Dietsch: State Recovered On The Backs Of Towns

Last Tuesday I heard testimony to the House Ways & Means Committee that New Hampshire recovers from recession faster than other states. What they didn't say was how the state recovered in 2013. It balanced its budget by downshifting $100 million in pension costs onto towns every year. The state used to pay 35% of teacher and municipal pensions.

To the legislature's credit, they gave back towns a fifth of former pension-sharing last year. A one-time, measly 7.5%. This year HB 50 could make that $26 mil permanent.

Last Tuesday, though, HB100 testimony argued the state is doing so well that NH should stop taxing Interest & Dividends altogether. The I&D costs wealthy folks, like me, maybe $2 per thousand invested, in a good year. Far less than property tax.

HB192 offers a different option, increasing revenues by $113 million, according to the Department of Revenue Administration. HB192 would raise the I&D deductible so fewer would pay. But it would return the rate to its traditional 5%.

Property taxes have soared since the recession. Meanwhile, the legislature has given corporations five tax cuts and wants to stop wealthy people from paying any I&D tax at all.

Isn't it time the state shouldered its pre-recession responsibilities? Pass HB 192 to keep the "extra" $113 million. Then amend HB50 to give that all back to towns instead of just 26 mil. It would by 32% of pension costs, not quite as much as the state used to pay. But it would let towns and property taxpayers begin to recover from the recession, too.

Jeanne Dietsch, Former member, Senate Ways and Means