative is not the most effective way of bringing about change?
Thank you for a well thought out, logical editorial.
- Steve, Manchester

When you compare the taxation that caused the colonist to revolt, 3% if memory serves me right, with the confiscatory rates of today, and the even worse, and counter productive tax rates to Obama administration wants tomorrow, all I can say is that the Tea parties where needed about 50 - 75 years ago. And one last thought. If you believe only those who earn over $250,000 will pay higher income taxes you are kidding yourself.
- Jeff, goffstown

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"Following our neighbors to the land of low employment"
By CHARLES M. ARLINGHAUS, Op-Ed, The NH Union Leader, April 22, 2009

New Hampshire usually leads the rest of New England out of a recession, and as lawmakers put together a new budget, jobs should be first on their minds. However, current efforts in Concord pull up the welcome mat for jobs and threaten to undo New Hampshire's reputation as New England's first choice for new business.

The Northeast part of the United States is generally a land of high taxes and excessive business regulation. For decades, New Hampshire has stood out among its neighbors as a business-friendly state with welcoming regulatory and tax climates. The Wall Street Journal once referred to us as an island in a sea of socialism.

That perception may be a slight exaggeration, but there is a reality behind it. The Tax Foundation's annual study of business competitiveness routinely finds New Hampshire among the top 10 states, and our three neighbors among the bottom 10. Although our corporate taxes are among the highest in the country, lack of an income or capital gains tax is a significant incentive to entrepreneurs and business expansion in general.

One of the state's largest employers, BAE Systems, has its office on a lot that includes the state border. It is not mere coincidence that the company built on the New Hampshire side of the line.

While Boston has the significant cultural and educational advantages of a large metro area, New Hampshire has managed to carve out a low-tax brand in the Northeast. That brand is threatened by recent legislative actions.

In media reports, we hear regularly about the net number of jobs gained or lost. But what actually happens is that each year tens of millions of jobs are added to the economy and tens of millions are eliminated. For example, in the first quarter of 2008, we lost a net of 270,000 jobs. A total of 7.1 million jobs were created, but 7.4 million were eliminated.

So even in a down economy, there will be something close to 30 million new jobs created in the country this year. What we want is for New Hampshire to attract a disproportionate share of those jobs, as we have historically done.

Unfortunately, current legislative action is sending the opposite signal to entrepreneurs creating jobs and to companies considering opening new facilities.

The biggest bad signal is the imposition of a capital gains tax. With the high level of exemption, it may not affect you or me. But it is a tax on entrepreneurs and on investment in new business and the jobs that go along with them. The people who create jobs do so not for fun, but to make money. They want to create a business that has value and makes them cash. In the process, they employ some of us.

In today's economy, most of these businesses can be located in almost any state. In that sense, we are competing for their business. We want Mr. Smith to start his business here, not in Tennessee or in Delaware -- not because we love Mr. Smith, but because his enterprise brings jobs and other related activity to us. Mr. Smith is a businessman. If locating in New Hampshire will cost him more, he'll go elsewhere. The capital gains tax is a giant warning sign to him that locating here will not be as lucrative as locating elsewhere. It is perhaps the surest way to discourage job growth in New Hampshire.

In addition to this poorly conceived idea, the Legislature has also passed an onerous law that makes it harder to close a plant here than in the vast majority of other states. It, therefore, discourages opening one in New Hampshire. A bipartisan effort to lower the insurance tax and keep insurance jobs here has been suspended, sending the message to firms in that sector that we weren't serious about wanting them here.

With the budget situation still a mess, other businesses will be on the firing line. With our business taxes already among the highest in the country, any effort to increase them or change the effective rate will cost us jobs and job growth. Trying to squeeze more money out of the businesses we have will encourage them to leave and others to stay away, essentially sacrificing the long-term health of the state for a temporary budget fix.

We can emerge from the recession the economic leader of the region we've been for decades or become an economic backwater like some of our neighbors. The Legislature is two steps down the wrong path. It's time to reverse course, not go further into the woods.
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Charles M. Arlinghaus is president of the Josiah Bartlett Center for Public Policy, a free-market think tank in Concord.
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READERS' COMMENTS:

As hard as I try, I cannot make any sense out what Robert, Deerfield is saying.

"When you cut taxes you get back about 10% of the money that the government loses."

No, when you cut taxes, the taxpayer (you) get back 100% of what the government loses. This money is then either invested or spent. In either case the economy expands.

"When you increase taxes, the economy grows and jobs are created".

Where has that ever happened? I know I'm going to hear about Clinton and the 1990's. But even then, the debate among Clinton's economic advisers was not WHETHER the increases would slow economic growth, but HOW MUCH they would.
- Paul, Fremont

A brilliant analysis! In summary, decisions have consequences.

The plant-closing bill doesn't just put new duties on plant owners; the need to give advance notice of a closing becomes a self-fulfilling prophecy. Customers don't pay promptly and vendors become more insistent on terms on any whiff that the business might not be permanent.

When we "protect workers" or specific classes of workers, the effect is to make businesses more reluctant to hire them. We can criminalize such workarounds but we cannot keep them from picking another state. Voters must realize that this is not an effect of "corporate greed" but a consequence of deliberate government policy.
- Spike, Brentwood NH

Business friendly usually means that the residential taxpayer foots the bill, as usual. Look at New Mexico and their pursuit of airplane builders and the money that was pumped into VLJ manufacturers in the name of jobs. In some cases, it can mean that the state takes, by eminent domain, a person's land and gives it to a business. I'm sure the Live Free or Die folks would love that. What about giving tax breaks to or government funding of sports stadiums? How does that sound? What about Tax Increment Financing? What happens when the business gets a tax break and fails before paying back what they owe? NH has the fortune of having a highly educated workforce capable of designing and producing high-tech, cutting edge products. Those are the industries which will survive. As ditch digging becomes more automated and the need for computer skills to operate ditch digging equipment grows, the need for uneducated ditch diggers will drop.
- Texter, Newfields

Continuing on with this fantasy about the "free market" is quite annoying. It turns out as any first year economic student and student of history knows, this is merely a continuing attempt to income shift (what these people like to call socialism if you apply it the other way around) from poor people (those that actually work for a living and produce goods and services) to those who shuffle paper for a living, take tax breaks, and own most of the wealth in America. When you cut taxes you get back about 10% of the money that the government loses. When you increase taxes, the economy grows and jobs are created but, unfortunately the rich, who control what our government does, what lies media tells you and what keeps your wages down doesn't give the greedy the income levels to which they would like to be accustomed.
- Robert, Deerfield

Taxing private, at risk capital in NH means, simply, that there will be less of it. Its short term thinking to attempt to balance the budget at the expense of discouraging capital to be invested.

