Down in Concord

“Three groups spend other people’s money: children, thieves, politicians. All three need supervision.” — Dick Armey

There is an old fable about a scorpion asking a frog to carry him across a river. The frog is afraid of being stung during the trip, but the scorpion argues that if it stung the frog, the frog would sink and the scorpion would drown. The frog agrees and begins carrying the scorpion, but midway across the river the scorpion does indeed sting the frog, dooming them both. When asked why, the scorpion explains that this is simply its nature.

It seems that it is the nature of Democrat politicians to raise taxes and fees. Taxpayers, especially those of us with lower incomes, are the ones who get stung. The Democrats previously passed five bills to increase taxes or fees. As part of their budget they increased six other taxes or fees.

Democrats increased by 25% a tax on fuel oil. They made permanent a “temporary” tax increase they originally passed in 2009 that doubled boat registration fees. They raised a license fee for youth skill camps by 300%; increased the cigarette tax by 30 cents per pack; and increased the gas tax by 67%. On all of these bills Democrats voted more than 90% in favor of an increased tax or fee, Republicans voted more than 90% against the tax or fee increase.

The Democrats’ budget delays for a year – and nobody should be surprised if next year they delay it again – a business tax reduction dealing with loss carry-forwards. That change would have been especially useful for high-tech R&D firms. Don’t we want more such companies to come to NH? Their budget similarly delays two other business tax reductions.

They increased the fee for a marriage license and the fee for a saltwater fishing license. They stung property tax payers by downshifting costs for the county nursing homes. Which brings to mind one other change that will sting county property tax payers. The House Democrats and the Governor have indicated that they will adopt expanded Medicaid. This will cost the state tens of millions of dollars, and will also cost the counties millions of dollars. The counties lose money on every Medicaid patient – more patients means more losses, which the county property tax payers have to make up.

On a normal day, the House deals with about 30 bills. Last Wednesday it had only the three budget bills to deal with, but it still took almost all day. What took most of the time was debating 16 separate amendments to HB 2, which has all of the changes to law necessary to make the spending numbers legal. For example, current law says that not less than 73% of the Highway fund will go to the department of Transportation. The Democrats wanted to spend only 67% of the fund on actual highways, so they wrote in HB 2 a section which says that it is okay for them to break that part of the law.

The first proposed amendment was to delete the downshifting of county nursing home expenses. The Democrats are shifting $11 million in expenses from the state to the counties. The cost to property tax payers of Sullivan county will be approximately $400,000. Republicans opposed downshifting; Democrats voted for raising your property taxes.

The Governor and House Democrats want to spend more money than the state will collect in revenue. They propose to make up the difference by raiding so-called “dedicated” funds. These are funds set up for a specific purpose. E.g. a part of the motorcycle license fee is intended to be used for motorcycle safety training and nothing else. Democrats want to use these funds as piggy-banks to pay for all sorts of other things. Their budget authorizes the Governor to raid any and all funds as she deems appropriate.

Republicans proposed to mark just one dozen of these dedicated funds as off-limits. Money in those funds could be used only for the specific purpose for which people paid the fee, not raided for unrelated purposes. These dozen funds were intended for such purposes as: dam maintenance, the 911 system, unemployment compensation, the Land and Community Heritage Investment trust Program (LCHIP), and search and rescue. Fifteen Democrats crossed over to vote with the unanimous Republicans but they fell just one vote shy.

Other amendments would have deleted the three increases in business taxes, deleted the increased license fee for saltwater fishing, reduced the 30 cent increase in the cigarette tax to 20 cents. Republicans were concerned that such a large increase in the cigarette tax would hurt small businesses near the borders where people from neighboring states come to save money. Republicans almost unanimously voted for lower taxes and fees; Democrats almost unanimously voted for higher taxes and fees.

It should be no surprise to anybody that the Democrats have new taxes, higher taxes and fees, and that they have much higher spending. It is mildly surprising that they have absolutely no new spending on roads and bridges. They sold the new gas tax on the basis that it was needed to repair our crumbling infrastructure. But their budget actually spends LESS on the department of Transportation than last year’s budget spent. It’s almost as if the Democrats didn’t really believe their own talking points.

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Down in Concord

“Politicians and diapers have one thing in common: they should both be changed regularly… and for the same reason.” — unknown

Last week the House finished all of its bills except for the three big budget bills. Two bills, HB 135 and HB 617, received lengthy debate as expected.

