Recently, Chief Executive Magazine released their “Best States for Business 2012″ which is based on a survey of 650 business leaders on questions such as tax and regulation, quality of workforce, and living environment.

Unfortunately, New Hampshire’s sterling reputation among the nation’s top business leaders is beginning to tarnish. In 2012, New Hampshire fell by 8 spots to land at number 26. More troubling, New Hampshire has been one of the largest losers since 2008  dropping 12 spots.

So the question is why? Looking more closely at the survey points to the culprit–not being a right-to-work state. In fact, one of the CEO comments on New Hampshire had this to say about right-to-work:

“New Hampshire is coming on strong. If they can ever institute “right-to-work” legislation, they could rise to number one.”

Additionally, this is what they had to say about right-to-work in general:

North Carolina, Tennessee, Indiana, Virginia, South Carolina, Georgia and Utah held their positions in the top 10, with Indiana moving up a notch to fifth. CEOs indicate that workforce quality is the state’s single greatest strength, and since it became the 23rd right-to-work state last year, the Hoosier State is likely to punch above its weight competitively in the future. “Indiana is like a breath of fresh air,” volunteered one manufacturing CEO. “I have operated on both coasts, the Southeast and Chicago, and Indiana is where I will keep my manufacturing operations.”

It may be no accident that most of the states in the top 20 are also right-to-work states, as labor force flexibility is highly sought after when a business seeks a location. Several economists, most notably Ohio State’s Richard Vedder and Harvard’s Robert Barro, have found that the economies in R-to-W areas grow faster than other states, have higher employment and attract more inward migration.

Speaking of Indiana, here is what one CEO had to say about their recent adoption of right-to-work:

“Indiana is centrally located, has a balanced budget and excess reserves on hand, is a low overall tax environment, is business friendly and is now a right to work state. If you want to locate in the Midwest, there is no other state in its class.”

So there you have it. New Hampshire does have a good business climate, but failing to enact right-to-work is causing us to slip-slide down the list. After all, 23 states now have right-to-work and it will be difficult, if not impossible, to ever reach the upper echelons of this CEO survey without it.

Recently we came across this article by Robert Stein, former deputy assistant secretary for macroeconomic analysis at the U.S. Treasury Department, on “Taxes and the Family.” The whole article is worth a read, albeit slow-going at times, because he makes a compelling argument that the federal tax code should be more friendly to families with children.

Why? Put simply, these households are engaged in production–creating human capital in their children. Arguably, this human capital is the most important form of capital in the entire economy. While the tax code recognizes capital investment by businesses, it is failing to do so for human capital. Robert Stein states the problem as such:

In particular, it is time to rethink how the tax code treats ­parents. Too many free-market economists still consider families an ­afterthought — ­arguing that the tax code should be “neutral” about raising children, as if parenting were merely one hobby among many. But raising children is hardly just another pastime: It is one of the most important services any American can perform for our country.

Even if we ignore the societal and cultural implications of parenting and consider economic factors alone, no government — especially not a government committed to an entitlement system like ours — can be neutral toward the very existence of future generations of taxpayers. Our nation’s long-term economic prospects are threatened by a declining fertility rate that, if it remains constant, will only barely manage to replace our current population. And even as Social Security and Medicare depend on large numbers of future workers, they have created an enormous fiscal bias against procreation, undermining an important motive for raising children: to safeguard against poverty in old age.

By targeting tax reforms to address these problems, policymakers would both offer meaningful relief to American families and create political opportunities to enact other pro-growth policies. Such reforms could eventually yield a much simpler tax code with lower top marginal rates on work and investment, as well as more favorable treatment for families with children. The result would be a tax-reform agenda with the right attitude toward families — and one with a chance to break the political logjam that has prevented serious change for a generation . . .

And in the end, it is right and proper to show some favor to parents. Our country is not comprised of individuals who simply fall out of the sky as fully grown citizens — and our civilization’s continued existence hinges on the willingness and desire of adults to raise children. Our public policy can no longer fail to reward those who do.

This Thursday the Senate Health and Human Services Committee will be voting on HB 1560, the Health Care Compact, in committee. Cornerstone strongly supports this bill for reasons listed below.

Cornerstone urges Senators Bradley and Lambert (both on the HHS Committee) to reject Obamacare and pass the Health Care Compact which is the first step to rejecting federal control of health care in New Hampshire and enlarging the universe of choices that New Hampshire citizens have for health insurance.

Some of our Senators seem to be persuaded that we may lose federal dollars if the compact passes. The threat of losing federal dollars was also taken to heart by those in Senate leadership last week when many Senators failed to vote in support of pro-life bills.