It will discourage entrepreneurs, as well as any wealthy retirees, some of whom already pay the 5% tax on their "unearned" income.
- Ditmar, Hollis

There are many examples of states which are business-friendly. Unfortunately, with the (perhaps temporary) exception of New Hampshire, none of the them are in New England. As a consequence, the region's decline accelerates: a shrinking population, a crumbling infrastructure, corrupt governments, fiscal disasters, loss of financial and intellectual capital, and so on.
- Tom, Campton

It's true that NH was once the shining example in a sea of dull states.

The goal of liberalism/socialism/progressivism, whatever it's being called today, is to lower (flatten, equalize) the standard of living everywhere.

If everyone and every state is equally miserable, it won't make any difference where a company, and its jobs, locates.

Democrats know that their time in the sun in this state may be limited, so they want to make sure they enact all the items on their agenda as quickly as possible.

To our detriment, they seem to be succeeding.
- Paul, Fremont

I wish Governor Lynch would make a point of sitting down with the Governor or Utah to get pointers on how Utah has made itself a shining example of how to be business friendly.

As a result, Utah has one of the lowest unemployment rates in the US.

Sure seems to me that Concord is making the same mistakes that NY, California, New Jersey, Maryland and a host of others have have made for the last couple of decades that has resulted in big government and massive debt.

A perfect example is how Concord mandated that all health insurance must cover nonsense like stomach stapling and other fluff in their policies. The end result is higher health insurance costs for ALL of us in NH.

Concord has increasingly stood in the way of business and jobs and needs to take a couple of steps back and encourage business and growth not stifle it.

I would urge all of our "Reps" in Concord to ask themselves, is NH a State with a Government or a Government with a State.
- JP, Warner

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"The great turnpike robbery of 2009"
By CHARLES M. ARLINGHAUS, Op-Ed, The NH Union Leader, June 10, 2009

The transportation plan endorsed by the Senate budget writers and Gov. John Lynch is a radical scheme that ends the requirement to spend toll revenue maintaining toll roads. That requirement would be ended so tens of millions of dollars each year can be transferred out of the turnpike fund. It is the most cynical of public policies and the worst of the three options currently before policy makers.

For decades, New Hampshire's transportation revenue has been among the most safeguarded in the nation. One of the most important elements in that protection is the state's turnpike system and the turnpike fund.

The public is naturally quite cynical about tolls. Travel across the country and people will point at bridges and say "they told us that bridge would only have a toll until it was paid off, but of course we still have it."

New Hampshire built toll roads and faced the same cynicism, but we tackled it in a common-sense way. Tolls are not meant to be a clever way to tax you to fund general operations. We created a separate fund for the toll roads called the turnpike fund. Revenue from tolls can be spent only on the state's 93 miles of toll roads and their 159 bridges.

Because of our safeguards and transparency, the average citizen is less hostile to toll increases than to hikes in other taxes, especially the gas tax. Whatever they raise has to be spent on the road that has the toll booths. I know exactly where that money is going.

That acceptance of tolls is exactly what has put us at risk. Clever policy makers have realized that tolls can be used to raise more money for other purposes if they can find a way to pull the money out of the turnpike fund.

The primary tool to take tens of millions of dollars each year out of the turnpike system is something called "aggregation," and it's a bad idea. Today, your toll is restricted to use on the toll road. The governor and the Senate have proposed adding all the interstate highways and Route 101 into the turnpike system, but not putting toll booths on them. They plan to take the money collected on the 93 miles of toll roads and spread it over 314 miles of roads.

In the past, the people of Merrimack used to be able to take some solace in the idea that their dreaded toll booths were at least paying for the F. E. Everett Turnpike on which they drove every day. If the new scheme is adopted, they'll know that a portion of their tolls will be sent all over the state. The plan would raise all tolls and spend the extra money on non-toll roads.

In addition to this ridiculous toll divorce, we're buying a mile and a half of highway from ourselves so the turnpike fund can transfer $15 million a year of toll money in the general highway fund to spend anywhere in the state.

These two schemes have only one purpose: to get around the restriction on tolls and use toll dollars all over the state. The turnpike fund will exist only as a sad joke and a reminder of what fiscal integrity used to look like.

It's no wonder that Candace Bouchard, Democratic chairwoman of the House Public Works Committee, wrote that putting aggregation into the budget without a full discussion of the policy consequences would be "simply wrong." She was joined by all 18 members of the committee from both parties.

I don't want to minimize the long-term needs of the system. New Hampshire fixes more red-list bridges each year than it adds, but the current 10-year plan only deals with 87 of the 137 bridges currently on the red list. Both the current plan and the governor's plan have us on a 16-year repaving schedule, which may be too long.

A House-proposed plan would address all of the long-term issues and offer safeguards to taxpayers, but would raise the gas tax significantly. Whether that may become necessary in the future or not, it won't happen this year. In a surprisingly forceful statement for him, the governor has said he'll veto the budget if any gas tax increase is in it. He rightly thinks that adding to people's tax burden in the currently economy is a mistake.

If he believes a nickel gas tax increase is a bad idea in this economy, wouldn't the same be true for a 50-cent toll increase? (And what about the other half dozen tax increases he has not opposed?)

I think it would be sensible to follow the suggestion of Rep. Bouchard and the entire House Public Works Committee and spend the next two years discussing the state's real transportation needs and the policy implications of various proposals. However, we should be able to agree that the governor's plan to pillage the turnpike system can be the first thing killed in the budget conference.
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Charles M. Arlinghaus is president of the Josiah Bartlett Center for Public Policy, a free-market think tank in Concord.
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READERS' COMMENTS:

So Gary wants an income tax. The liberal answer to all problems, more taxes.

