NH Child Tax Credit FAQ

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Is your family from New Hampshire? If so, have you noticed that few of your Gen Y and Z family members remain in the Granite State?

It’s not just you. New Hampshire’s graduating high school seniors flee New Hampshire at a higher rate than any other state in America, in most cases never to return. This is not normal. In states around America, multigenerational families share life together. Many Granite Staters do not seem to realize how unusual it is that their children and grandchildren are continually streaming out of New Hampshire to start new families elsewhere.

The problem is only growing worse, as New Hampshire has suffered the single-largest 10-year decrease in children of any state. One key problem cited by young Granite Staters is a lack of affordable housing. As demographer Peter Francese has noted, “the only truly affordable housing in the state is if you’re 55 or older and have no children.”

Rep. Matt Simon’s bipartisan Child Tax Credit bill, HB 294, would take a small but significant step towards fixing this problem. Modeled on New Hampshire’s Elderly Tax Credit, this pro-liberty, pro-family bill would allow localities to give young families an abatement on their own taxes.

The New Hampshire House will likely vote on HB 294 the week of March 6, 2023. Now is the time to contact your state representative and ask them to vote against the Municipal Committee’s recommendation of “Inexpedient to Legislate,” or “ITL,” and support this bipartisan bill.

Where did the idea of a New Hampshire child tax credit come from?

Some other states have child tax credit systems. However, the idea of a New Hampshire Child Tax Credit was first advocated by Joe Dubiansky—a since-retired Deerfield attorney—in 2008.

Dubiansky argued that, while the state legislature has given local governments many tools they can use to disfavor families with children, towns have not been allowed any similar tools to attract and retain young families. Because New Hampshire’s longstanding Elderly Tax Credit “seems to work quite well,” Dubiansky proposed there should be another, parallel system that could be used to attract young families.

As New Hampshire sees the writing on the wall and faces its own demographic collapse, some communities—like Pelham—are now looking for ways to attract young families. The anti-family bias in our state statutes, however, gives these communities relatively few options. It is time to try Dubiansky’s proposal.

Aren’t children a burden on the tax system?

There is a longstanding, bipartisan New England tradition of viewing children as a tax burden and contriving ingenuous ways to drive them out of town. To be sure, school costs in New Hampshire are out of control. However, experience shows that punishing young families for reproducing does nothing whatsoever to solve this problem.

Penalizing families neither boosts local revenue nor effectively reduces school taxes. Before 2019, for example, Pelham discriminated in favor of age-restricted housing for the express purpose of keeping children out of the town. But demographer Peter Francese explains that, if anything, this policy increased Pelham’s tax burden.

Costs incurred by residents of Pelham’s age-restricted housing—such as costs to medical services—actually exceeded the property taxes on age-restricted housing units, which had been
diminished by the elderly tax abatements. Meanwhile, while school enrollments declined, school taxes did not.

This example is important. In New Hampshire towns where the elderly are net recipients of services, should the legislature force those towns to raise taxes on the elderly? Of course not. Yet this is exactly what opponents of the Child Tax Credit are saying when they object that some families might receive more in services than they pay in taxes. Instead, we should respect local choice based on local circumstances.

Why is demographic collapse the government’s problem to solve?

Some Republicans insist that the government should never try to solve social problems—even with small government, pro-liberty solutions like local option tax cuts.

Whether you agree with that claim or not, it ignores the fact that our state laws have an anti-family bias: local governments currently have many legal tools they can use to alienate families, but few options to attract and retain families. As our General Counsel has argued, our demographic collapse has actually been engineered by decades of government policies consciously designed to drive young families from the state and age the population.

By supporting HB 294, your representatives can solve a government-created problem by getting government out of the way—and correct state government bias by expanding local choice.

Is a child tax credit anti-elderly?

The idea of disfavoring young families might sound pro-elderly to some. Yet this ignores the reality that the elderly themselves will suffer when governments create large, all-elderly areas. The elderly benefit from being in a community of people of all ages.

In fact, New Hampshire’s demographic collapse will eventually hurt our elderly residents the most. Consider that, in less than 10 years, most people in Carroll County, New Hampshire will be over the age of 65. Only a single county in all of America has an over-65 majority: Sumter County, west of Orlando, Florida. The realities there should raise red flags about where New Hampshire is heading. Even though the elderly residents of Sumter Counter are economically well off, they are increasingly suffering from critical staffing shortages in essential services. The elderly need a young workforce to live safe and dignified lives.

Job openings, by themselves, will not cause a young workforce to sprout out of the ground or drop from trees. Nor will New Hampshire’s demographic crunch resolve itself. This is not some economic cycle which the free market, by itself, will naturally fix. It is a misconceived but deliberate manipulation of our human ecology by state and local governments.”

Is a child tax credit a big government solution or a handout?

HB 294 is not a big government solution, as it devolves decision-making power to localities. It also does not enable a “handout,” as these tax credits—just like the existing Elderly Tax Credit—would simply be abatements on a person’s own individual tax debt.

If Republicans will not support a local option tax cut that is pro-family, what pro-family policies would they support?

If Republicans claim to oppose all “favoritism” by local governments, are they going to repeal the existing Elderly Tax Credit and other option tax credits? We know they will not—nor would we want them too. Rather than taking choices away from localities, Republicans should respect and expand local choice.

Would a child tax credit be unworkable?

A typical objection to HB 294 is that it will be too complicated for localities to implement. But the Elderly Tax Credit has worked for years, and the Child Tax Credit would simply replicate the same system.

There is no evidence that localities have too much difficulty setting the amount of the Elderly Tax Credit, determining whether people are lying about being elderly, and so on.

Why did the House Municipal Committee vote against the bill?

We think the Municipal Committee was mistaken in good faith. Opponents of the bill insisted to the committee that the bill would somehow be unworkable, and many committee members accepted these claims. But, as shown by the existing Elderly Tax Credit, there is no reason to think this is true.

Notably, New Hampshire’s Municipal Association did not oppose the bill and suggested only minor changes to the text, which Rep. Simon supported.

Some have raised objections to paragraph II of the bill, which is aimed at incentivizing landlords to rent to families. However, Rep. Simon, Cornerstone, and other supporters of the bill have said they would support the bill even if the legislature removed this paragraph.

How long has Cornerstone been involved in demographic issues?

Cornerstone has been sounding the alarm about New Hampshire’s demographic collapse for over ten years. We hope that others are now starting to realize that, as our Executive Director recently wrote in an op-ed, children and families are not a burden, but a “fresh infusion of population and workers those communities so desperately need.”

Take action now: Contact your representative—whatever party they belong to. Ask them to vote against the committee report of ITL on HB 294, Rep. Matt Simon’s Child Tax Credit, and support the bill.

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