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NH GOP Playing “Games” With Budget By Forcing Tax Cuts That “Do Not Pay For Themselves”

GOP-Appointed CBO Director Makes Clear “Tax Cuts Do Not Pay For Themselves”

Concord, N.H. – As Republicans in Concord continue to refuse to negotiate in good faith on a responsible budget compromise, Senate President Chuck Morse admitted “he could not guarantee” that the unpaid-for corporate tax cuts Republicans are pushing would promote economic growth.

Morse added, “We never came in and said, we’ll lower the business taxes, and we’ll have all this growth.”

House Speaker Shawn Jasper previously admitted that Republicans’ unpaid-for tax cuts would create a massive budget hole, writing “I do not believe that cutting [corporate taxes] will bring in more revenue, nor do I believe that by themselves they will make New Hampshire a more attractive state for businesses to locate to or to expand.”

“It’s completely irresponsible that Republicans like Chuck Morse and Shawn Jasper are continuing to push unpaid-for corporate tax cuts that they themselves admit would create a budget hole while not promoting economic growth,” said New Hampshire Democratic Party Chair Ray Buckley. “All you have to do is look around the country at places like Kansas that have already tried these failed Koch Brothers economic policies to see that all they bring is rivers of red ink and cuts to critical economic priorities.”

The Hill also reports, “The director of the nonpartisan Congressional Budget Office (CBO), who was appointed by GOP lawmakers earlier this year, said Tuesday that tax cuts don’t pay for themselves… ‘No, the evidence is that tax cuts do not pay for themselves,’ Hall said. ‘And our models that we’re doing, our macroeconomic effects, show that.’”

Yesterday, Neal Kurk said out loud what observers have long known to be true: New Hampshire Republicans are playing political games with the state’s budget and economy.

When asked why Republicans blocked funding to pay for road maintenance, Kurk told NHPR, “some of it has to do with the fact that some of us believe that there are consequences to the Governor’s veto of the budget and one of them is that things that normally would have gotten done, will not get done, or will get delayed.”     

The Concord Monitor also reported, “Partisan politics were on full display at the meeting Wednesday” as Republicans blocked transportation funding and tried to score political points against Governor Hassan.

“At least give Neal Kurk points for honesty for admitting that Republicans are deliberately seeking to hurt New Hampshire’s people, businesses and economy as they try to score political points against Governor Hassan,” said New Hampshire Democratic Party Chair Ray Buckley. “It’s no surprise that the Republican legislature’s approval is under water for the first time since 2012 considering that Republicans are now openly admitting that they are trying to harm the state’s economy for their own political gain.”

Granite Staters Speak Out In Support Of Hassan And Budget Veto

Businesses, Advocates And Elected Officials Stand With Governor Hassan As She Fights For A Fiscally Responsible Budget That Protects Economic Priorities

Tom Strickland, owner of Sequoya Technologies Group in Peterborough, wrote in an op-ed, “My business is larger than 93 percent of the businesses in New Hampshire and these tax cuts will only save me $150 per year. That’s not enough for me to hire workers, buy equipment, or expand… What these tax cuts WILL do is result in even deeper cuts in critical state programs. The needs don’t go away when the program funding does. Those needs just shift to the community and that costs us all. Please keep my tax cut. I just can’t afford it.”

In a joint op-ed, Katie Robert, president of the New Hampshire Public Health Association and Kim Mohan, executive director of the New England Rural Health Roundtable, wrote, “The priorities embraced by the 2016-17 budgets, recently passed by the New Hampshire House and Senate, seem notably inconsistent with the needs of the state from a public health and public policy perspective… While these budget priorities are disconnected with the needs of the state overall, they would be particularly detrimental to the rural communities of our state, which make up 47 percent of the state’s population and cover 90 percent of its area.” 

In an editorial on the Supreme Court’s decision upholding access to affordable health coverage, the Concord Monitor wrote, “The New Hampshire Legislature, in particular, should see the writing on the wall and reauthorize the state’s [Medicaid expansion] program without delay.” 

Tym Rourke, chairman of the Governor’s Commission on Alcohol and Other Drug Abuse Prevention, Intervention and Treatment, told the Concord Monitor, “Reauthorization [of Medicaid expansion] has a big impact on treatment availability.”

In a joint op-ed, Senator Andrew Hosmer and Rep. Cindy Rosenwald wrote, “We stand with Governor Hassan in her decision to veto the fiscally irresponsible and unbalanced Republican budget, which we can only describe as a trail of false promises. You may have heard Republicans claim that their budget increases funding for critical priorities like substance abuse treatment, mental health services, and our seniors. But there’s one very big problem. Republicans’ fiscally irresponsible budget isn’t actually balanced, placing every single one of those priorities — and more — at risk.”