Why weren't you more upfront about it, Gary?
- Barton McLaine, Amherst

We brought on ourselves, since we got Lynch by allowing Benson to be governor.
- Barton McLaine, Amherst

Charles M. Arlinghaus' column provides us with some insight into the lack of sufficient revenue problem, but offers no solutions to solving the problem. That is true for the two comments thus far posted. History shows us that the lack of adequate funding is irrespective of party affiliation, too; however, most blame falls at the feet of conservatives who say there is never a good time to institute or raise a tax.
The most significant need whose solution has never seen the light of day is a drafting of a list of priorities. This is also true for the repair/maintenance of all of the state's infrastructure, as well as, the rest of the state's expenses. By first establishing priorities, maybe the red-list (drive fast and don't look back) bridges should be first on that list, we would all know how much money MUST be raised. Without essential priorities, diversion of funds is quite likely to occur. Maybe those diversions did occur when the conservatives of yesteryear prevented the prudent spending on infrastructure repairs.
Charles M. Arlinghaus' column also is suggesting that "ear-marks" are a good thing. I happen to agree with that idea as it ties the hands of politicians as to where the state's money may be spent. One line-item in the state budget totals to nearly $500,000,000 (half a BILLION $) and that is the contracting out of services to the private (for profit and greed) sector where there is very little over-sight and little transparency. This is the exact opposite of an "ear-mark" and just look at its size. Is reform needed, the answer is yes.
Is more money needed to provide for essentially important public services? The answer is yes. The issue is from what source? The answer is from those who use the service and that includes all residents and not just the property owners and renters. It should be from all who earn a living in NH.
- Gary L. Kerr, Chichester

The solution is so simple it's aggravating to read about these proposals. Tolls are a very inefficient way to collect taxes. Paying for workers, tollbooth construction, exorbitant EZ Pass managment fees and most significantly, increased gas wastage from accelerating out of the booth is all avoidable by using the existing gas tax. The collection happens at the pump and is taken equitably from all corners of the state. As a compromise, keep the Hampton tolls and add the high speed lanes (although I can't fathom why is will cost 20 million) which will maintain the out of state revenue stream. Let's be forward thinking for a change and move away from the centuries old way of tolling and rely instead on an equitable and easy way to collect the taxes. And finally, lets not forget that the DOT needs to scrutinize each contract for reasonableness and avoid over engineering the highway projects.
- Tim, Nashua

Once again, Charlie is right!
- Doug, Chichester

Fair warning: If aggregation goes through, residents of Merrimack will have grounds for a lawsuit against the state.
- Tim, Merrimack

Does the Governor and his moron Transportation Secretary think more people are going to use the toll roads when tolls increase to pay for other roads. Apparently so when you drive around and see so many easy passes on peoples windshields.

When are people going to say enough is enough and bring some change to Concord? When are Republicans going to stop voting for Lynch?
- Chris, Merrimack

Fools in - foolish legislation out. Is anyone surprised?
- Leo, Canterbury

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"The state has illegally taken private property, which is scary"
The NH Union Leader, Op-Ed, Thursday, July 9, 2009

The fight between the state government and a medical malpractice cooperative known as the Joint Underwriting Association (JUA) is more important than any tax hike or spending decision the Legislature has considered this year. It is a fundamental contest over whether the government can change the rules and seize private property when it wants or if the state is subject to the rule of law.

The budget as passed and signed takes $110 million from the JUA. The JUA is an agreement governed through a contract set up in administrative rules. The rules amount to bylaws for the organization and a contract for those purchasing insurance through the cooperative.

The state doesn't pay into the fund and doesn't share in the risk or reward. Instead, doctors and other providers pay a premium and the fund operates as a mutual insurance company, perhaps as your car insurance does.

Rules governing the premium stipulate that any loss or additional expenses will be made up by the membership. If the premiums are not enough to pay charges, "assessments to pay for any deficiency shall be levied as frequently as the board deems necessary." Taxpayers are not on the hook for anything because the entity functions as a private company.

There have not been deficiencies, so the fund has built up a large surplus. This happens with my car insurance as well. Each year, the insurance company sends each of us a check that totals our share of the amount by which premiums exceeded expenses. This isn't a windfall. It is part of the business arrangement I have with the insurance company. It's one of the benefits of mutual insurance.

The JUA cooperative operates in precisely the same way. The agreement contemplates a potential surplus and requires that it be disposed of in only two ways. The JUA board of directors must either apply it against future assessments or "distribute the excess to such health care providers covered by the association as is just and equitable."

There is no provision to do anything else. In fact, the notion that premiums will be adjusted through additional assessments or refunds of excess collections is an important part of any mutual insurance plan. I know when my premium is set that this safeguard is there. The company may set the rate cautiously, knowing that the excess will come back.

The state government wishes to take the accumulated excess, currently held in reserve, and commandeer it for the general use of government. Those who want to take the money make it seem so sensible because they don't mention the provision in the laws of the organization that require it be sent back to the providers who were overcharged.

Neither of the two public explanations for the attempted seizure of funds mentions the obvious sticking point. The Attorney General's Office wrote a nice memo in February outlining a rationale the governor could use in his budget address when he proposed this. It seemed sensible only because it left out the clear language of the agreement mandating a distribution to providers. That language changes everything and can't be easily explained away.

Similarly, the insurance commissioner has written this week (his column is printed on the opposite page) that the money belongs to all of us. He too neglects to mention what the rules clearly and unambiguously state. He calls it a "state-sponsored plan," but it isn't. The state spends no money and assumes no risk. There is no state sponsorship whatsoever. A provision of the law exempts the JUA from the premium tax, but no one has made any attempt to change that, nor is there anything stopping us from changing that exemption going forward. Nonprofit corporations such as the JUA are not "state-sponsored" simply because they have a different tax status.

He asserts that "the law does not give them the right to a windfall." On the contrary, the law clearly gives them and only them the right to excess premiums, just as my insurance policy gives me the same right.

The commissioner rises to grandiose heights of populism when he proclaims "the people of New Hampshire established the JUA, and they deserve to benefit from it." It sounds nice, but that's not actually the case. We didn't do anything. We didn't put up any money. We didn't assume any risk. There is no definition of the word "deserve" that applies to us.

Prior to this year's budget mess, no one in any part of state government ever thought the state had the authority to seize this money. It was considered someone else's property. It still should be.
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Charles M. Arlinghaus is president of the Josiah Bartlett Center for Public Policy, a free-market think tank in Concord.
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READERS' COMMENTS:

It is hard to believe more people of either party with rational minds do not find such a move disturbing. People really need to start thinking in terms of our freedoms and liberties rather than party lines. Divide and conquer people and we are divided now by party, race, and gender and the only ones profiting are those in power who play us like a fiddle.