I hope our good senators will keep in mind that the prosperity we enjoy in New Hampshire as the state with the largest private sector share of personal income did not occur because we pursue policies that maximize the flow of federal dollars to the Granite State. Our prosperity was born by our focus on maintaining a low tax burden and aversion for intrusive regulations.

The federal government will not bring prosperity to New Hampshire. Please tell our Senators that we don’t want them to trade our state rights to Washington, D.C. in exchange for federal dollars like our neighbors in Maine and Vermont. New Hampshire is the beacon of hope for business owners and families in New England and they need access to a menu of competitive choices for health insurance, not a one-size-fits-all policy.

What will the Health Care Compact do for New Hampshire?

The Health Care Compact, HB 1560, will bring health care regulation and control of our tax dollars back to state government.

The Health Care Compact DOES NOT make any cuts to any existing Medicare or Medicaid programs or benefits.

The Health Care Compact will allow Granite Staters a greater voice in health care by bringing authority back to state government that is far more accountable to voters.

Medicare and Medicaid under federal control have become a massive fiscal liability and Medicaid is bankrupting our state. Between 2001 and 2011 Medicaid enrollment has gone from 83,500 to 163,000 recipients an increase of 98% and Medicaid spending by state government has grown from $878 Million in 2001 to 1.42 Billion in 2010 with federal funding decreasing from 56% to 50% this is an increase of 62%. Most of this growth is due in part to federal mandates and program expansion.

Passing the Health Care Compact will allow New Hampshire to join with other states to regulate healthcare and control health care dollars New Hampshire receives.

By returning Health Care to the authority of state government, citizens have a greater voice in health care policy and, as a result, will restore local control, greater fiscal accountability, and transparency to our health care system.

Please contact Senator Jeb Bradley (Chairman of the Senate HHS Committee) and Senator Gary Lambert (member of HHS Committee) today and courteously ask them to fight Obamacare by passing the Health Care Compact, HB 1560.

Dist. 3, Sen. Jeb Bradley, jeb.bradley@leg.state.nh.us, 271-8472

Dist. 13, Sen. Gary Lambert, gary.lambert@leg.state.nh.us, 271-2609

FOR IMMEDIATE RELEASE

Contact: Ellen Kolb, VP Government Affairs, Cornerstone Action, 603-321-2703

The passage of a ban on partial-birth abortion opens a new chapter in advancing the life issues in New Hampshire. Despite Senator Kelly’s claim that the abortion-related debate was “resolved a long time ago”, thousands of New Hampshire residents know better. HB 1679 keeps intact a woman’s right to choose whether to continue or abort a pregnancy. It simply says that New Hampshire refuses to put out the welcome mat for practitioners of a gruesome procedure akin to infanticide. We hope Governor Lynch will let this bill become law.

New Hampshire moved one step closer to collecting abortion statistics through today’s Senate passage of HB 1680. We note that this was a voice vote; no senator was willing to go on record against it. This is a common-sense bill and it is long overdue. Governor Lynch should have no trouble with this one.

##

J. Scott Moody, Vice President of Policy for Cornerstone Policy Research, recently gave this presentation on why New Hampshire needs to enact Right-to-Work (Powerpoint). Check it out!

Anecdotally, it is a well-worn verse in New Hampshire that the state has been losing its young people. A new study from the U.S. Census Bureau confirms this.

The study titled “Historical Migration of the Young, Single, and College-Educated: 1965 to 2000,” (pdf) examined the past four decennial censuses to determine the net migration of this population among the 50 states. Based on a state’s net migration over these four time-periods, they classify a state as a “consistent gainer,” “inconsistent gainer,” “inconsistent decliner,” and “consistent decliner.”

As shown in the chart below, New Hampshire is classified as an “inconsistent decliner” because there was one time-period (1985-1990) where New Hampshire was a net in-migrant state. However, upon closer look at the data, that one time-period fell significantly short of reversing the out-going tide of young, single, and college-educated folks.

The 1965 to 1970 time-period was New Hampshire’s worst with 212.6 people for every 1,000 people between the ages of 25 and 39 leaving that state. The time-periods 1975 to 1980 and 1995 to 2000 were net out-migrant years but at a much lower level (-34.9 and -114.8, respectively). The one in-migrant time-period was 1985 to 1990 with 52.9 people per 1,000 coming into the state—a rate that is far short of off-setting the out-migration of other time-periods.

Overall, this is an important piece of the puzzle when it comes to understanding the underlying population trends that have contributed to New Hampshire’s Demographic Winter—where 3 counties now have more deaths than births. Put simply, these young people are the foundation of New Hampshire’s future families. So New Hampshire’s declining birth rate is, in part, due to having fewer families in their prime child-bearing years.