Rep. Timothy Smith wrote in an op-ed, “This year, the Senate started by considering tens of millions of dollars in new tax cuts for businesses with its very first bills – but no one has really looked at the long-term consequences of these cuts.”

 

See below for a roundup of additional coverage:  

From the Nashua Telegraph:

… Hassan made good on her threat and vetoed the proposed two-year budget, saying the tax cuts would blow a $90 million hole in future years in exchange for giveaways to big corporations.

“When I made this decision, which I didn’t do lightly, what I really stepped back to think about was the progress we’ve made over the last two years and the progress we need to continue to make so that we are a competitive 21st century economy – not just in this two-year cycle, but in all the cycles to come,” she said Thursday during an interview with The Telegraph editorial board.

… Hassan criticized the Republican budget for unpaid-for tax giveaways to mostly out-of-state corporations at the expense of other economic priorities such as higher education and public safety.

Her administration said the budget would not provide year-to-year increase to the university system and leaves New Hampshire vulnerable to losing young people looking at high price tags at in-state colleges. She also blasted the budget for failing to adequately fund substance abuse prevention and diverting infrastructure funds intended for road and bridge repairs.

Hassan said she is not against corporate tax reductions when done properly, but said Republican budget writers raided all the wrong funding sources to make them a reality.

“Philosophically I’m not opposed to doing it, but we do have to be able to pay for the very things that businesses all around the state tell me are their priorities,” she said.

Rep. Cindy Rosenwald, a Nashua Democrat and party leader in the House, said there is general agreement on spending priorities and she shares the governor’s concern about the unpaid-for business tax cuts.

“They would cost $23 million in this budget and $90 million in future budgets. The evidence that such tax cuts would drive higher economic growth just isn’t there,” Rosenwald said. “States like Kansas and Ohio have tried without success, and our own experience several years ago with a reduction in the tobacco tax rate also failed.” [Full story]

From the Associated Press:

Hassan said the budget would not provide any year-to-year increase to the university system, still funded below 2010 levels, or adequately fund substance abuse prevention. She said it also would force the Sununu Youth Services Center to cut a quarter of its budget; omit a modest cost-of-living increase for employees; divert funds intended for road and bridge repairs and underfund snow plowing and removal. [Full story]

From the Union Leader:

“I have vetoed the budget passed by the legislature because it is unbalanced, makes false promises about what it funds, and gives unpaid-for tax giveaways to big corporations, many based out-of-state, at the expense of critical economic priorities, including higher education, health care, public safety and transportation,” Hassan said in her veto message. “The long-term impact of these unpaid-for corporate tax cuts will create a more than $90 million hole in future budgets, further eroding our ability to encourage economic growth.” [Full story]

From NHPR:

Hassan said she hopes negotiations will start immediately. “I urge the legislators to meet with me as soon as possible so we can begin discussions on how we can build the kind of budget that is critical to our economic future,” she said Thursday at the State House. [Full story]

NH Senate Cuts Taxes For Former Governor Benson’s Company 

CONCORD – Governor Maggie Hassan issued the following statement after the Senate today voted in favor of an amendment to House Bill 550, relative to administration of the tobacco tax and relative to the sale or exchange of an interest in a business organization under the business profits tax:

“Planet Fitness is a valued New Hampshire company, and the Granite State has a great deal to offer as its corporate headquarters, including a low-tax environment without a sales or an income tax, a highly skilled workforce and a small, responsive state government. While we want to do everything that we can to keep the Planet Fitness corporate headquarters and its high-quality jobs here in New Hampshire, we cannot hastily and without full transparency make drastic changes to our tax laws due to a last-minute request from one company without a deeper analysis of the fairness to other tax-paying businesses in the Granite State and the impact to the state’s budget.

“This proposal was brought forward at the very last second of the legislative session without an adequate public process and its costs are not paid for in the Senate budget. At the same time, the Senate budget includes other large business tax cuts that will create a hole in this budget and budgets well into the future. We must analyze the creation of this tax loophole with the same scrutiny as any other tax law changes of this magnitude would be, and have an honest and transparent discussion about the priorities we would choose not to fund in order to pay for each of these tax law changes.”