Remember the founding fathers wrote “We the People”. Not you the democrat or republican, you the man or woman, you from that country or this country or you the rich person or poor person. We were granted the freedom to take from life what we were willing to work for and achieve. Some do this more than others and such is the history of mankind. But until now no nation has ever created more middle class or wealthy than America did. But it seems as if we are heading in a new direction these days. A direction of change as promised.
- Deb, Derry

If the state could get their sticky fingers on the Abandoned Property they would steal that too!
- Jack Alex, Manchester

To Robert Deerfield,
Instead of trying to cloud the issue with all your protestations about AIG, Enron, or Goldman Sachs, let’s try focusing on just the facts. I agree those companies you mentioned are companies we taxpayers have had to bail out, and you are justified in your outrage, hell I share it! But those are totally separate issues and have nothing to do with the JUA which is non entity. It is neither a company nor corporation; it is nothing more than a fund which merely operates similar to the way a mutual insurance company would. There are no stocks sold or traded, no stock holders are being paid dividends, “unlike the companies you mentioned” and taxpayer money is never used. All money paid into that fund has always been paid solely by hospitals, doctors, nurses and nursing homes under an agreement and rules that mandate any excesses in premiums paid would be returned to JUA members not the state. In other words the fund is “privately funded” i.e. taxpayers contributed nothing and risked absolutely nothing. The JUA rules clearly stipulate that members must make up any loss. By confiscating JUA’s money the state is unfairly singling out only those who paid into that fund in shouldering the burden of bailing the state out! If that were to be allowed and JUA members were ever to need that money to cover an unexpected loss, then they would be at a further disadvantage because under their own rules they would have no choice but to pay those losses out of their own pockets again because the state took their money! So why are you frothing at the mouth to make those who have paid into the fund have to pay for the irresponsible spending practices of the governor and his liberal bunch?
- Rob, Manchester

Robert, you should stick your head in the paper more often.... this has been an issue since it was drafted in February, and the JUA waited until the Gov signed on the line to steal it, to bring it to court.

The Judge in Laconia ruled against it, and continues to do so.

A sensible judge, not a Lynch appointee.

This Gov and this legislature are thieves, plain and simple. I'm waiting for someone to figure out how to have them charged with conspiracy to commit a crime. They have certainly conspired to take $110 million from the JUA, under Kelly Ayotte's OK.

Stay informed!!!!
- Kevin, Keene

Robert little history lesson for you. The people who said there is npothing wrong with Fannie and Freddie was none other then Barney Frank and the Congressional Black Caucus. Ironically it was the Republicans who were demanding that the two entities were reigned in.
- Brian, Wakefield

Robert, Deerfield

I've seen your posts here before. In my opinion there is a 'good government' guy trying to get out, but sometimes your posts read like you are a liberal partisan.

I agree with you that something needs to be done about the corporate creeps that have imperiled our economy and impoverished many. Especially in the financial industry (including Fannie Mae & Freddie Mac) CEOs & CFO 'wizards' who bankrupted their companies; impoverishing thousands of employees & investors. Wizards--who then 'golden-parachuted' away with hundreds of millions of dollars of corporate assets.

But I don't believe the solution is to over-regulate the economy or to tax ourselves back to the stone age.

How about enforcing the laws on securities fraud & throw some crooks in jail for a few decades of hard time?

Check out this link:

http://zerohedge.blogspot.com/2009/06/goldman-sachs-engineering-every-major.html

Let me just add that the issue of enforcing securities fraud statutes is not a partisan issue--there is plenty of blame to go around.

As far as culpability goes, during the late 90s under the Clinton administration we had a thriving economy--but also a lot of crooks operating with impunity, who were not brought to justice until the Bush administration:

Enron bankrupt 2001 / Kenneth Lay and Jeffrey Skilling tried & convicted May 2006

MCI / Bernie Ebbers / tried & convicted March 2005

Tyco / Dennis Kozlowski / tried & convicted 2004-5

Adelphia / John & Tim Rigas / tried & convicted July 2004

The current bailout of the financial industry has been a bi-partisan effort--to screw investors & soak the taxpayers. Enough!!
- Paul, Sunapee

Lynch was a conservative democrat when we elected him. But working with Rep Norielli and Sen Larsen and working for Pres Obama has turned him into a socialist facist. Next he'll be taking over corporations and firing CEO's.
- Jim, Manchester

Robert - it is before a judge right now.

After it is deemed illegal, please post your apology here.
- Art, Portsmouth

Could you please point out which court has deemed this illegal? Otherwise all I hear is blah blah blah.

Another great headline with no basis in fact.
- Robert, Dover, NH

Wonder why health care is unaffordable, its Dems like Lynch. WE are going to pay for this in increased health care cost. The wonderful Dems who keep saying healthcare costs are out of control are the CAUSE! Now they want us on a Goverment controled system that has FAILED everywhere its been tryed! These BUFOONS bankrupted medicare, social security, and everything they touch is a $$$$$ failure.

All SOCIALIZED healthcare amounts to is MORE MONEY for the DEMOCRAT politicians to tax and spend!
- Nick L, Deering

The real losers here are the patients in NH, because the Doctors that paid too much for premiums all along we probably lost some good docs that could have stayed in business if they had been correct and lower.

Bottom Line: How many doctors did the State loose because there were errors being made in calculating the premiums for the malpractice insurance?

Now that the horses are out of the barn, why not just reduce the rates to some nominal value, let the pool deflate and encourage new doctors to enter practice in New Hampshire.

Better yet, just issue refunds to the insured for the "over payments" in premiums. When the State comes knocking there will be nothing left in the fund.

How about some real investigative reporting?? Who screwed up the calculations?? Which state employee or appointed hack made these mistakes over MANY years. Why did someone not ask the legislature to reduce the pools or adjust premiums to match payout needs?
- Bob, Francestown

Welcome to the land of Souter.
- WS, Manchester

Right, tax payers are not on the hook for anything unless.........AIG is involved, or Enron, or Goldman Sachs, or, or, or. I get so tired of having these legal pronouncements from people who publicly proclaim that there is no housing bubble and turn out to benefit from the result of government inaction. There will be a legal announcement about the result of this suit in due course and all this phony baloney attempt to influence the result of court hearings is typical of those think tank ax grinders, who are paid to think by those who make tanks. It is just more of the NO NO NO crowd. Free from ideas on how to fix the economic disaster caused by their greed and outright theft, they attempt to thwart any effort to get the state over the difficulties they caused and deflect attention from their culpability.
- Robert, Deerfield

We need to get rid of this attorney general and this insurance commissioner who both are unelected bureaucrats who live of the sweat and tears of New Hampshire taxpayers since all they want to do is expand the state bureaucracy even if they try to take private property illegally. John Lyncj get rid of them both.
- Jim McMahon, Newport

The State takes children away from their families illegally. Now they take peoples property illegally. What will they take next?
- Dot, Nashua

If it is this cut and dry I am sure they will lose in court.
- Steve B, Derry

It would seem to be a pattern, this seizing of private assets for what liberals think is the "greater good". After all the throwing out of 200 years of bankruptcy law and reordering the priorities of stakeholders in the GM and Chrysler bankruptcies to benefit labor unions over bondholders was in the same pattern. How much longer will people,especially in Live Free or Die NH put up with this redistribution of wealth movement!
- John Linville, Wolfeboro

You could see this coming when NH's own Justice Souter allowed CT to throw home owners off their property and give it to Pfizer. In the new order, there is no private property. The state owns everything and will do what they wish with it. Ask GM bond holders about rights. Ask any 'Latina' judge about justice and law. You ain't seen nothing yet!
- Leo, Canterbury

This points out the very nature of government:

"We need more money."
"Oooh, there's a big pile of it!"
"Great, we'll just take it!"
"Hey, wait, that's our money!"
"Sorry, we need it more than you do. And we have guns."
- Kevin, Lancaster

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"Keeping an eye on the new budget"
By CHARLES M. ARLINGHAUS, The NH Union Leader, Op-Ed, July 29, 2009

Less than a month after the state's two-year budget was signed and theoretically balanced, there is a growing concern in Concord that the budget seems to be unraveling.

