By Reps. FRANK EDELBLUT and JR HOELL
For the Monitor
Wednesday, January 20, 2016
(Published in print: Wednesday, January 20, 2016)
Who doesn’t want a better job than the one they have today? Clearly, we all would. For that reason, the New Hampshire House of Representatives should be doing everything it can to create an environment where employers create great job opportunities for everyone in the Granite State.
Just this past week, General Electric announced that it was moving its corporate headquarters from Fairfield, Conn., to Boston. Why there? Why not to New Hampshire, a state where there is already a GE division making aircraft engine components? Why not make Hooksett GE’s corporate headquarters? After all, GE just spent $55 million improving the production capacity at this facility.
This site already employs more than 740 people, land is cheap compared to Boston and access to the site is easy as the location sits at the intersection of two major highways. This seems like the ideal location for a company’s headquarters, but alas, General Electric would then be subject to New Hampshire’s unfavorable tax environment.
In the end, why did GE choose Massachusetts over New Hampshire? Because New Hampshire is far harsher on businesses than even our neighboring states of Vermont and Massachusetts.
The Wall Street Journal stated in an article regarding the move that GE “publicly threatened its move in June, blaming a Connecticut budget deal that raised corporate taxes and what company officials described as an inhospitable business climate.”
Just like families, companies can easily pick up and move when they do not like the “neighborhood” or feel threatened. Companies can move to locations where they think it will be better for them or for their employees, and when companies leave, they also take the good quality jobs with them.
Our current business tax climate is driving companies away from New Hampshire. At this point, we have the highest business taxes in New England, and therefore companies are driven away from our state and not toward us. What happens when those companies set down roots in other states? We lose the opportunity for those current jobs as well as any additional good manufacturing or white-collar jobs as their businesses grow. Businesses bring jobs when they come, and it is the Legislature’s job to create an environment that entices companies to move here. We can do this by removing regulations and tax policies that discourage relocation to New Hampshire.
In December, a House Committee had a pro-economic-growth bill under consideration that corrects one of these unfriendly policies.
House Bill 668, a bill that had been debated over the summer and would have encouraged businesses to invest in equipment, computer software and other important capital assets, was defeated. Studies on the subject demonstrate that investments in these types of capital assets precedes hiring new employees, so of course there was keen interest in the bill. This week, we have a second chance to fix this policy by overturning the committee report.
This bill aligns the New Hampshire tax code closer to the federal tax code – 38 states already align their state policy to the federal policy in this area. Only 12 states – including New Hampshire – do not. All of our surrounding New England neighbors follow the federal policy, putting New Hampshire at a disadvantage when courting companies to move to, or stay, in New Hampshire.
The problem was that, at the time the Ways and Means Committee was finalizing its decision on the bill, Congress was sending mixed signals about whether to keep the federal policy in place or scuttle it with a significant reduction. As a result, Ways and Means opted to defeat House Bill 668 and leave the New Hampshire law alone.
On Dec. 17, after Ways and Means voted, Congress also acted. Not only did members renew the deduction, but they also made it permanent, something that had not been seen since 1987. This change that Congress made makes the current disadvantage even greater for New Hampshire.
On Wednesday, House Bill 668 will come up for a vote. We now have all the information we need to make a decision in support of jobs and economic growth. The federal uncertainty has been resolved and the right thing to do is to pass this important job-creating legislation for the people of New Hampshire.
(Rep. Frank Edelblut, a Republican, lives in Wilton. Rep. JR Hoell, a Republican, lives in Dunbarton.)