Supporters of the New Hampshire House measure to fund Education and balance the budget went before a state senate committee today. The sponsors admitted their plan was not very attractive, but still urged its passage. Opponents were more direct. NHPR's David Darman has more.
Advocates of House Bill 375 were less than enthusiastic in endorsing the plan before members of the Senate Ways and Means Committee. Deputy House Majority Leader David Hess argued it was worth supporting because it passed the House under difficult circumstances, namely after the failure of a sales tax, income tax, and gross receipts tax.
03 36 This is the tree that is still standing. And it does close the budget deficit that we faced in the house. It satifies it. If you want to do the number by number, fraction by fraction?it may come out on the order of 2 to 3 million dollars shy, but in a six billion dollar budget, that is effectively, a balanced budget. 03 103?
House Bill 375 repeals the credit for the Business Enterprise tax that businesses take when they pay another state tax, the Business Profits Tax. Supporters of the bill say it will provide 65 million dollars to the state budget. But opponents in the business community say the repeal of the credit raises the effective tax rate for businesses and burdens them beyond their fair share. Mike Valuk, president of the Greater Nashua Chamber of Commerce, warns that a high tax rate will cause businesses to make, quote, ?capacity decisions? that will be unfavorable for the state?s economy.
07 457 ? are then made. Now you ask me what I mean by capacity decisions, well, those are the decisions that lead to where facilities, buildings, divisions and jobs are located. The right kind of capacity decision bring them here. The wrong kind send them elsewhere. 07 515
Governor Jeanne Shaheen also opposes a repeal of the credit. Judy Reardon, legal counsel for the governor, says it is bad policy, and it is also unconstitutional. Reardon says if there?s no credit, business profits could be taxed twice, and that?s prohibited by the state constitution.
?unconstitutional. 02 243 one of the things that the Bet taxes are the dividends issued by businesses. Dividends come from profits, they come from business income. And our business profits tax obviously taxes profits.
Reardon and several business owners also oppose the increase in the Room and Meals tax that?s part of the House plan. Restaurant owners say the one percent increase could cut into thin profit margins, and keep them from paying higher wages to their lowest paid workers.
The Senate Ways and Means committee will consider the arguments both for and against the plan when they head into a closed session.
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