State of the State
1:46 pm
Tue January 31, 2012

Economic Themes Dominate NH State Of The State Address

Today marked Governor John Lynch's last State of the State address. And, as one might expect during a slow trudge toward recovery, the bulk of Lynch focused either directly or indirectly on the economy. Some of the key themes included issues that we've covered or put on the Watch List of our Ultimate Legislative Guide. We've singled-out some of Lynch's key economic comments below.

But before we cut to the highlights reel, we couldn't resist visualizing the speech's themes in a word cloud. And, as one might expect from the Governor whose signature line is, "We live in the greatest state in the greatest country in the world," the words "New Hampshire" and "people" dominate the illustration.

State Of The State: The Economic Highlights

Jobs and Manufacturing:

"Manufacturing creates good-paying jobs that help families build better lives. But manufacturing, like every industry today, demands workers with new, more advanced skills. That is why we are investing in building the workforce to meet the needs of today's manufacturing companies.

Albany International, a nearly billion-dollar company, could have located anywhere in the world, but its leaders chose New Hampshire. To ensure Albany has the workforce it needs, we're partnering with the company to create an advanced composites training program at the Great Bay Community College. That is one of the reasons why Albany is bringing hundreds of jobs to the City of Rochester.

As part of our efforts to get people back to work, we launched New Hampshire Working. This program has already helped avert the layoffs of more than 1,200 workers. It has helped companies hire hundreds of people by allowing up to six weeks of on-the-job training for people collecting unemployment. And this fall, we launched its final component, which is helping unemployed workers assess and upgrade their job skills."

Education Funding, Tuition And the Educated Workforce:

"To compete in the future, New Hampshire will need more workers with backgrounds in science and engineering, technology and math. That's why so many businesses have joined with programs like FIRST Robotics to inspire students to pursue careers in these fields.

Many of those jobs will require higher education, which is why we must make it financially possible for more students to go to college. The most recent budget reduced state funding to our public colleges and universities by half. This is exactly the type of shortsighted reduction that undermines our economic strategy and jeopardizes our vitality for years to come.

That reduction hurt New Hampshire students and families struggling to pay tuition. Some students may not be able to afford college at all. There may be fewer spaces for New Hampshire students at our own colleges.

These cuts hurt businesses trying to grow in New Hampshire – and send the wrong signal to the companies we are trying to attract. An educated workforce is the core of our state's successful economic development strategy. For our economic future, we must make it a priority to restore funding for higher education."

Expanded Gaming:

"As lawmakers, we have a responsibility to think of the long-term consequences of our actions, that is why I oppose expanded gambling.

New Hampshire has developed a brand that has led to our economic success.

I do not believe that the monetary benefits of expanded gambling outweigh the risks that it poses to New Hampshire's quality of life, our existing businesses and workers, and our economic future. That is why I will veto legislation allowing casinos in New Hampshire."

Northern Pass And Eminent Domain:

"One of the biggest issues facing our state and our environment is the proposal for the Northern Pass. I support bringing more renewable power to our state. It is in our long-term interests to diversify our power sources, and we should not dismiss out of hand the idea of hydropower from Canada.

But the proponents of Northern Pass need to listen better. This project cannot happen without local support. And it should not happen with eminent domain."

Housing And Foreclosure:

"Too many families lost their homes because of deceptive mortgage practices. But we have tied the hands of the Attorney General in protecting these consumers. Almost alone in the nation, because of a change in law a decade ago, our Attorney General lacks the authority to prosecute unfair and deceptive trade practices in industries like banking.

The Executive Council and I have spent a lot of time looking at this issue. We stand united in calling on the legislature to restore to the Attorney General the power to protect consumers wronged by abusive mortgage practices.

Helping those hurt by the mortgage crisis is an important step toward economic recovery, and we need to act now. "

Labor:

"Sadly, it has become too commonplace to attack public employees, and that needs to stop.

In these hard times, our state employees, our teachers, our firefighters and police officers, are working harder than ever to provide good services, to educate the next generation, to keep us safe. Join me in thanking those who serve all of us.

I respect the contributions of all of our workers, and I will never take away their right to organize."

Taxes:

As we look at the current fiscal year, 2012, there are some promising signs. In addition to carrying forward a surplus, business taxes, which are the state's biggest revenue source, are running 6.4 percent ahead of last year.

But there are challenges as well.

Starting with the $14 million deficit the legislature built into its budget for 2012.

The 10-cent cut in the tobacco tax has wiped out much of the gains in business tax revenues. Already, tobacco revenues are running $13 million below last year.*

...

I am proud that New Hampshire has among the lowest state taxes per capita in the nation. I have been and remain committed to vetoing an income or a sales tax.

There are tax reductions that can spur job growth here in New Hampshire. Innovative companies create jobs and lay the foundation for a stronger future for our state. Five years ago, we put in place a research-and-development tax credit to attract companies to create the products of the future here in New Hampshire.

This year, I am proposing we double the research-and-development tax credit.

This is a tax credit that works to help create jobs; the same cannot be said of the cut in the tobacco tax.

The cut in the tobacco tax was nonsensical. That money would have been better spent on our community college and university systems, for example. We should roll it back, and use the revenue to invest in our economic future."

Hospital Medicaid Dispute:

"As a result of a federal audit of the 2004 uncompensated care program for hospitals, the federal government will reduce its Medicaid payments to New Hampshire by $35 million over the next three years. Through strong management and slowing caseload growth, the Department of Health and Human Services has absorbed this year's federal reductions without additional program cuts.

The current budget dramatically reduced uncompensated care payments to hospitals. As a result, hospitals have been challenging current and past Medicaid Enhancement Tax payments. We have resolved the major issues with the federal government, and we expect the hospitals to now meet their obligations.

But the legislature must also consider how to repair this fractured relationship with our major health care providers.

With the 2011 surplus, and assuming the hospitals pay the taxes they owe, we should be able to end fiscal year 2012 balanced. That's my goal because that is in the best long-term interests of New Hampshire."

Interstate 93:

"With the available funding, the Interstate 93 widening will sputter to a dead stop in Windham. Delaying this project hurts our citizens who must commute on this road every day. It hurts the businesses that depend on Interstate 93 to transport goods. It hurts our tourism industry. And it undercuts the economic development of land that would be opened with a new Exit 4a.

Right now, bids for road construction projects are coming in nearly 10 percent below estimates. The cost of capital is at an all-time low. And key permits will expire in 2020. Smart financial sense says we should be pushing forward with this project now, while it is less expensive.

Last year, I called on the legislature to come together to fund the expansion of Interstate 93. Not only did the Legislature not act on Interstate 93 funding, it cut overall highway fund revenue by $90 million.

Words alone will not raise the $365 million needed to complete this project. I am willing to put reasonable options on the table. I am asking the legislature to do so as well. If we come together and show the necessary political will, we can complete the widening of Interstate 93 through Manchester in just four years. The people of New Hampshire are waiting.

We can and we should finish widening Interstate 93 by 2016."

*In the interest of keeping our theme highlights as clear as possible, while maintaining the integrity of Governor Lynch's words, we condensed the tax comments. The governor's comments on the state's Medicaid dispute with the large hospitals would originally have been in our Tax section, between the lines "Already, tobacco revenues are running $13 million below last year," and "I am proud that New Hampshire has among the lowest state taxes per capita in the nation. I have been and remain committed to vetoing an income or a sales tax."

Copyright 2012 StateImpact New Hampshire. To see more, visit http://stateimpact.npr.org/new-hampshire/.