As such, if New Hampshire is going to reverse Demographic Winter then we will have to find a way to not only keep our young people in the state, but also to attract young people from other states. The best way to accomplish this goal is by enacting Right-to-Work (Powerpoint) which would boost jobs–the prime concern of young, single, college-educated folks.

Wendy Warcholik, Executive Director of Cornerstone, had the honor of speaking at the Tea Party Rally in Manchester on Sunday.  It was a beautiful day, the crowd was enthusiastic, and the line-up of speakers was incredible. Wendy’s talk was titled “Demographic Winter and Taxes” from which the following is excerpted:

The sad reality is that New Hampshire’s families are under a state of siege. This siege stems from no-fault divorce, the universal availability of contraception, the legalization of abortion, the rise of cohabitation and today’s debate over same-s*x marriage.

Now the consequences of the decline in the family are becoming clear.  Demographers are now tracking a new phenomenon that they have termed “Demographic Winter.” Demographic winter is the point where there are too few babies being born to support the current population level.

While it may be spring-like here today, more and more of New Hampshire is succumbing to Demographic Winter. In fact, just recently the U.S. Census Bureau released new population data for 2011 by county which showed that 3 counties are already in the red zone—Belknap, Carrol, and Coos—having fewer births than deaths. Five other counties—Grafton, Sullivan, Cheshire, Merrimack, and Strafford—are in the yellow zone with only a thin cushion of births over deaths.

So what does this have to with tax day? Put simply, a shrinking population base means the current tax burden will be spread over fewer people. As such, if the level of taxes doesn’t change, the tax burden we all pay will get higher.

In the long run, this is simply unsustainable since fewer people and a rising tax burden means that it will become much harder to generate economic growth. Without economic growth, Demographic Winter will be compounded by folks leaving to find greener pastures. This is a viscous cycle that we must start working to avoid TODAY–help Cornerstone’s efforts in avoiding this catastrophe by Donating Today.

One tax solution that Cornerstone supports is the enactment of what is commonly known as Education Savings Accounts (ESAs). New Hampshire’s version is embodied by HB 1607 which works via a business tax credit and is currently winding its way through Concord.

It goes without saying that education is the one of the largest expenses of raising a child. And New Hampshire already has one of the highest property tax burdens in the country.

And while we get decent returns for our money, it is simply not enough. ESAs would allow parents to decide the best form of schooling for their child—whether it’s a traditional public school, a charter school, a private school or, the biggest trend in education today, homeschooling—and would significantly help couples who desire to have a large family.

Additionally, ESAs would provide needed financial relief to current and future families. Under the status quo, any form of schooling beyond public schools comes at a steep financial penalty because families will always have to pay their property taxes in addition to their expenses for other options.

In the end, public policy must start recognizing the traditional family unit as the best and only way for the state to avoid the ills of Demographic Winter. Anything less will mean that we will leave our children a legacy of higher tax burdens and less economic prosperity.

FOR IMMEDIATE RELEASE 4/5/12

CONTACT: Ellen Kolb, Legislative Affairs Director  603-321-2703

Cornerstone Supports HB 228;UrgesStateSenators to Distinguish Abortion from Health Care

In days when insurance co-pays and insistence on religious freedom are called elements of “a war on women” by some of our fellow citizens, we need to set the record straight. Women do indeed speak for themselves. Among those diverse voices are pro-life women whose beliefs and ideals are at risk of being not just overlooked but rejected by policymakers whose job it is to promote the general welfare, not just the welfare of the best-funded, most vocal citizens.

Cornerstone is inConcordtoday for a hearing on HB 228, to keep family planning funds away from abortion providers so that no matter who is in the White House,New Hampshirewill maintain separation between family planning, which is health care, and abortion, which is not. When this bill was introduced a year ago, none of us thought that funding would become such a compelling issue both in our state and in Washington.

To those who say this discussion is a distraction from more important issues, or even that the matter is already settled, I say wrong on all counts. In fact, if I were to accept the it’s-all-settled argument, the Supreme Court would back me up, having ruled for at least the past twenty years that the right to a procedure or medication does not include a right to have that procedure or medication paid for by others. We’re here today for a state bill, while we recognize that a related dispute we did not seek is brewing inWashington.

When the federal government calls a procedure “preventive” and thus “free” under the Patient Protection and Affordable Care Act, we know that there’s no such thing as “free.”  Everyone, including women with religious objections to the procedures, must pay, since everyone will be required to carry insurance. Religious institutions providing insurance to employees will have to pay to include that coverage even if the procedures violate the tenets of the religion in question. We are moving from choice to compulsion, and the religious liberty violation adds insult to injury.