About 43 percent of the state's two-year, $11.5 billion budget is the operating budget supported by the general tax and fee revenues of the state, as opposed to federal grants and dedicated funds. This spending is paid for with the state's regular revenue sources -- business taxes, tobacco taxes, liquor revenue, etc.

For the two years that began July 1, we're planning on spending $4.95 billion in the operating budget. However, regular state revenue falls about $400 million short of that, so we're replacing it with a series of one-time revenue sources. Most of the one-time sources are special programs the feds included in their so-called stimulus bill.

One source generating concern in Concord is $110 million the state wants to take from a medical malpractice fund called the Joint Underwriting Association. This is the subject of a lawsuit, and I've written about it frequently. We'll know this week, but a growing number of people inside government believe the state will lose this case. That will create a $110 million hole in the budget.

Regardless of the outcome, the case will be appealed and we won't have a definitive answer for a few months. The difficulty is that much of this money is actually used to fix the ending deficit from the last budget. If the state loses this week, that money won't be available and the state will have to find some other money or end the previous fiscal year with a hole in the budget.

The $110 million in question is a lot of money, but to put it in context it's about 2.5 percent of the money the budget estimates our current taxes and fees will raise in unrestricted revenue. Therein lies the second possible concern in the current operating budget.

Our loose balanced-budget law requires that budgeted spending be balanced by an estimate of the revenues expected. In areas such as caseloads for Medicaid, the spending is an estimate. But for the most part, it is a fairly accurate limit that administrators are not permitted to exceed. The revenue side is more nebulous.

We have a history of exceeding our revenue estimates. For a long time, we were particularly cautious in our estimates and always raised a bit more than budgeted. Having a cushion is good budget practice. It gives us a greater certainty that the money really will be there and allows a potential cushion against pressing needs that arise.

Two years ago, optimistic revenue estimates caused budget problems mid-year when revenues came in at lower levels. A deep recession compounded the error, and we ended up with almost $400 million less than we had planned for over two years.

Uncertainty about the economy had everyone thinking about making cautious estimates. However, during the last days of conference committee negotiations, legislators needed more money or less spending to balance the new budget. Coincidentally, but fortuitously, the governor's new revenue commissioner came forward with new estimates that were $75 million higher than the ones from a few weeks before. Problem solved.

It would be fair to describe the new estimates as reasonable, but on the optimistic side. A more cautious approach would have used the lower estimates of three weeks before. In addition to the new optimism, the budget created new tax revenues that have to be estimated without any history or good data. For example, we don't know how many people camp, so the new campground tax revenue is a guess. The new tax on limited liability corporations is still being written, so it's even harder to predict.

By the end of the week, we'll have one vague snapshot of revenues. July's revenues are only about half the level of an average month during the budget year. If they are a few percentage points higher or lower than estimates, it won't be definitive, but we'll know if the estimates are in the ballpark. At the end of September, we'll have a full quarter of data and a much better idea of where we stand.

Our law requires only that the budget as passed come to an estimated balance two years from now. Once passed, the requirement ends, no matter what happens. The problem is that the longer we wait to act, the more painful the fix would be. Cutting $110 million to $150 million of spending over 22 months is easier than doing it over 14 months. Administrators shouldn't count on the final budget number being final. There's no need to panic, but we should proceed with caution.
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Charles M. Arlinghaus is president of the Josiah Bartlett Center for Public Policy, a free-market think tank in Concord, New Hampshire.
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July 29, 2009

Re: NH's budget problems are in a wider context than Mr Arlinghaus' myopic analyses

Charlie, you mentioned in past columns that Governor Lynch is debt financing the state budget's operational costs with tens if not hundreds of millions of dollars, which is like using one's credit card to pay one's mortgage and other overhead household costs. How bad is NH's debt load compared to the other 49 US state governments'? I have read that California & New York State are in financial crises, too, this year. I believe your analyses of NH state government budgeting is honest, but I also think you are myopic because many states have the same fiscal budgeting problems as we do. The Federal Government spends, spends, and spends some more, while the state & local governments are starving for revenues. While your focus is very honest, it is also very narrow!

- Jonathan Melle

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"Why Obama spoke in NH and not next door"
Op-Ed By Charles Arlinghaus, New Hampshire Union Leader, August 12, 2009

Apparently people in Washington think we pay no attention to what happens in our neighboring states. The President decided to speak on government health care plans in New Hampshire because each of the neighboring states has had a failed experiment with exactly the kind of changes Washington wants to bring to all of us.

None of the rhetoric in the President's speech was new to New Englanders. All of it is eerily reminiscent of the hopes and dreams of Dirigo Choice in Maine and Commonwealth Care in Massachusetts. Both of those plans went into effect, and neither has proved effective, which makes it odd that Congress and the President wish to develop a plan by copying the broad outlines of the "Massachusetts model."

Dirigo Choice was our region's first foray into having the government save money by spending money. The law was passed six years ago, about a month after it was introduced. Despite the short period of study, supporters were confident Maine's bold new experiment would prove a model of reform for states around the country. Maine's state slogan, "Dirigo," means "I lead." They hoped that as Maine went, so would go the country.

Dirigo's promise was great. It would eliminate the uninsured with no taxes at all. The plan would be paid for by savings in uncompensated care and end up reducing insurance costs for everyone. The plan included a significant Medicaid expansion and a subsidized government or "public option."

Six years later, it turns out that what sounded too good to be true was too good to be true.

Dirigo hoped to sign up 30,000 uninsured residents in year one and all 140,000 estimated uninsured residents by 2009. How did it do? In 2009, the Dirigo plan -- which promised to lead the nation and serve as a model for all -- covered about 3,500 previously uninsured people, or about 3 percent of its goal.

As for having no cost, the Dirigo plan has cost Maine taxpayers $150 million. Despite the taxpayer subsidy, premiums have been increasing and benefits dropping. Dirigo premiums climbed 74 percent during a period when state employee premium costs climbed only 17 percent. Skyrocketing costs have also required significant benefit reductions in the public plan. Hospital costs, for example, are now reimbursed at 70 percent, not 80 percent.

