Republican Review | Volume 4 Issue 30 | June 29, 2019


MESSAGE FROM THE REPUBLICAN LEADER

House Republicans & Friends Across New Hampshire,

I'm pleased to say House Republicans stood united in opposing House Democrats unsustainable, fiscally irresponsible budget yesterday on the House floor. Governor Sununu has vetoed this terrible proposal already, and I look forward to taking an active role this summer in forming a budget that doesn't dig us into a fiscal hole or raise taxes. 

Now that the summer has started, I hope you all use this break from legislative business to spend time with your family and friends. There will be no legislative business conducted from July 1st through August 16th, with the exception of statutory committees or special circumstances that may arise and authorization from the Speaker is granted. 

State offices will be closed on Thursday, July 4th in observance of Independence Day. 

Make it a great weekend!

All the best, 

Dick Hinch, House Republican Leader


Click here to view the latest House Calendar


Morse, Hinch Oppose Unsustainable Budget

Concord, NH – Thursday, the New Hampshire Senate and House of Representatives passed the committee of conference report for the biennial state budget. Senate Republican Leader Chuck Morse (R-Salem) and House Republican Leader Dick Hinch (R-Merrimack) issued the following statements:
 
“The budget passed today by Concord Democrats is nothing short of a half-baked plan that will only lead to an income and capital gains tax in the future,” said Senate Republican Leader Chuck Morse (R-Salem). “The ill-conceived education funding formula was presented to the committee of conference without any vetting and will be unsustainable in the future. The formula will resurrect donor towns, that we already know is a failed system, and increase the statewide property tax.”

“Senate Democrats will need their long sought-after income tax, capital gains tax and litany of other taxes to pay for their thoughtless education funding formula, a proposition I could never support. Education funding is a problem, but the Republican proposal to restore stabilization grants is a more effective starting point,” Morse added.

“Democrats have made the decision to raise taxes and jeopardize our economic success in order to grow government and increase spending at record levels,” said House Republican Leader Dick Hinch (R-Merrimack). “Republicans stood united today against this unbalanced, deficit-ridden spend-a-thon to demonstrate we have the governor’s back when he vetoes this budget.”

“Democrats have already shown this year that they are willing and able to pass an income tax or capital gains tax. Even if those aren’t in this document, they’ve laid the groundwork for it through this fiscal irresponsibility. If you like the idea of an income tax, you’ll love this budget. This budget is unbalanced and built on inflated revenues that will lead us into structural deficits in the short term. It spends one-time revenue on the growth of government, which will hurt us now and in future budgets. It’s time for Democrats to wake up and put forward a budget that does not set us up to fail.”

Republican Leader Reacts to Governor’s Veto of Budget

Concord, NH - House Republican Leader Dick Hinch (R-Merrimack) released the following statement in response to the Governor’s veto of HB1 and HB2.

“Republicans in the House stood united against the Democrats’ fiscally irresponsible deficit-ridden spend-a-thon budget, and we fully support the Governor’s decision to veto HB1 and HB2. This budget raises taxes on our citizens, jeopardizes our economic success, and puts us at a real risk for an income tax or capital gains tax in order to dig ourselves out of an impending structural deficit.” 

“We must ensure the end product is something that is fiscally responsible, uses realistic revenue estimates, and most importantly, is balanced. I look forward to taking a very active role and working in good faith with our Democratic colleagues in the House and Senate over the summer to come up with a “bipartisan product” that will benefit our state and not lead to an income tax or capital gains tax.”

Governor Chris Sununu Statement Following Passage of a Continuing Resolution
 
Concord, NH – Governor Chris Sununu issued the following statement after a Continuing Resolution passed the Legislature this morning:

"We are committed to ensuring that the citizens of New Hampshire do not experience any interruption of programs and services while we continue to negotiate our next state budget," said Governor Chris Sununu. "This continuing resolution will keep the current budget spending levels for the next three months, and I am pleased the Legislature is sending this to my desk." 

House Republican Leader Reacts to House Democrats Minimum Wage Hike
 
Concord, NH- House Republican Leader Dick Hinch (R-Merrimack) issued a statement following the House vote of 207-143 to pass the committee of conference report for SB10, relative to the state minimum hourly rate.
 
“On the same day that House Democrats will approve a budget that raises taxes on our state’s businesses to the tune of over $90 million, it’s sad that they’re now attempting to nearly double the minimum wage in our state. If this bill were to become law, it would have a profound negative impact on our state’s small businesses. This bill is kicking them while they’re down, and House Republicans will strongly support a veto by Governor Sununu.”

Why did 100% of House Republicans Oppose HB1 and HB2?

Overall

The Democrat committee of conference budget proposal will hurt our economy by raising taxes on job creators. It spends more taxpayer dollars than ever before, raising spending by over $1.5 billion dollars, and spends one-time revenue to grow government, which will create a budget deficit that sets us up for an income, or other broad based tax. It is unbalanced, and built on inflated and unreliable revenue estimates. This is a bad budget that sets us our state up to fail.

Increases Taxes

The proposed committee of conference report on HB1 and HB2 would reverse a tax reduction for the current tax period, raising the Business Profits Tax (BPT) from 7.7% to 7.9%, and raising the Business Enterprise Tax from .6% to .675%, costing small businesses and job creators $90 million more dollars over the biennium. In addition, the report also proposes to repeal future tax reductions in current law.

Spends Taxpayer Money at Record Levels

The proposed budget spends $1.5 billion (13.3%) more than the previous budget (total funds), and $631 million (12.8%) more in General and Education Trust Fund dollars. This is an unprecedented increase in spending of taxpayer dollars in New Hampshire, and it is unsustainable.