Senator Dan Feltes Comments on Passage of Special Tax Break

following the passage of HB 550 along a party line 14-10 vote, Sen. Dan Feltes, member of the Senate Ways and Means Committee released the following statement:

“Carving out tax breaks for a single business at the last minute with no transparency is not the way to re-write tax law and can lead to harmful, unintended consequences for the people of New Hampshire,” said Sen. Dan Feltes. “This tax break, which was only brought up at the last minute by former Governor Craig Benson for a business that he serves on the board for, has not had a full vetting and is being rushed through the legislative process. We shouldn’t be opening loopholes for Governor Benson, we should be closing loopholes that disproportionately benefit the wealth and big corporations at the expense of the middle class, small businesses, and property taxpayers.”

NH Senate Republicans Force Through Their Reckless Budget

“Senate Republicans’ Unbalanced Budget Will Hurt Small Businesses And Middle Class Families, Take NH’s Economy Backward,”
said NH Democratic Party Chair Ray Buckley

Concord, NH – The Senate today approved their version of the state budget for the FY 2016-2017 biennium, opting to include a series of revenue draining business tax cuts while declining to reauthorize the state’s Medicaid Expansion program. New Hampshire Fiscal Policy Institute Executive Director Jeff McLynch issued the following statement:

“The fiscally irresponsible budget approved by the Senate today reduces the state’s already limited revenue while simultaneously neglecting to adequately fund mental health, higher education, and other critical programs.”

“In light of the Department of Revenue Administration’s new findings that the Senate’s proposed tax cuts will primarily benefit a small number of very large businesses operating in the state, we should be especially concerned that these revenue losses will simply flow out of the state with no benefit to New Hampshire.”

“There is no guarantee that these tax cuts will produce jobs or economic growth for New Hampshire, but they will leave the state with fewer resources to invest in the things we need today to keep our economy strong: good schools, safe roads, a healthy workforce, and public services that support the state’s current high quality of life.”

“New Hampshire needs to compete on the things that really matter to residents and businesses alike. We need reliable infrastructure, affordable higher education, strong communities, and clean parks and recreation spaces if we are to attract new employers and residents to the state, and to ensure that those who are already here make the decision to stay.”

“By declining to reauthorize the New Hampshire Health Protection Program, this budget creates needless uncertainty for the more than 40,000 individuals who are currently enrolled in the program and may lose access to health coverage.”

“While the Senate’s budget makes some important strides in restoring funding for vital human services, it leaves many gaps that will hurt our citizens and threaten New Hampshire’s future success.”

“While the Senate’s budget is an improvement over the House version, we must still come together and compromise across party lines to ensure that we have a fiscally responsible, balanced budget that will keep New Hampshire’s economy moving forward,” stated Governor Maggie Hassan. “As we prepare to enter Committee of Conference, I remain ready and willing to work with legislative leadership to pass a compromise, balanced and bipartisan budget that makes the strategic investments needed to help expand middle class opportunity, support job-creating businesses, encourage innovation, and attract and retain more young people here in New Hampshire.”

“I continue to have serious concerns that the Senate’s plan is unbalanced and will hurt families, undermine business growth and take our economy backward. The plan includes large tax cuts that will create a hole in this budget and budgets well into the future and relies on gimmicks that will ultimately leave the budget unbalanced. Meanwhile, this plan fails to reauthorize our bipartisan health care expansion plan that is providing coverage to more than 40,000 hard-working Granite Staters and reducing cost-shifting onto all of our people and businesses. It also fails to adequately fund higher education, substance misuse, mental health, corrections and transportation, and it does not include the fairly negotiated contract for state employees,” continued Hassan.

“It is clear that any budget that relies exclusively on the votes of one political party will fail to meet the expectations of our citizens, the needs of our businesses and the needs of our economy. Now is the time to work together, negotiate in good faith, and continue to make bipartisan progress on our shared priorities for the people and businesses of New Hampshire,” concluded Hassan.

“At the start of the Senate budget process, Senate Democrats made clear that we were ready to work across party lines, just like we did two years ago, to pass a fiscally responsible budget that will move our economy forward,” said Senate Democratic Leader Jeff Woodburn. “Unfortunately, Senate Republicans took a very different approach. The partisan budget approved by Senate Republicans today prioritizes special interests and tax giveaways for big, out-of-state businesses over New Hampshire’s people and small businesses. Their budget ends the state’s business-backed, bipartisan Medicaid expansion program, which means that more than 40,000 people will lose coverage and businesses and individuals will be forced to pay the ‘hidden tax’ that results from cost-shifting of uncompensated care. The budget passed today by Senate Republicans is unacceptable and Senate Democrats will continue to fight for an honest and balanced budget that expands opportunity for all, supports businesses throughout our state, and lays the foundation for a new generation of economic growth.”