No wonder long-time Dirigo chronicler Tarren Bragdon called his look back at Dirigo "A Series of Unfortunate Events."

Just as unfortunate was the recent Massachusetts effort that is serving as a template for most of what Congress and the President want to do. Massachusetts added individual and employer mandates -- every business with at least 10 employees had to offer insurance to employees, and every resident of the state not otherwise covered had to buy insurance. There were subsidies for families earning as much as $66,000.

Lawmakers assumed that if everyone had insurance, premiums would decline on average. More important, they assumed that emergency room usage would decline significantly and the state would save millions on uncompensated care. Then-governor Mitt Romney predicted premium decreases of 25 percent or more.

But politics will always intervene. Rather than offering middle income people and young professionals a simple catastrophic plan, more and more mandates were added. As a result, premiums have increased, costs are out of control, and many are still uninsured despite a mandate to be insured.

Rather than declining, insurance premiums in Massachusetts are rising much faster than the national average. The cost of family coverage is about 30 percent higher in Massachusetts than the national average. In addition, the waiting time to see a doctor has increased from 33 days to 52 days.

Commonwealth Care, the subsidized insurance part of reform, will cost almost $900 million, about 20 percent higher than projected. To make up for the shortfall, the state ordered subsidized insurers to cut payments to service providers and is considering capping insurance premiums, excluding some residents from eligibility, and limiting coverage to "services that produce the highest value when considering both clinical effectiveness and cost." In other words, rationing.

Despite the costs and the subsidies, 3 to 6 percent of the population -- depending on the measurement used -- are still uninsured. Rather than creating an affordable option, state mandates made unaffordable premiums less affordable.

Dirigo Choice and Commonwealth Care were both noble experiments that adopted one approach to try and expand care and control costs. However, they failed. If states really are laboratories of democracy, as we often say, we should look carefully at the results of these experiments. They failed. It would be a shame to recreate them on a national scale.
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Charles M. Arlinghaus is president of the Josiah Bartlett Center for Public Policy, a free-market think tank in Concord.
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8/12/2009

From my understanding, the Federal Government provided funding for the state governments to reinvent their respective administered Medicaid programs, which Maine and then Massachusetts opted to participate in, while New Hampshire did not. The real problem with Maine & Massachusetts' respective healthcare reform programs is that the Federal Government financed the initiative, and is now underfunding Medicaid, nevermind subsidized healthcare insurance. The state governments depend mostly on the federal government's financing for their healthcare reform programs to work, but now are cutting healthcare insurance benefits because they (the states) are not able to pay for the rising or high costs of healthcare services. That is why President Obama is proposing transitioning healthcare reform from the state to the federal level -- so the federal government will be able to finance its own healthcare insurance reform program that is not working on the state level. New Hampshire has cut many millions of dollars from Medicaid funds and needs the federal government's assistance if the state is to adequately insure its one million-plus population, especially the young, elderly, disabled and people who are suffering from physical and mental illness. NH has a broken healthcare insurance system and needs the assistance of the federal government to fix it!

- Jonathan Melle
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Charles M. Arlinghaus: "City's revenue sharing loss was inevitable"
By CHARLES M. ARLINGHAUS, Op-Ed, The NH Union Leader, November 11, 2009

The state's decision to freeze revenue sharing payments was not a criminal act. It doesn't constitute fraud. It isn't unconstitutional. It shouldn't send your town into turmoil, and it's not even a bad idea. It may have a negative impact on the Verizon Wireless Arena, but every change in state law shouldn't lead to a lawsuit.

Manchester's bond payments on the arena are guaranteed by the city's portion of the state meals and rooms tax revenue. Neither the state nor the city is on the hook for anything other than the city's share of that payment, about $4.6 million last year.

It is a risky setup for bondholders because the state meals and rooms payments are not guaranteed and have gone up and down in their short history.

The meals and rooms tax was passed in 1967 to provide additional revenue for the state, but also for the towns. The state tinkered with the share going to towns and eventually took it all. Starting in 1995, state lawmakers decided to bring back some degree of revenue sharing.

They created a formula that started small, but dedicated most of the annual rise in revenue toward increasing the share sent to the towns. In theory, the town share of the total revenue would increase until municipalities were finally receiving 40 percent of the total. Right now, they are up to about 25 percent.

In the last budget, the governor originally proposed suspending revenue sharing entirely for two years. In the end, the Legislature proposed freezing it at 2009 levels for two years.

The state canceled the other major municipal revenue sharing program anyway, and lawmakers were convinced they couldn't cut too much more without burdening towns. Manchester Mayor Frank Guinta at the time fought to restore some of the funding for fear of defaulting on the arena's bond payments.

Any revenue sharing program goes up and goes down. This program has a history over 42 years of rising, sometimes declining, sometimes disappearing entirely. Strangely, bondholders were willing to invest in a proposition secured by such an unreliable source.

If the state behaved as it had in the past, payments would go down. If it behaved as most states do in difficult economic times, payments would go down. If the state ever passed a tax cut (less likely), payments would go down.

The city's bond counsel warned the state that changes to state law might cause a lawsuit. He cited a Washington case to suggest the state can't repeal a tax the city used to pay bonds. But while a state might be obligated if it used a tax to secure a bond, it is just not reasonable to think that state action can be vetoed because of what one city decided to do with its aid payment.

Just as important, there's no reason for anyone to be surprised by this action. The governor's spokesman told the Josiah Bartlett Center when we broke the story on Monday that "Moody's raised this as a risky funding scheme when this was put together, pointing out that meals and rooms revenues are not guaranteed to be constant." There's some fear that bondholders might sue, but they knew the risks at the time and don't have much cause for surprise.

The bond counsel's proposed solution is even sillier than a lawsuit. He suggests that the old version of the law be grandfathered for any city that used the payment to secure bonds. In other words, Manchester would be rewarded for taking a risky decision, while the rest of the state would operate under a different law. Payments to your town would be frozen, but not payments to Manchester.

To be fair, paying for the arena is going to be difficult for Manchester, but every city and town in the state faced similar struggles and similar budget uncertainty. Many towns noticed the financial difficulties the state was having. I think I even wrote about it once or twice.

My own town of Canterbury is a good example of the common sense of citizen selectmen. Canterbury is not particularly frugal, just average. Our taxes have gone up by an average 5 percent each year for the last 15 years. But selectmen knew that state aid was going to be cut, so they didn't count on getting it. Instead, they cut the town budget by 6 percent, and the school budget declined as well. The end result was that our property taxes went down by 8 percent, which was needed relief to people fighting a recession.

