My Turn: Who benefits from New Hampshire Advantage? We do!
In his Dec. 9 Monitor column mocking “the New Hampshire Advantage,” James Hunt asks for a study comparing New Hampshire’s economy with Vermont’s, positing that Vermont’s is actually better, despite its income and sales taxes. A look at the “advantage” resulting from our sales tax-free status makes clear the reality.
Art Woolf at Northern Economic Consulting of Westford, Vt., published a report in 2006 that looks at the economies in the border counties of each state since the imposition of Vermont’s sales tax. Quoting the report’s executive summary, “In the years before Vermont implemented these policies, per capita retail sales activity in Vermont’s border counties was equal to that in the New Hampshire counties bordering the Connecticut River. “Fifteen years later, sales of goods subject to the sales tax in those Vermont counties “are one-half the level of the New Hampshire border counties.”
And the disparity doesn’t stop at taxable items.
Regarding food purchases, both retail and on-premise, “Per capita sales in Vermont and New Hampshire border counties were very similar from 1963 through 1987. But since 1992 the Vermont county per-capita sales have consistently been 15 to 20 percent below sales in New Hampshire’s border counties.”
This then has pushed rooms and meals tax revenue and business tax revenue to New Hampshire’s coffers, where otherwise it would have been deposited into the Vermont budget.
Brian Gottlob of PolEcon Research recently wrote a report for the Retail Merchants Association of New Hampshire that looks at the impact of a sales tax in our state, including the effects on state and local economies and budgets. The report demonstrates even a low-level sales tax would cause a decline of more than $50 million in current state revenue and the loss of more than 13,000 jobs. It would create 3.8 million square feet of empty retail space. Lower property values resulting from the vacancies would mean either a reduction of municipal services or, more likely, a shift of the property tax burden to homeowners.
Who benefits from the tax-free shopping piece of the “New Hampshire Advantage”? To begin with, the taxpayers, particularly homeowners, who otherwise would experience an increase in other taxes.
(Curtis J. Barry is a registered lobbyist with The Dupont Group, whose clients include the Retail Merchants Association of New Hampshire.)