“Senate Republicans have passed a budget that simply doesn’t do what they say it does,” added Sen. Andrew Hosmer, member of the Senate Finance Committee. “By using the same budget gimmicks we’ve seen in Concord for years, Senate Republicans are once again promising more services than their budget can actually deliver. If any one of Senate Republicans’ questionable assumptions goes wrong, our state will be in trouble. The bottom line is that Senate Republicans’ fiscally irresponsible gimmicks leave this budget unbalanced – and that is unacceptable.”

“We’ve heard a lot from Senate Republicans about the things they think we can’t afford to fund in the budget. They said we can’t afford to lower tuition at our community colleges, fix our roads and bridges, fully fund mental health and substance misuse services, staff our corrections system at safe levels, or even operate the Sununu Center, which is critical for at risk youth,” said Deputy Democratic Leader Donna Soucy. “But while Senate Republicans said we can’t afford to do all those things, it’s important to look at what they thought we could afford. This Senate Republican budget includes tax giveaways for big, out-of-state businesses and a provision that would undermine regulation of a controversial taxpayer funded risk pool in order to do a special favor for their friends. The reality is that while we can’t afford to do special favors for Senate Republicans’ friends, instead we need to invest in our state’s people, businesses and economy.”

“Despite what they say, the Senate Republicans’ budget is neither compassionate nor responsible,” said Sen. Lou D’Allesandro, ranking Democratic member of the Senate Finance Committee. “It’s not too late for Senate Republicans to put aside their partisanship and work across party lines with Senate Democrats and the Governor to finalize a budget that’s truly responsive to the needs of New Hampshire’s people, businesses, and economy. We know that we can – and must – work together to craft a budget, because it’s in the best interest of our state’s economic future.”

“Senate Republicans’ budget includes gimmicks that mean they’re not actually funding what they say they are. Not to mention that they’ve chosen to give big business tax giveaways instead of adequately funding critical economic priorities like substance misuse treatment and continuing our state’s successful Medicaid expansion program,” said NH Democratic Party Chair Ray Buckley.  “There is still time for Senate Republicans to finally put their partisanship aside and actually negotiate with Governor Hassan to pass a responsible budget that will move New Hampshire’s economy forward.”

RELATED READING: Full Senate Rejects Amendment to Include Employees’ Contract in Budget

NH Senate Republicans Cut Business Taxes At The Expense of Working Families

Image by Marc Nozell (CC Flickr)

NH Senate Chamber Image by Marc Nozell (CC Flickr)

Republicans on the Senate Finance Committee voted today to give big businesses more tax giveaways while making small businesses and middle class families pay the price.

“Our budget is a statement of priorities and with the actions taken by the Senate Finance Committee over the last week have clearly demonstrated they side with large corporations rather than the working people of New Hampshire,” said Senator Woodburn. “The cost of these tax giveaways is clear and the price is dear. Rather than fund Medicaid Expansion, which is helping tens of thousands of Granite Staters and strengthening our economy, Senate Republicans have decided to give tax cuts to large, out-of-state corporations instead.”

The Senate voted to approve an amendment that reduced the Business Profits Tax by 0.2% and the Business Enterprise Tax by 0.025% in Fiscal Year 2017. Based on the fiscal notes in SB 1 and SB 2, the original vehicles for the tax giveaways, these tax cuts would reduce state revenues by $15.6 million in Fiscal Year 2017. Senate Democrats have fought to include the extension of Medicaid Expansion in the budget, which would cost about $12 million in Fiscal Year 2017, far less than the cost of the business tax cuts.

“New Hampshire’s business community has called on us to continue the state’s successful expansion program because it’s reducing heath care cost-shifting onto our families and businesses, strengthening the health of our workforce, and boosting our economy,” said Sen. Lou D’Allesandro, ranking Democratic member of the Senate Finance Committee. “Our businesses need healthy workers and reductions in energy rates before they need a 30th tax reduction in 8 years. New Hampshire is a great place to do business now and these tax cuts do nothing to address the real problems facing our growing economy.”

Senate Republicans’ big business tax giveaways would cost $15 million in the next biennium, which is more than the cost of continuing the state’s successful Medicaid expansion program for 40,000 Granite Staters.

“We’ve heard throughout the budget process that New Hampshire needs to ‘live within its means.’ If we cut business taxes today only to put off their full consequences for later years, this action violates that notion entirely,” said  New Hampshire Fiscal Policy Institute (NHFPI) Executive Director Jeff McLynch.