The recession has been tough on every budget. It was expected that the state would freeze aid. The right approach is the one fiscally responsible towns have taken. Long-term obligations put pressure on the rest of your budget, but it doesn't have to stop you from cutting taxes even when state aid is frozen.
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Charles M. Arlinghaus is president of the Josiah Bartlett Center for Public Policy, a free-market think tank in Concord.
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READERS' COMMENTS:

Steve, from Manchester, you are dead on in your comment. The reality is that the arena has dramatically increased property values downtown and the resulting increase in tax base should pay for the arena, even if the City didn't get a nickel from the rooms and meals tax.

What we have here is two leaders (Lynch and Guinta) who don't like to make touch choices and are trying to blame each other for the fact that they can't make budget cuts. They ought to grow up.

I don't feel bad for the bondholders, they should have known the risks involved. I don't feel bad for the city, they should have known that there was nothing binding the state to keep paying the taxes back to the towns.

Of course, if the state could have made cuts instead of shorting towns, none of this would be an issue. However, with this Governor and legislature, that's not a real option.
- Glen, Manchester, NH

Indeed, anyone who bought bonds, secured by a promise of increasing subsidies from the state, has only himself to blame.

But revenue-sharing itself is questionable. Local expenditures should be raised by the local government, and the political heat they have to take will limit their eagerness to spend. Otherwise, we have city pols building ballparks and arenas and claiming they are "paid for" by revenues raised by a completely independent level of government ("free money").

And again, Steve of Manchester, if tax-and-spend has such miraculous ability to lead to follow-on spending and economic growth--superior to what I would have done by keeping my own money--wouldn't we be better off if the government simply took it all?
- Spike, Brentwood NH

The Manchester Civic Arena (currently known as the "Verizon Wireless Arena") project was, as I understand it, originally supposed to pay for itself (in part) out of increased rooms and meals tax revenues, some of which would go to the City of Manchester. The City is currently still paying for the arena, but not (directly) getting any rooms and meals revenues.

The City still gets other money: e.g., tenants pay plenty to rent the facility, including the food vendors. There never was any guarantee that the revenue sharing would continue forever, although i personally think it was a good program which should be continued. I am not so sure if building the Arena at the taxpayers' expense was a great idea, but it ws built and it does exist and it is a good facility which should pay for itself eventually with or without revenue sharing.

One extenuating circumstance is that the City of Manchester represents about 8% of the state's population and economy. So effectively about 8% of the state's share of the rooms and meals tax ends up being recycled into Manchester's local economy.
- Timothy Horrigan, Durham, NH

I alway say balance the budget and no pork spending.
Remember donot ask what your state can do for you but what you can do for your state.
- mo, plymouth

Thank you for laying it out so clearly. I was wondering about the revenue sharing with the towns. This helps clear up some of my questions.
- Cathleen, Center Barnstead

Patrick, Rollingsford: Welcome to the club - many of us in Manchester have been questioning Mr. Guinta's logic for years now.
- Kathy, Manchester

So, I guess I missed the part where it says that Verizon Center has to pay it's own way. they have events all the time, so where does THEIR money go? Are you suggesting that they don't contribute to the debt payments, the entire amounts is being carried by the State portion of the M & R tax?

Wow, sounds like an Obama deal to me. Build a venture and look to the State to cover the cost of it.

If the property can't maintain it's own expenses and debt service, then it should do what all failing business do.....
- C young, Andover

The not-so-subtle message here is that it was fiscally irresponsible for the Verizon to be built. Anyone who remembers the "pre-Verizon" Elm Street knows that the arena spurred unprecedented economic growth in the city. It is the catalyst that transformed Manchester's downtown. Growth requires risk. It's easy for a nay-sayer to sit with hindsight, analogizing to the sprawling metropolis of Canterbury, and imply that retrenchment should be first on the agenda of every politician. But real leadership requires the willingness to take a chance. This economic downturn too will pass. And when it does, Manchester will remain grateful for the Verizon.
- Steve, Manchester

A great article, I am very impressed. While my sympathies go to any town or city in these tough times, they still have an obligation to pick up the slack when needed.

Lets not forget that Mayor Guinta is campaigning for Congress, which is why his vocal concerns about this subject with the state have made me question his logic.
- Patrick, Rollinsford

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Charles M. Arlinghaus: "Small changes can make health insurance much better"
By CHARLES M. ARLINGHAUS, The NH Union Leader (Online), November 25, 2009

Successful health care reform doesn't need to start with 2,000 pages of new federal bureaucracies and rules. There are common-sense changes that can improve health and access without new offices, commissioners, rules and federal preemptions. Many changes will be attractive to policy-makers whether they support greater federal involvement or not.

Opponents of large federal bureaucracies taking over health care (and that would include me) are often accused of not wanting to change anything. It's a convenient attack, but it isn't true. People on both the left and right want to make changes to the health care and health insurance systems in this country. Opposing a massive new set of regulations, or supporting them, shouldn't stop us from moving forward on less intrusive reforms.

There are changes that need to be made at the federal level and others at the state level, but they all fall under the category of allowing more choices and more competition.

The easiest reform that could be supported by liberals and conservatives alike is to allow health insurance to be sold across state lines. Under current law, state regulators have a monopoly on health insurance in their state. The mandated parts of coverage, the limits and other rules are set and insurance policies follow that one form.

Insurance might be cheaper in another state because it had fewer mandates, each of which adds to the cost of insurance. Yet, I can't decide that I'm willing to forego coverage for something like stomach surgery or minimum deductible levels.

Still, there is nothing stopping a state from opening its borders to greater competition. In New Hampshire, state Sen. Jeb Bradley has introduced a bill to allow the purchase of insurance policies regulated by someone else. I could buy insurance regulated by Pennsylvania if I thought it fit my needs better. This is not revolutionary, but it is a start toward allowing greater competition and more choices. Economic research has established that more choices are associated with lower insurance premiums.

In New Hampshire, as in most states, basic catastrophic coverage is not allowed. Regardless of deductibles or co-pays, there are dozens of mandates that any policy must cover. I cannot choose a simple stop-loss policy that lets me pay out-of-pocket for routine care, but insures me for costs over a certain amount. An open border law would allow me to choose a policy in a state where the regulation allows different coverage.

Today, large businesses are not subject to state regulation. A large business may be in many states and is exempt from state regulation. That and greater purchasing power result in large groups having rates than are about 20 percent lower than the rates charged to small businesses. One way to help small business would be to allow companies or individuals to band together and form larger purchasing pools. Changes in federal law would make offering health insurance more affordable to many small businesses.