By a narrow margin of 189-184, the House passed HB 135, restricting the right to defend self, family, and community against deadly force. Sullivan County Republicans Grenier, Rollins, and Smith voted to protect your rights; Democrats Cloutier, Gagnon, Gottling, Irwin, Lefebvre, O’Hearn, Schmidt, and Sweeney voted to restrict your rights.

HB 617, increasing the gas tax by 67% – the largest tax increase in state history – was passed on a mostly party-line vote. Both sides agreed that we should spend more money on roads and bridges. Republicans argued that the Highway Fund has more than enough money if we would simply spend it on actual highways rather than diverting one-third of it to agencies that have nothing to do with constructing and maintaining our highways. Every Sullivan County Democrat voted for the tax increase. Republicans Rollins and Smith voted against the tax increase.

The House has finished all but three of its bills. Those three are the big budget bills, HB 1 and HB 2, which deal with the operating budget, and HB 25, which does the capital budget. When I say “big” I mean both literally and figuratively – HB 1 is about 800 pages long. Total appropriations are more than $11 billion, or 10.2% higher than the current budget.

The operating budget is divided into two parts. HB 1 is a giant spreadsheet. (As of this writing it is available only as a PDF file. Later it will be downloadable as an Excel file.) If you suffer from insomnia, trying to read all of those numbers should put you to sleep. By contrast, HB 2 is lots of words. It has changes to the law to allow money to be spent the way HB 1 says.

Current law may say one thing about how money is to be spent, but if the budget writers want to spend it differently, they just add a section to HB 2 to make it legal for them to break the law. A typical example is Sec. 2, which states “Notwithstanding any provision of law to the contrary, … revenue sharing with cities and towns shall be suspended for the biennium”. The word “suspend” appears 23 times in HB 2; “notwithstanding” appears 44 times.

When debating HB 617, the massive gas tax increase, Democrats promised that all the new money would go to roads and bridges. The proposed HB 2 budget bill illustrates how easily the budget writers can break a promise. They just add a short paragraph saying that a section of law is suspended for the biennium.

Interestingly, the proposed budget does not spend any more money on roads and bridges. In fact, it spends LESS. The  department of Transportation (DOT) portion of the Highway Fund is reduced from $222 million in the current budget down to $192 million in the proposed budget. Total DOT spending from all funds is down from $567 million this year to less than $551 million next year. Yes, that’s right. After telling us how important it is to spend more money on roads and bridges, they propose to spend less money in their new budget. Tell me again why taxpayers have to cough up MORE money for the new gas tax, when the Democrats plan to spend LESS money. More and more it appears that they want the new gas tax not to improve our highway infrastructure, but to pay for all sorts of other programs.

There is (at least) one other way the budget writers break past promises. They grab money that was promised to be used for a specific purpose. Within state government there are hundreds of programs that collect fees to pay for particular activities. These moneys are supposedly dedicated to a particular purpose separate from all other general government activities. One prominent example is the Land and Community Heritage Investment Program (LCHIP). A $25 fee on mortgage transactions is intended to fund land and historic conservation. For five years, when money was tight, that money was moved out of the dedicated fund to the general fund to balance the budget.

Two years ago, the budget writers had the decency to transparently specify in the budget that they were taking money from LCHIP for the general fund. This year the budgeteers don’t say what dedicated funds they will raid. They delegate to the governor authority to choose which funds to raid to come up with $22 million to “balance” the budget.

The new budget was passed by the House Finance Committee just two days ago. It has been visible to the public for not much more than one day. As people have more time to scrutinize, no doubt we will learn even more troubling details.

The Finance Committee will hold a public briefing on the two big budget bills. I don’t want to suggest that their budget is a joke but the briefing is on April Fools’ Day.

On April 3rd, the full House will vote on these three budget bills, then during the next two months the Senate will amend – perhaps extensively – the House budget.

Massive new gas tax not needed

The claim by Reps. Carson et al. (letter, March 19) that their votes for an 83% increase in the gas tax were necessary to fix our deteriorating infrastructure is just plain wrong.

Oh, their intentions are good – my town of Sunapee could dearly use more money for roads – but the road to hell is paved with good intentions. The bill they voted for does not do what they say it will.

The fact is that HB 617 won’t repair a single bridge nor pave a single mile of road. It does not spend a dime on roads and bridges. It is a taxing bill, not a spending bill. Their rhetoric simply does not match reality.

Their massive tax increase does not mean there will be an increase in spending on roads and bridges. The budget writers can always find a way to divert money elsewhere. The proposed budget actually diverts $28 million away from the department of Transportation (DOT). When their budget spends LESS money on roads and bridges, why should struggling taxpayers put MORE money into the highway fund?