“The Finance Committee has approved a cut of $14 million from the FY 2017 budget while the state struggles to find necessary funding for higher education, health care, and other services to support vital human needs,” said McLynch.

“These proposed reductions in business tax rates will reduce revenue by more than $80 million per biennium when fully phased in, with no plan to replace the lost revenue,” said McLynch.

“Phasing business tax reductions in overtime simply puts off – for another day and onto future legislatures — the difficult choices and tough tradeoffs that would have to be made to accommodate the revenue losses certain to result from business tax cuts,” said McLynch.

Not to mention that Senate Republicans have also proposed cutting more than $3 million from the Governor’s proposal for substance misuse treatment and defunding the state’s landmark mental health settlement.

“Senate Republicans are putting their majority at risk as they vote for more big business tax giveaways while cutting critical economic priorities and threatening health coverage for 40,000 Granite Staters,” said New Hampshire Democratic Party Chair Ray Buckley. “From cutting funding for substance misuse treatment to refusing to continue New Hampshire’s successful Medicaid expansion program, Senate Republicans’ budget proposal would hurt the health and economic wellbeing of our communities and undermine the state’s ability to lay the foundation of a new generation of economic growth.”

NH Senate Republicans Vote For Tax Giveaways And Force Massive Cuts To The State Budget

Today the Senate voted to pass Senate Bill 1, reducing the rate of the business profits tax, and Senate Bill 2, reducing the rate of the business enterprise tax. The Republican-led Senate voted to pass SB 1 & SB 2 on a party line vote of 14-10.

“Because they are unwilling to consider reasonable revenue changes – including a modest increase in the tobacco tax – the New Hampshire House of Representatives is currently decimating critical economic priorities for our state, including cutting the Department of Transportation in half, taking away health coverage from tens of thousands of people, cutting services like meals on wheels for seniors, cutting funding for higher education, and even cutting travel and tourism promotion in half,” stated Governor Maggie Hassan. “These two bills would create even deeper holes in this and future budgets, negatively impacting our ability to invest in the shared priorities that are critical to the success of our people, businesses and economy. Further eroding the revenue sources that do exist is irresponsible and will lead to further reductions.”

“While we must maintain our low-tax environment, which the Tax Foundation ranked as the seventh-best in its business tax climate index, we must also continue investing in priorities such as a strong and healthy workforce pipeline, a modern transportation infrastructure, and safe communities that businesses tell me are critical to their ability to grow, thrive and create jobs. As we face ever-tightening budgets, we must examine the fiscal impact of these tax breaks with the same scrutiny as any new spending, and supporters of these bills must address how the lost revenue would be offset,” concluded Hassan.

These tax giveaways are not going to do anything to help fix any of the dozens of problems currently facing our state.  The Republican’s in the legislature are refusing to do anything but force more cuts to programs like Meals on Wheels and substance abuse treatment.  These tax breaks will not help fix the hundreds of failing roads and bridges that are literally crumbling beneath us.

“With the House making draconian cuts to budget, we are seeing massive cuts to the department of transportation, mental health services, development disabilities waitlist, substance abuse treatment, university system, social services for the elderly, travel and tourism, and the Veterans Home,” said Senate Democratic Leader Jeff Woodburn. “The cost of these tax giveaways is clear and the price is dear. The House Republican majority seems to have answered the question of who’s going to pay. Senate Republicans who support these fiscally irresponsible tax cuts should tell the public what additional cuts they plan to make.”

“Businesses need a modern and safe infrastructure, high-quality schools, and healthy, safe, and livable communities,” said Senator Woodburn. “These tax giveaways will hurt New Hampshire’s ability to provide these critical economic priorities. We should be investing in these priorities not add more devastating cuts on top of what the House cuts.”

An in-depth look at the GOP Budget will show that they care less about the people of New Hampshire and more about giving away tax breaks to large corporations.

“Just this week we’ve seen how far the House has gone in its one-sided efforts to balance the budget, making drastic cuts to transportation, health care, and services for the elderly, the homeless, and Granite Staters with developmental disabilities. Layering in another $15 million in cuts will endanger state government’s ability to serve the people of New Hampshire and its ability to compete with other states to attract our future workforce,” said New Hampshire Fiscal Policy Institute Executive Director Jeff McLynch.

“The proposed business tax cuts will not create jobs or foster economic growth, but will instead drain millions of dollars out of the budget each year,” added McLynch. “New Hampshire can do better.  Rather than add to the long list of tax cuts it has made in recent years, New Hampshire should invest in the future by providing needed resources to public colleges and universities, and protect the most vulnerable among us today.”

