Letter to New Futures on Why We Should Not Support The Budget

Letter to New Futures  From Representative Sue Almy, Lebanon

I did your training decades ago to become an activist against addiction in this state.  I have fought for twenty-one years to get the funding we would need to avert the opioid and alcohol crises we find ourselves in now, that affect our economy as well as society and individual families (my middle sister died of addiction at age 49).  I fought to help create the Alcohol Fund, and helped in our often vain attempts to get more of what was promised for it.  My Finance colleagues fought to try to get Medicaid rates that would make it possible for substance abuse treatment providers to stay in our state and in their occupation.  I was devastated when the Great Recession destroyed our ability to make meaningful progress on these during the only terms when we had full control of the budget.  Combatting addiction requires money as well as good management and long-term commitment.

This year, you have chosen a self-defeating path.  The budget contains a second set of tax cuts larger than those in the prior budget.  We have hardly begun to have to live with the first set of tax cuts, because they began with a tiny impact on FY16, and they will grow every year.  In FY22, when the final tax cut from these two budgets takes effect, we will have lost 22.5% of our business taxes, plus $22 million of further special deductions and credits.  Assuming that NH can manage to equal the national growth expected by the Federal Reserve from this year forward, by FY22 we will be losing $208 million per year from our revenues.

The tax cuts are highly unlikely to produce new growth.  Economic researchers and business recruiters alike put tax cuts below questions of workforce, infrastructure and energy for business attraction and growth, and say any effect will take years to occur.  Workforce and infrastructure require public investment, and the creators of the prior and this budget have cut resources to most of the institutions that provide such investment, including providing less than is necessary to addiction help.  NH has a major workforce shortage already.  In FY17, with the first full year of tax cuts in place, NH business tax revenue has grown a mere 1.4%, while national economic growth, including inflation, was 3.2% for the tax year generating the revenue.  The FY16 surge predated the tax cuts and was NH belatedly catching up with the rest of the country.

Every year, with their tax cuts, the situation will worsen.  Every two years, they will point out that we don’t have enough money, and they will cut further.  If Democrats or moderate Republicans somehow win power, we will be hamstrung.  Even if we could agree quickly on the tax increases required to counter the cuts in effect, the first 12-18 months of the new budget would have to rely on the existing revenues, as we cannot retroactively increase taxes and our biggest taxes are paid on economic activity from the prior year.

Your request to us is to vote to destroy our state’s, and New Future’s clients’, future, for the sake of getting a little bit more (which my colleagues fought for) from some parts of the budget, while others, such as developmental disability and the aged, see larger cuts or fall further behind inflation, and yet others, such as Expanded Medicaid and women’s reproductive health, are threatened with extinction.

Rep Susan Almy, House Ways and Means