There is an alternative, a way to send more money to towns and cities, and to spend more money on roads and bridges, without a huge tax increase. The first step is the budget writers should stop diverting money away from DOT. Before taxpayers are forced to spend a dime more on new taxes, make sure the old taxes are spent the right way.

The Highway Fund collects more than $270 million per year via the current gas tax and vehicle registration fees. That would be more than enough money to maintain and improve our highway infrastructure if it were all spent on actual highways. The problem is that a full $80 million per year is siphoned off and spent on things that have nothing to do with building or maintaining roads and bridges.

The proposed budget allocates just 67% of the Highway Fund to the DOT. (Current law says that “no less than 73%” should go to DOT, but budget writers simply change the law when they want money to go somewhere else. That is exactly what they could do with the new gas tax despite promises to the contrary.)

Without raising the gas tax a penny, instead by reallocating and prioritizing spending, the legislature could raise more money for roads and bridges. The legislature should increase the DOT’s allocation of existing highway money to 80%, 90%, or a full 100%.

Currently, $30 million goes in block grants to towns and cities. The legislature could increase that amount to $35 million. That would actually be more money to municipalities than the new gas tax would produce.

Those two changes – dedicating Highway Fund expenditures to actual highways, not diverting to other agencies, and increasing the block grants to localities – those two changes would provide more money for roads and bridges than the new gas tax would. There is simply no need for higher taxes.

But what about all those other agencies currently funded with gas tax money? They are a little more than 1% of the whole budget. Let them find money in the rest of the budget. If roads and highways are high priority, that means that something else must be lower priority. Let them cut lower priority spending.

The new tax lets our legislators avoid making the hard choices as to which items are higher/lower priority. If they won’t cut other spending then the net effect of new taxes is to provide more money for low priority items.

(Printed in InterTown Record, April 2, 2013.)

Down in Concord

“Government is the great fiction through which everybody endeavors to live at the expense of everybody else.” — Frederic Bastiat

Bastiat’s maxim was on display at the regional public hearing in Claremont last Monday (March 18). With a few exceptions, the participants were saying, “Please government, take money from everyone else so that my favorite program might live.” Sooner or later, they might understand another Bastiat quote: “People are beginning to realize that the apparatus of government is costly. But what they do not know is that the burden falls inevitably on them.”

At the hearing, I spoke against the new gas tax. I did not speak well, but apparently people did understand that I oppose the massive increase in the gas tax because the existing highway funds would be enough if even 83%, not to mention 100%, of the highway funds were dedicated to roads and bridges instead of having a full one-third diverted to things that have nothing to do with building and maintaining our road system.

The House began the year with 604 bills. To date, 234 have been killed, 207 were passed and will go to the Senate, 127 were retained in committees for more work in the Spring and Fall. The House will vote on 32 bills next week. The three big budget bills and a related resolution are still being drafted. The committees will make their budget recommendations by Thursday next week for floor action on April 4.

Last week the House met in session on both Wednesday and Thursday to act on 69 bills. It killed some good bills and some bad bills, passed some good bills and some bad bills. Most bills are fairly innocuous and of little interest to most people. There were three bills (at least) that many people might find interesting. The House killed HB 665, a casino gambling bill, by a bipartisan 4-1 vote. It passed HB 573, medical marijuana, by a similar bipartisan vote. By a smaller, but still bipartisan, 3-2 margin, the House passed HB 621, making possession of one-quarter ounce or less of marijuana a violation instead of a misdemeanor.

Next week the House will vote on 32 bills. Many of these bills went to a first committee, then passed the House, and were referred to a second committee. Having passed the House once already, they likely will pass the House when they come back for a second vote.

One bill that no doubt will be debated is HB 135, requiring would-be victims to try to retreat from an assailant before they are allowed to use a weapon to defend themselves, their families, or their community. There have been many instances of an armed civilian stopping a gun massacre before it became a massacre. If they had retreated to save themselves, those incidents would have turned into full-blown massacres. E.g. a woman in church killed a shooter who was carrying hundreds of rounds of ammo. Under HB 135, she would have had to escape to safety instead of using her handgun to save the lives of dozens of church-goers.

Another bill to be debated is HB 617, the largest tax increase in state history. Republicans will oppose it as unnecessary; we should just stop diverting $80 million each year away from the department of Transportation (DOT). Before the House takes even more money from struggling taxpayers it should ensure that the existing gas tax is used almost entirely for roads and bridges and not spent on agencies that have nothing to do with building and fixing our highways.

