The economy is in a state of contrasts at the moment: Inflation has reached its highest levels in a generation. Counter that with what has been a sustained hot streak in the labor market, with unemployment at historic lows nationally — and just 2.2% in New Hampshire. Wages are also rising, though not as fast as prices.
As the race for New Hampshire governor comes to a close, incumbent Republican Chris Sununu and Democratic state Sen. Tom Sherman are painting stark contrasts on how workers, the wealthy and those in search of affordable housing are faring, and what the state should do.
On taxes
While Sununu has sparred with Republican lawmakers on a handful of issues over his three terms in the corner office, one thing has been consistent: He’s worked with members of his own party to cut a range of taxes. That includes reductions in the state's major business taxes, a half-percentage point bite out of the state’s meals and rooms tax, and a phase out of the interest and dividends tax. Sununu has used GOP majorities in the Legislature to pass through these incremental tax cuts that he argues will stimulate business development and attract wealthy people to come to the state.
"Every dollar matters, and these tax cuts signed into law today will help provide economic relief for businesses across the Granite State amid record inflation nationwide,” Sununu said in June as he signed a bill to lower the business profits tax.
Sherman, meanwhile, has joined his Democratic colleagues in voting against GOP-crafted budgets that included tax cuts, arguing they benefit the wealthy while leading to higher local property taxes. Speaking on WMUR earlier this year, Sherman said, “if we are going to do tax cuts, let's not do it for the out-of-state corporations or the wealthiest who need it the least. Let's do it for the everyday people of New Hampshire, and that’s through property tax.”
When pressed during a debate hosted by Jack Heath in October, however, Sherman said he wouldn’t reverse the business tax cuts already in place.
On his campaign website, Sherman alleges Granite Staters are paying a “mismanagement tax” because of Sununu’s policies. To lower property taxes, Sherman has also floatedthe state paying a higher proportion of municipal pension costs, allocating more of the state’s share of meals and rooms tax receipts back to towns, and sending more state money to cover public education costs currently financed by local property taxes.
In 2021, Sherman, along with other Senate Democrats, sponsored a billraising the income threshold for having to pay the business profits tax. Sununu would go on to sign that bill into law.
The two candidates are less harmonious about a defeated paid medical and family leave proposal backed by Democrats that Sununu has characterized as an income tax, while Sherman equates the payments with insurance premiums. Even though the proposed plan is long dead, its ghost continues to spark debate.
On affordable housing
New Hampshire continues to struggle with a housing shortage that has pushed rental vacancy rates below 1%, while raising the cost of homeownership beyond the reach of many families.
Sununu and Sherman have both put forward plans to address the crisis, with both recognizing the role local zoning boards play in either fast-tracking or bogging down proposed developments.
Sununu’s plan, called InvestNH, uses $100 million in federal pandemic relief aid to spur construction, including $50 million in grants to developers who face financing shortfalls to build multi-family rental units. His program also awards up to $10,000 to a town for each unit of affordable housing its local planning board approves. Other money is available to cover the cost of demolition for derelict buildings.
“When you talk to businesses, the biggest issue they come back to all the time, whether it’s for frontline restaurant workers, whether it’s for folks in the manufacturing industry, we just need affordable housing in this state to grow,” Sununu told reporters this summer.
Sherman’s plan, known as Building New Hampshire Values, would use funds from the state’s budget surplus to also encourage municipalities to update their zoning codes. Sherman would also expand two tax credit programs already in place, and double the funding pool for job training programs for workers who enter the trades, including carpenters, plumbers and electricians.
During a debate on NHPR last week, Sherman criticized Sununu for what he claimed is a slow response to the issue.
“This is a housing crunch that under Chris Sununu has become a housing crisis,” Sherman said “We’ve known for several years that this was coming, and yet nothing was happening.”
On the minimum wage
The state’s minimum wage, which is pegged by law to the federal minimum rate, remains at $7.25 an hour. That’s out of step with the rest of New England, which has seen states like Vermont and Massachusetts up their minimums to $12.55 and $14.25, respectively. Though data is hard to come by, most entry level workers in New Hampshire earn more thanthe minimum pay rate, but the wage remains a partisan issue, with Democrats arguing workers deserve a living wage that meets basic needs, and Republicans contending the free market should determine the cost of labor.
In the governor’s race, both candidates are holding true to form. Sununu has twice vetoed bills passed by Democratic lawmakers that would have raised the wage, including in 2020 when a proposal called for raising the rate to $10 an hour, before an additional bump in 2023.
During a debate atNew England College, Sununu reiterated his belief that the market should set the rate.
“I hear Tom [Sherman] talking about raising the minimum wage,” said Sununu. “Look, you can walk into McDonald’s right now and make $16, $17 an hour. It is not about the minimum wage.”
Should he win re-election, or Republicans maintain control of the Legislature, New Hampshire's rate is likely to stay pegged to the national rate.
Sherman, meanwhile, votedwith the Democratic majority in 2020 to pass a wage increase, and in 2021 co-sponsored a $12 hourly rate that was defeated by Senate Republicans.
During that same New England College debate, Sherman criticized Sununu’s opposition.
“Frankly I find it appalling that the governor is so out of touch with what’s happening in his own state,” said Sherman, who added that “there are people making $7.25 an hour in our state, and the governor doesn’t know that.”