The Republicans in the House and the Senate have their priorities all wrong.  Their immoral budget will hurt tens of thousands of hard working Granite Staters and line the pockets of the wealthy.

We Need A New Hampshire Senate That Puts People Above Big Business

Cutting Taxes 3-dThis week the Republican controlled State Senate chose to put business profits ahead of working families, by voting to cut taxes for big business.

The New Hampshire Fiscal Policy Institute reported, “SB 1, which would lower the business profits tax (BPT) rate, and SB 2, which would lower the business enterprise tax (BET) rate, together likely would reduce state revenue by nearly $80 million on a biennial basis once fully phased in.”

That’s right boys and girls, the GOP wants to slash $80 million dollars from our budget and give that all to big business. $80 million dollars is a lot of money. That would build a lot of bridges, pave a lot of roads, repair a lot of schools, and employee a lot of people.

“These business tax cuts will not create jobs or boost the economy, but instead will drain millions of dollars out of the state budget each year,” said Jeff McLynch, executive director of the New Hampshire Fiscal Policy Institute.

The Union Leader reported, “(Democrats) noted only 1 percent of the businesses in the state pay 76 percent of the business profits tax, meaning large out-of-state corporations produce the bulk of the revenue. ‘This is a giveaway to large, out-of-state corporations,’ said Sen. David Pierce, D-Hanover. ‘It puts the interests of large, out-of-state corporations ahead of the needs of the people of New Hampshire and ahead of the needs of the state’s small businesses.’”

“Senate Republicans are so obsessed with implementing the Koch Brothers agenda of more tax giveaways for big businesses that they’re willing to blow a $78 million hole in the budget and make middle class families and small businesses pay the price,” said Raymond Buckley, Chair of the NH Democratic Party.

Cutting taxes is the mantra of the Republican Party. Cut taxes for businesses and voila` economic prosperity and budgets overflowing with tax revenues. It is the cure all for everything! Cut taxes and more businesses will move here then with the additional revenue we can build whatever we need. We need new bridges, cut taxes. We cannot pay our bills this year, then cut taxes!

This trickle down theory of economics has failed so many times I have lost count. President Reagan, hero to the current Republican Party, drove our nation into debt with tax giveaways like this. The President George W. Bush doubled down on Reagan’s policies and cut taxes during wartime, leading to the worst financial meltdown since the Great Depression.

 (Image Gage Skidmore Flikr CC)

(Image Gage Skidmore Flikr CC)

More recently, Governor Sam Brownback of Kansas put this theory into action when he signed “one of the largest tax cut bills in Kansas history.”

“Since the tax cuts took effect at the beginning of 2013, Kansas has added jobs at a pace modestly slower than the country as a whole. The earnings and incomes of Kansans have performed slightly worse than the U.S. as a whole as well.” (Read more here.)

It worked so well that Kansas has had their credit rating downgraded. Standard and Poor’s lowered the state’s credit ratingbecause of theses tax cuts.

“The downgrades reflect our view of a structurally unbalanced budget, following state income tax cuts that have not been matched with offsetting ongoing expenditure cuts in the fiscal 2015 budget,” said Standard & Poor’s credit analyst David Hitchcock in a release.

Yet even after the downgrade, Gov. Brownback believes that cutting taxes is the way to grow your economy. “We need jobs and we have proven the way to that is through lower taxes,” Brownback told the press.

However others have outright rejected the idea that lowering business taxes and keeping the minimum wage low will attract new business to the state.

Minnesota took a very different approach. They raised taxes on the wealthy and raised their minimum wage.

“Every Minnesotan will pay more under this tax bill, and unfortunately it’s going to harm Minnesota’s economy and hurt job growth in the state,” said House Minority Leader Kurt Daudt, R-Crown.

The thing is that Minority Leader Kurt was absolutely wrong! This week it was reported that due to the progressive agenda of the Governor and the Legislature, Minnesota is expecting to have a $2 billion dollar surplus!

Minnesota’s State Economist Laura Kalambokidis said rising wages and lower gas prices mean more money for consumers and thus more taxes for the state. Meanwhile, the state will save more than $100 million over the next two years because there will be fewer than expected students in poverty and with special needs, as well as fewer students overall.”

Minnesota Governor Mark Dayton plans to use the additional money by investing in schools, implementing a fully funded Pre-K program, and to conduct some much needed infrastructure repairs.

I guess we need to ask ourselves, what type of New Hampshire do we want? Do we want a state that gets downgraded, has sluggish job growth, and stagnant wages? If so, then we should definitely cut taxes for these large corporations.