Proponents of this massive tax hike claim that we need it to fix our “crumbling” infrastructure. But HB 617 won’t repair a single bridge nor pave a single mile of road. It does not spend a dime on roads and bridges. It is a taxing bill, not a spending bill. With their arguments they are trying to tie together taxes and spending but the two are separate. The legislature could spend the exact same amount on roads and bridges with or without HB 617. For instance, they could allocate 100% of the highway fund to DOT, and that would actually put more money into DOT than the new gas tax would.

Conversely, the legislature could raise this new tax, and still not spend a dime extra on roads and bridges. Even if they keep their promise to put all the new money into roads and bridges, they could divert all the old money into state police and courts, welcome centers, etc.

Even if people favor the new spending, that does not mean we should accept the new taxes. If roads and highways are high priority, that means that something else must be lower priority. Let them cut lower priority spending – e.g. send less money to rich faculty and administrators in the university system.

The new tax lets them get away without making the hard choices as to which items are higher/lower priority. The net effect of a new tax will be more money available for low priority items.

And finally, the House Finance Committee will hold a budget briefing on the two big budget bills. I don’t want to suggest that the budget will be a joke but the briefing is on Monday, April 1st.

Down in Concord

Q: How many politicians does it take to change a light bulb?
A: Two. One to assure the public that everything possible is being done while the other screws it into a water faucet.

This is the time of year known legislatively as Crossover. House bills cross over to the Senate and Senate bills cross over to the House. The House has a deadline of Thursday, March 14 for some bills; Thursday, March 28 for other bills; and Thursday, April 4 for the big budget bills. With 252 bills left to vote on, the House will be meeting not just on the normal Wednesdays but also on some Thursdays.

The House started with 609 bills. Every single bill has a public hearing, where anyone at all can testify without any advance notice. Then it has one or more committee meetings, all open to the public, a committee vote, and finally a floor vote by the full House. Some bills then go to a second House committee where the process is repeated – another public hearing, a committee vote, then back to the House floor.

The House has passed 106 bills, killed 132, and “retained” 107 bills. Retained means that the committee decided to do further study on the bill later in the Spring, through Summer, and into Fall. They might retain a bill because the idea seems good, but the language of the bill might not be quite right, or perhaps complex enough that they want to spend more time making sure that there aren’t any unintended consequences. I often remark that there is one law that a legislature can never repeal, and that is the Law of Unintended Consequences.

Because the House is so close to its deadlines, the only bills still having public hearings are those that passed the House only to be sent to a second committee, or the big budget bills which have later deadlines.

On Thursday, March 14 at 1:30 there will be a public hearing for HB 617, the monstrous gas tax increase. They have scheduled it in Representatives Hall because they rightly expect a large crowd of people testifying or observing. My guess is that outside the State House will be a large crowd of protesters against the proposed 83% increase of the gasoline tax.

For some families this tax will be an extra $300 they have to cough up every year. By the Democrats own estimates, taxpayers will have to pony up an extra one billion dollars during the next decade. The trucks that deliver almost all of our goods will pay much more in higher diesel taxes, which means that the price of almost every product would go up.

The Democrats claim that the tax is necessary to fix our crumbling roads and bridges but that is almost a bait and switch. More than a million dollars of the new gas tax will go to Fish&Game every year according to the sponsor’s own memo. Other money will go for snowmobile trails; the largest chunk will go toward state police. All of those may be admirable but they have nothing to do with fixing and improving our roads and bridges.

The Highway Fund has more than enough money to construct and maintain our highway infrastructure. The problem is that a large chunk of the Fund is diverted away from the department of Transportation (DOT) to other agencies. The Democrats’ proposed budget spends only 67% on the DOT.

Before we raise the gas tax by 83%, we should dedicate 83% – not just 67% – of the Highway Fund to actual highways. The tax-raising Democrats want taxpayers to pay more money for roads and bridges at the same time their proposed budget diverts $160 million away from roads and bridges. Does that really make sense?

Opponents of this simple idea – that we use the existing money as efficiently as possible before we impose a new burden on struggling taxpayers – raise the absurd objection that this would devastate the state police who dip into the Highway Fund. Does anyone seriously think that the legislature would fail to fund the State Police? This is a standard scare tactic of governments everywhere – they threaten that the most important or most desired programs will be killed if the taxpayers don’t come up with more money.

The total proposed budget is $11 billion. If we took just 1.5% of that budget for state police and related agencies, then we could dedicate 100% of the Highway Fund to the DOT to work on roads and bridges. Does anyone really think that there is not 1.5% of waste or lower priority programs in that massive budget?

Let’s tell our Representatives to stop siphoning gas tax money out of the Highway Fund before telling us to put more money into the fund.