Spends One Time Revenue on Growing Government

New Hampshire will have a budget surplus of over $200 million this fiscal year. Responsible budgeting practice would be to use this money for one-time spending, since we can’t always rely on good economic times and high performance revenue. Democrats have proposed to use this surplus to grow government operations perpetually. If revenue should not perform as well in future years, we will have a built-in structural deficit.

Inflated Revenue Estimates

The revenue estimates for FY2019 are within reason but not so for FY2020 and FY2021.  In FY2020 and FY2021 they raised the Business Taxes base revenues $32.6M and raised the anomalies $15.7M for a total of $48.3M higher than the House estimates.  These estimates are more than pushing the envelope. Other estimates (Tobacco, Liquor, I&D, Real Estate Transfer, Securities, and Utility Property Tax) are also pushing the envelope mostly by one to three million each.  This makes the total estimates for the General Fund and the Education Trust Fund higher by at least $75.5M over the reasonable House estimates.

These revised revenue estimates were not evaluated by the House Ways & Means committee prior to their introduction and adoption in the committee of conference. In addition tobacco revenue estimates were not revised after the committee made the decision to raise the tobacco access age from 18 to 21, which will definitely have a negative effect on revenue. 

Democrats can’t help themselves. In order to spend as much money as they can, they notoriously get creative with their revenue projections to make it look like they’ve produced a balanced budget, when, in fact, they are spending money we can’t reasonably expect to come in


What Tax and Fee Increases did Democrats add to the budget and are now contained in the committee of conference report?

Sections 225‐228 Various related to BPT and BET

Increases the BPT rate from 7.7 to 7.9 percent and the BET rate from .6 to .675 percent and repeals prospective rate reductions. Estimated revenue of $37.6 million in FY 2020 and $55.5 million in FY 2021 to the General Fund and Education Trust Fund.

Section 234 Motor Vehicles; Copies of Certificates and Motor Vehicle Records

Increases the fee paid by insurance companies or any other authorized agent requesting a copy of any motor vehicle record by $1 from $12 to $13. Estimated revenue of $500,000 in FY 2020 and $500,000 in FY 2021 to the Fire Standards and Training and Emergency Medical Services Fund.

Section 235 Motor Vehicles; Drivers' Licenses; Real IDCompliant; Fee

Increase fee for Real ID Act compliant license by $10, from $50 to $60. Estimated revenue of $434,000 in FY 2020 and $521,000 in FY 2021 to the Highway Fund.

Sections 271‐273 Internal Revenue Code Conformity

Aligns NH tax code to the IRC of 1986 in effect on December 31, 2018 (The Tax Cuts and Jobs Act), however remaining decoupled from section 179 of code and the GILTI provisions. Estimated revenue of $21.25 million in FY 2020 and $21.25 million in FY 2021 to the General Fund and Education Trust Fund.

Sections 274‐280 Communications Services Tax

Clarifies the applicability of the communication services tax on VoIP and prepaid wireless communications service. Estimated revenue of $1.5 million in FY 2020 and $2.5 million in FY 2021 to the General Fund.

Sections 296‐312 Department of Environmental Services Water Resources Fund and Fees

These sections are the language of HB 682 relative to increasing certain application and permit fees and establishing the water resources fund. The Department estimates the fee changes will increase revenue by $2,340,000 in FY 2020 and by $2,340,000 in FY 2021 to the Water Resources Fund.

Sections 452‐453, Business Profits Tax Apportionment (Market based)

These sections change the BPT apportionment to allow for use of the market based sourcing method. Estimated revenue increase of $10 million in FY 2021 to the General Fund and Education Trust Fund.

Note: The above referenced revenue estimates are based off of what the revised estimates adopted by the committee of conference, and we believe are inflated to enable higher spending.


What are some other bad high-level policy proposals that Democrats added to HB2?

Section 377 New Hampshire Granite Advantage Health Care program: Trust Fund

This section allows general funds to be used for the New Hampshire granite advantage health care program

Section 103 Youth Access to and Use of Tobacco Products

Raises the age for youth access to tobacco from 18 to 21

Section 282 Housing Appeals Board

This board would be given the power to overrule local governing boards who may vote to deny certain applications relative to housing and housing development

Section 394 Repeals the prohibition on reproductive health facilities from using state funds to provide abortion services is repealed.

Sections 255-259 Introduces a brand new education funding formula that has not gone through the legislative process, and is fiscally unsustainable.


HB167 In Action this Weekend

Earlier this year, the House and Senate passed HB167, This bill allows the town of Kingston to hold a bonfire event with a car on top of such bonfire this year. The governor signed the bill on May 11th.

This weekend, Kingston will be having their bonfire as part of their 325th Celebration, thanks to HB167. The Kingston 325th Celebration Beer-fest/Bonfire on Saturday beginning at 3PM, and the three-story bonfire, pictured below, is set to start at 9:30pm.


STAY CONNECTED!
As a reminder, if you want to stay up-to-date throughout the week on important news stories and issues be sure to follow the House Republican Office on Facebook and Twitter. If you haven't done so already, you can also follow our political organization, the Committee to Elect House Republicans on Facebook and Twitter, and sign up for email updates here, for news and events related to elections, campaigns and fundraising. 2020 isn't too far away!

NH HOUSE STATS
Republicans: 165
Democrats: 233

Copyright © 2019 House Republican Office, All rights reserved.