Or, do we want a state that is rebuilding our failing roads and bridges, investing and expanding public education, and building a strong and thriving economy? That’s the New Hampshire I want, and cutting taxes is the wrong approach.

Cutting taxes is not the magic solution to every problem. Someone once said, you can tell me what you value, however, me your budget and I will tell you what you truly value.

If we enact these tax cut for large corporations, who are we really helping? Big Business or real Granite Staters.

Senate Vote for Business Tax Cuts Limits State’s Ability to Invest in Economic Growth

CONCORD, NH – The Senate today voted in favor of providing tax breaks for businesses that will reduce the state’s ability to make vital investments in education, infrastructure, and other services essential to supporting a strong workforce and fostering a vibrant economy.

“These business tax cuts will not create jobs or boost the economy, but instead will drain millions of dollars out of the state budget each year,” said Jeff McLynch, executive director of the New Hampshire Fiscal Policy Institute. “The revenue loss in the upcoming biennium is about the size of the annual General Fund budget for the Department of Resources and Economic Development or more than one and half times that of the Department of Justice. That is before the cost of the tax cuts begins to balloon in future years. Back-loaded tax cuts like the ones the Senate approved today are fiscally irresponsible and not in New Hampshire’s best interest today or in the future.”

SB 1, which would lower the business profits tax (BPT) rate, and SB 2, which would lower the business enterprise tax (BET) rate, together likely would reduce state revenue by nearly $80 million on a biennial basis once fully phased in.

“Contrary to proponents’ claims, these business tax cuts will not pay for themselves, but they will likely lead to significant cuts in the public structures and services vital to sustained and widely-shared economic prosperity,” added McLynch. “To ensure the state remains attractive to residents, workers, and entrepreneurs, New Hampshire must invest in quality schools, in affordable higher education, in safe roads and bridges, and in healthy, vibrant communities.”

“Time and time again, we have seen that business tax cuts don’t pay for themselves,” said Senator Woodburn. “The question I still have for my Republican colleagues is: Who’s going to pay? These tax giveaways will have an enormous cost for our people, businesses and economy—almost $200 million in lost revenue through the year 2020.”

“Our businesses need workers and reductions in electric rates before they need a 30th tax reduction in 8 years,” said Sen. Lou D’Allesandro, Vice Chair of the Senate Ways and Means Committee. “New Hampshire is a great place to do business already and these tax cuts do nothing to address the real problems facing our businesses.”

“No evidence was offered that this expands opportunity for anyone,” said Sen. Feltes, member of the Senate Ways and Means Committee. “Businesses need a modern and safe infrastructure, high-quality schools, and healthy, safe and livable communities. These irresponsible tax cuts will hurt our ability to provide these critical economic priorities.”

New Hampshire’s revenue system has yet to fully recover from the national recession of 2007 through 2009. At the close of FY 2014, General and Education Fund revenue amounted to $2.17 billion. After adjusting for inflation, that sum is approximately 12 percent or roughly $290 million less than what the state collected from the same sources in FY 2008. Between FY 2008 and FY 2014, the combination of the BPT and BET, after adjusting for inflation, has dropped almost 20 percent or just over $136 million, due in part to numerous tax cuts put in place in recent years.

Jeff McLynch provided testimony outlining the shortcomings of proposed business tax cuts at the Senate Ways and Means Committee’s January 20 public hearing. The testimony is available online.

The New Hampshire Fiscal Policy Institute is an independent, non-profit, non-partisan organization dedicated to exploring, developing, and promoting public policies that foster economic opportunity and prosperity for all New Hampshire residents, with an emphasis on low- and moderate-income families and individuals. Learn more at www.nhfpi.org.

Proving Once Again That Tax Cuts For The Wealthy “Job Creators” Do Not Work, S&P Lowers Kansas’s Credit Rating

"Kansas Apologizes" by David Shankbone via Wikimedia Commons

Photo from October 30, 2010 “Rally to Restore Sanity” – by David Shankbone via Wikimedia Commons

For decades, the right-wing has held fast to its belief that tax cuts can fix the economy and end government deficits.

Nevermind that the idea — cutting taxes would somehow increase government revenues? — never made much sense.

They’ve kept the faith, despite all evidence to the contrary.

Myself, I think it’s long past time for the right wing to give up on this theory. I mean: at some point, shouldn’t people be able to accept the evidence, even if it goes against their beliefs?

I mean, even Republican leaders eventually gave up on it.

CBPP_effects_of_KS_tax_cutsBut two years ago, the Tea Partiers down in Kansas decided to try, try again… and Governor Sam Brownback signed “one of the largest tax cut bills in Kansas history.”