Improving access to health care is also important. Across the country, retail health care clinics are opening up in locations such as Target and CVS. These clinics provide basic health services at a fraction of the current cost. Minnesota Blue Cross found that retail clinics cost only half the price of a physician visit. Obviously, retail clinics aren't suitable for everything, but for some basic services they reduce pressure on the limited number of primary care doctors we have, increase access in underserved populations and offer a convenient alternative.

Many states have regulations that prevent retail clinics from opening. We should adjust any regulations that restrict these clinics.

One of the benefits of retail clinics is that their prices are all conveniently posted. Patients know going in exactly how much a flu shot will cost, for example. This sort of transparency would be helpful in other areas of health care. Florida, for instance, has a Web site that lists the price of every prescription at every pharmacy in the state.

None of these changes is radical, and none will fix everything wrong in health care. Yet each is a sensible improvement, regardless of how you feel about national health care efforts.
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Charles M. Arlinghaus is president of the Josiah Bartlett Center for Public Policy, a free-market think tank in Concord.
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READERS' COMMENTS:

This "free market" fantasy has never been more than a myth.
Unfettered competition, more ruthless than efficient, has from its beginnings rarely been interested in self-regulation or social justice. Deductibles, co-pays, caps, and pre-existing conditions would continue to be an actuarial fraud.
If the Arlinghaus solution is to have insurance companies perform as well as credit card companies, we can expect the equivalent of 30% interest. Unregulated selling across state lines will provide more exploitation: operating from states with weak laws to undermine safeguards in other states.
- David, Manchester, NH

Probably not a small change, but if we could just get Republicanics and Libertarians out of the way, the rest of us could move forward toward longer life expectancies and lower infant mortality and 100% coverage. Obstructing the Senate with 140 threatened filibusters is not a way to influence legislation except if you are against all government. That is the plan, don't you know. Republicanics are for limited government - limited to just Republicanics.
- Robert, Deerfield

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"Charles M. Arlinghaus: An unbiased look at the state's current finances"
By CHARLES M. ARLINGHAUS, Op-Ed, The NH Union Leader, December 23, 2009

A few times a year, the state opens the doors to all its cupboards and lays itself bare to the financial world. A peek inside those cupboards reveals much about our financial state with a bare minimum of disguising political varnish.

New Hampshire, like every other state in the country, borrows money a few times each year. Rather than applying to the bank for a mortgage, we offer bonds for purchase. The bond purchaser loans us money and then receives his or her loan back, bit by bit, with interest.

To assure the bondholder that we are a good financial risk and that he ought to invest, the state publishes a fairly comprehensive description of the current state of its finances in a bond statement. Because this is the equivalent of a loan application, it tends to be factual with almost no political commentary. The bond purchaser doesn't care how noble you may be. He just wants to know how much is in savings, what you owe, if there are outstanding lawsuits, etc. In other words, is this loan a good risk?

One of the first things we discover from the statement is that the cupboard isn't quite bare. The state did run a $93 million "operating deficit" in the year ending June 30, but we have money in the bank. The budget is nominally balanced with $65 million of the medical malpractice money a court has already ruled the government can't take. However, even if the court ruling stands (as it likely will), the state has $76 million in its "rainy day fund" it can tap.

I should note that Grant Bosse did a series for the Josiah Bartlett Center establishing that New Hampshire has no unusual cash flow difficulties and unlike California or the City of Detroit is in no danger of bankruptcy or a cash crunch, regardless of what happens to the malpractice money.

There's also more semi-good news. The state's retirement shortfall is a little less horrific than a few months ago. I've written before about the state's $7 billion debt mountain. We have significant unfunded liabilities in our pension system, in post-employment health benefits, and in another benefit category called OPEB. As of the last valuation, those unfunded liabilities had declined to $6.5 billion. Given the rise in asset values since the end of the fiscal year, our combined shortfall has declined further to a mere $6 billion. Consider us downgraded from a nightmare to just a really scary dream.

Our financial presentation to potential bond purchasers also included one of the best big-picture descriptions of the effect of stimulus money on the state budget.

The stimulus money can be divided into two types. The first amounts to the equivalent of a state government bailout -- we can use it to offset our state programs. New Hampshire has or will receive a total of $378 million that we can use to supplement tax revenue in three ways: An increased Medicaid match pays for $177.4 million to balance last year's budget and the current budget; another $164 million will go to the education trust fund and the community colleges and university system as general revenue; the final $36 million of this pool is to be used for whatever we want.

The other 60 percent of the almost $1 billion in stimulus money is dedicated to "specific program purposes that are being administered through state agencies." In other words, the federal government is spending $584 million on things it has decided are important and is having eight state departments administer the programs.

The biggest single chunk is $235.8 million administered by the state Department of Transportation. This is the "shovels-ready" stimulus spending that was used to sell the program even though it now accounts for only 25 percent of the package.

New Hampshire has actually handled the transportation spending well. We didn't add $235 million to a 10-year plan that already spent more than we will raise. Instead, we selected projects on our own 10-year plan that met Washington's guidelines, but that we probably couldn't afford.

Some reports in the press have suggested an audit of the fiscal year that ended June 30 is late because of highway fund issues. In addition, we're telling potential investors that an audit will not happen until the Supreme Court rules on the medical malpractice fund taking. The audit will come 30 days after that ruling, not before.

A transparent financial picture is mandatory to sell bonds, but we're all investors in state government whether voluntarily or involuntarily.
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Charles M. Arlinghaus is president of the Josiah Bartlett Center for Public Policy, a free-market think tank in Concord.
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READERS' COMMENTS:

Charles,

Finally, someone has clearly and concisely reported on the current status of NH state finances. Using NH's bonding prospectus as a basis for your article is ingenious in it's own right for it's transparency. This transparency, which residents and taxpayers in NH have been clamouring for, has been sorely lacking from Govenor Lynch and our democratic controlled house. NH residents should demand more transparency from their elected representatives and not accept the "party line".

Thank you for writing this article.
- Pat Putnam, Harrisville

From the Josiah Bartlett Cntr website: "The Josiah Bartlett Center for Public Policy is a non-profit, non-partisan, independent think tank focused on state and local public policy issues that affect the quality of life for New Hampshire's citizens. The Center has as its core beliefs individual freedom and responsibility, limited and accountable government, and an appreciation of the role of the free enterprise system. The Center seeks to promote policy that supports these beliefs by providing information, research, and analysis." Un-biased? Non-partisan?? I hardly think so. The promotion of public policy which favors "individual freedom and responsibility" and "the role of free enterprise" over the interest of the common good, is staunchly grounded in Republican ideals and philosophy.
- Pjtank, Northwood

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