On Monday, March 18 from 5:00 to 8:00 p.m. we will have a second opportunity to tell them to spend taxpayers’ money wisely. There will be a state budget hearing in Claremont at the Sugar River Valley Regional Technical Center, 111 South Street. I plan to attend and testify that the budget should use realistic – not pie in the sky – revenue estimates, should prioritize spending, and should stop diverting money from the Highway Fund before telling taxpayers to put more money into the fund.

Please join me in opposing the largest tax increase in state history.

NH budget hearing in Claremont

The House Finance committee is holding five regional budget hearings. One will be in Claremont, Monday, March 18 from 5:00 to 8:00 p.m. at the Sugar River Valley Regional Technical Center, 111 South Street, Claremont.

If you oppose the 83% increase of the gas tax then attend the hearing and say so.

If you think that the Highway Fund should be spent on actual highways, not on things that have nothing to do with fixing and maintaining roads and bridges, then go and say so.

If you think that the budget should assume realistic revenue estimates, and that it should be balanced without hypothetical casino revenue, then go and tell your Representatives.

If you want to balance out the many special interests requesting more spending for their particular programs, then show up and testify.

Testifying is easy. Hey, if I could learn to do it, then anyone can.

Plenty of waste to sequester

The sequester is a mere 2% of the federal budget. If they really wanted to cut spending don’t you think they just might be able to find 2% of waste in that enormous budget. How about they start by trimming these items:

  1. $2,908,000 for shrimp aquaculture research
  2. $1,454,000 for mosquito trapping research
  3. $4,841,000 for wood utilization research
  4. $2,573,000 for potato research
  5. $775,000 for “Pickle Science and Technology”
  6. $500,000 for helicopter logging
  7. $600,000 for a “gurgling toad sculpture” in DoD building
  8. $8.3 million for golf course renovation in Louisiana
  9. $1.4 million for decorative rocks in Nevada
  10. $500,000 for food at Justice Department banquets
  11. $1 million for sugar cain research center in Louisiana
  12. $623 million for the National Endowment for the arts
  13. $6 billion to turn federal buildings into “green” buildings.
  14. $200 million for the lease of alternative energy vehicles for use on military installations.
  15. $650 million for the digital television converter box coupon program.
  16. $600 million to buy hybrid vehicles for federal employees.
  17. $75 million for “smoking cessation activities.”
  18. $18 million to rebuild recovery.gov website
  19. $461 million for “salmon restoration”
  20. $480 million for a “redundant” F-35 engine
  21. $15 million for a “Barbasol museum”
  22. $19 million for a “Free clam benefit” for people who have never eaten clams
  23. $10 million for attorneys of illegal immigrants
  24. $700,000 for a bike trail in Minnesota
  25. $1 million for a river walk in Massachusetts
  26. $213,000 for olive fruit fly research in…France
  27. $200,000 for a hunting and fishing museum in Pennsylvania
  28. $200,000 for a post office museum in Las Vegas
  29. $350,000 for “Gay Men’s Health Crisis, Inc.”
  30. $150,000 for turf grass research
  31. $10 million to connect a dead-end street to I-75
  32. $11.4 billion for Amtrack bailout
  33. $1.5 billion for the Metro Transit system in Washington D.C.
  34. $1.2 million to study the habits of the woodchuck
  35.   $150,000 to study the Hatfield-McCoy feud
  36. $1 million to study why people don’t ride bikes to work
  37. $219,000 to teach college students how to watch television
  38. $3.1 million to convert a ferry boat into a crab restaurant in Baltimore
  39. $13 million to repair a privately owned dam in South Carolina
  40. $4.3 million for a privately owned museum in Johnstown, Pennsylvania
  41. $2.7 million for a catfish farm in Arkansas
  42. $500,000 for a swimming pool in Banning, Calif
  43. $500 million to bail out ship building company
  44. $2 million for “kitchen relocation” in Fairbanks, Alaska
  45. $1.5 million to “transport naturally chilled water” from Lake Ontario to Lake Onondaga
  46. $167,000 for “Horn fly research” in Alabama
  47. $450,000 for the Baseball Hall of Fame
  48. $11 million to buy “business attire” for job seekers
  49. $750,000 for a soccer field at Guantanamo Bay
  50. $15 million on Internal Revenue Service public relations efforts

The author reports that he found this $22 billion of savings in about 40 minutes. Don’t you think the politicians in Washington could find $85 billion of non-essential spending in a couple days time?

No, the Obama administration will try to find the most painful things to cut so as to put pressure on for no cuts at all.