Even though many Republicans in the state legislature opposed it. (Republican Senate President Steve Morris told the press: “It is not good public policy.” He also called the tax plan backed by the tea party “very reckless.”)

Since then, there has been no evidence of any economic boom. “Since the tax cuts took effect at the beginning of 2013, Kansas has added jobs at a pace modestly slower than the country as a whole. The earnings and incomes of Kansans have performed slightly worse than the U.S. as a whole as well.” (Read more here.)

And yesterday, the chickens came home to roost. Standard and Poor’s lowered the state’s credit rating, because of the tax cuts.

“The downgrades reflect our view of a structurally unbalanced budget, following state income tax cuts that have not been matched with offsetting ongoing expenditure cuts in the fiscal 2015 budget,” said Standard & Poor’s credit analyst David Hitchcock in a release.

The rating agency gave the state a “negative” outlook on both ratings and projects that the state will face serious budget woes by the end of fiscal year 2015.

But Brownback still didn’t seem to get the message. “We need jobs and we have proven the way to that is through lower taxes,” he told the press – even after the ratings downgrade.

State Representative Jim Ward: “When presented concrete evidence of a fiscal crisis … he denies it exists. He blames the people who bring the data. You cannot live in a world where you reject all information that doesn’t feed into your ideology.”

Except… it looks like some people can.

Kids Or Corporations? Which Do We Value More?

Image by Rocksee (Flickr CC)

Image by Rocksee (Flickr CC)

From Pennsylvania, this story:

Governor Tom Corbett cut corporate taxes by $1.2 billion.  Then he cut nearly $1 billion dollars from the state’s education budget.  Then he acted shocked when schools from Philadelphia to Pittsburg were forced to close.

Then a child died.

From the AFT: “We don’t know if a school nurse could have saved this young boy. But we do know every child deserves a full-time nurse in his or her school. We do know all parents deserve to know that their child will be safe and his or her most basic needs will be tended to at school. We do know that all Philadelphia children deserve better.”

The boy wasn’t the first child who died.  Twelve-year-old Laporshia Massey died from asthma complications that started while she was at school.  Could her death have been prevented there had been a school nurse on staff?

Of course, Governor Corbett responded by attacking the teachers’ unions – without mentioning the budget hole created by his corporate tax cuts.

Yep, another politician who wants our teachers to make “sacrifices.”

(But not the corporations.  Somehow, they never ask the corporations to make “sacrifices.”)

But it’s not just Pennsylvania.

A friend of mine is an elementary school art teacher, whose classroom is out of supplies and whose budget is out of money.  How do you teach elementary school art without construction paper and glue sticks?

A middle school student complains about seeing her teachers outside of school.  “It’s really embarrassing when you run into your teacher in a restaurant,” she says.  “But it’s even more embarrassing when your teacher is your server at the restaurant.  Why can’t we pay teachers enough that they don’t need a second job to survive?”

All across the country we hear stories of states being forced “make the hard choices” when it comes to budgets.  They try to make us believe that they have no other choice than to cut programs to keep their budgets balanced.  They never mention the possibility of restoring revenues that were given away as tax cuts.

A strong public education is vital to our communities.  A strong education is the foundation of the American Dream.  Public schools provide the tools necessary to lift people up, to find good high paying work, and to get that little house with the white picket fence.  A strong public education system — which I believe should include higher education — is the key to countering America’s poverty problems, too.

But budget cuts have forced some schools to close completely, leaving children and their parents scrambling.  Teacher layoffs have led to larger class sizes, and less time to help students.  Budget cuts are forcing teachers and parents to supply schools with basic necessities like paper, pens, chalk, and paper towels out of their own pockets.

Cuts to school lunch programs mean that too many teachers are reaching into their own pockets to buy lunch for students who would otherwise go hungry.

Yet corporations keep their tax cuts.

The American Federation of Teachers and the National Education Association are on the front lines of this fight to protect and preserve our public education system.  AFT is running a new campaign entitled “reclaim the promise” that challenges people to stand up for public education.

Stand up and fight to ensure that children in all communities get access to a high quality education.

Stand up and say “NO” to the government leaders who would rather cut funding to schools than ask businesses to pay their taxes.

Stand up and say: “NO MORE hungry children.”

And “NO MORE children dead, without a school nurse around.”

 

(Special Hat-Tip to my friends Kevin Mahoney and Sean Kitchen at Raging Chicken Press for always keeping the light shining on the atrocity of Governor Corbett’s attack on public schools and public workers.)

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