New Hampshire’s own mandate, passed a dozen years ago, was not part of a system of mandatory participation, which is a critical difference from PPACA. If state mandates like ours have helped to lead to the provisions of the federal proposal, though, it’s time to re-evaluate our state’s policies. Pro-life women who assumed they could avoid funding things to which they objected are finding that this may no longer be the case. In these circumstances, it’s time to re-set our policies and funding priorities.

Pro-life women are patients, too. So are their children. We all have a stake in how health care is provided. We are learning the hard way that the link between insurance and health care does not always serve our needs, which go beyond physical health. We are bold enough to want it all, and experienced enough to know that we can’t count on anyone else to speak for us. We want state policies that enhance health care choice, including the choice not to pay for procedures to which we are morally opposed. We want state policy that recognizes abortion is different from health care. We want federal policy that does not consider women’s fertility to be a preventable disease. We expect our religious beliefs to be respected, not as some outliers on a social scale, but as vibrant, essential elements of our community.

We sought no social war on these things, but if that’s what we’re faced with, women will be there, not all on one side. We’ll defend what we know to be right for our future and that of our children.

###

Proponents of the current gambling bill (HB 593) seek to broaden support by using some of the new gambling revenue to offset existing business taxes such as the Business Enterprise Tax and Business Profits Tax.

However, this is bad tax policy because gambling revenue is more volatile than the taxes it would lower.  For instance, gambling spending is completely discretionary which means consumers will cut this type of spending first when the economy falters.  Also, gambling will be geographically limited to a few areas of the state making it susceptible, for example, to rising gas prices which discourage travel.

The Tax Foundation has reached similar conclusions:

. .  .state-run slot machines, whether overseen by the lottery agency or another agency, would present all the problems of state-run lotteries, including volatility as a revenue source.  The state lottery is a poorly designed implicit tax, paid disproportionately by the poor, and slot machines would simply exacerbate the tax policy problems created by the lottery. [emphasis added]

The goal of any good tax reform plan is to broaden the tax base (on consumption) while lowering the tax rate.  The gambling tax would do the opposite by having a very narrow tax base (just 4 casinos) and very high tax rates (40 percent) . . . call it the “anti-tax reform plan.”

Additionally, New Hampshire policymakers should take note of the poor state of casinos in neighboring states before jumping into an overly-saturated gambling market that would bring more problems than benefits.

For example, Maine recently expanded gambling, but now the Portland Press Herald is questioning that decision.  Here is a poignant clip from the story:

As a story in the New York Times Magazine last week noted, the pool of potential gamblers is both finite and collectively nearing, if not exceeding, retirement age. Saying that “anyone who has ever wanted to try a casino has tried a casino,” one industry analyst from Los Angeles told the Times that market saturation has already been reached in areas where casinos are competing.

“There are no new customers out there,” Michael Mezcka said.

His comments were part of a longer analysis detailing why the largest casino in the Western Hemisphere, Foxwoods in Ledyard, Conn., is $2.3 billion in debt and facing significant pressure from “multiple levels of creditors” to get back on a sound fiscal footing . . .

Still, as the examples of Foxwoods and the Atlantic City casinos show, these operations can no longer be considered printing presses for money no matter where they are put.

How long will it be before New Hampshire is subsidizing these casinos because the state government has become addicted to the gambling revenue?  If Foxwoods is struggling—with all of its advantages such as size, agglomeration with Mohegan Sun, and closer geographic proximity to urban areas—how long will New Hampshire’s casinos last without state aid?

At the same time, the economic costs associated with gambling — such as crime, additional law enforcement costs, gambling addiction treatment costs, lost worker productivity — are staggering, often far exceeding a state or community’s total revenues from gambling.  The social costs are just as staggering with authorities in gambling districts reporting dramatic increases in divorce, suicide, bankruptcy, child abuse and domestic violence related to gambling.

Finally, gambling hurts existing businesses by siphoning away discretionary dollars that would have been spent at local, mom-and-pop shops and will destroy New Hampshire’s “family-friendly” brand.  Our New Hampshire restaurants and hotels have earned their business in our state by refining their offerings to customers and adapting to their communities over time.  If HB 593 passes, legislators will have revealed their preference for granting monopolies to out-of-state businesses at the expense of their responsibility to ensure a favorable business climate for existing New Hampshire businesses.

Policymakers who desire to support the principles of limited government will vote no on this bill which values monopolies over existing businesses, distorts the tax system and ushers in a host of social costs that will inevitably burden Health and Human Services and town welfare departments.  Voters are unlikely be kind to legislators in November who vote in favor of allowing casinos to blemish the family-friendly environment of the Granite State.