By DAVE SOLOMON
IN WHAT MAY BE a sign of more perilous economic times ahead, states across the country are reporting declines in tax revenues, but not New Hampshire, which led the nation in revenue gains in the second quarter (April through June), according to a 50-state analysis published last week in The Hill.
Not surprisingly, the biggest declines were in energy-producing states, given the collapse in oil and gasoline prices.
But non-energy producing states also experienced dips, the Hill reported. Maine had a 15-percent revenue decline, while Illinois’s receipts dropped almost 11 percent.
There were 20 states reporting increased tax revenues, led by New Hampshire at 14 percent over the same quarter last year.
While The Hill cited tax cuts enacted last year in many states as the cause of the declines, business tax cuts in New Hampshire appear to have had the opposite effect, according to Republican leaders in the House and Senate.
“I am proud to see our state leading the way in revenue growth nationwide, bringing in more than $100 million in surplus funds this year, due in part to the first round of reductions to the business profits and business enterprise tax,” said Republican Majority Leader Sen. Jeb Bradley, R-Wolfeboro.
But Democratic State Sen. Dan Feltes says it makes no sense to attribute revenue growth in the second quarter to tax cuts that have only been in place since July.
“We were seventh best in the nation in our overall business tax climate the year prior to the business tax cuts, and we are currently seventh best in the nation this year, as ranked by the Tax Foundation,” he said. “These tax cuts were only in effect for a brief period of time, so the notion that they resulted in the increased revenue is false.”
Feltes says the Republican majority was too conservative in its revenue estimates, and that Democrats on the Ways and Means Committee pushed for a number closer to the reality the state is now experiencing, but did not prevail.
He said a bill will be introduced in the upcoming session to create the non-partisan office of Revenue Estimator, to keep the process from being politicized by either party.
The economic activity that is generating so much tax revenue has little to do with the incremental decreases in business profits and payroll taxes, according to Feltes, who credits the state’s private sector.
“Our business sector is working hard, generating economic activity,” he said. “A lot of credit goes to the private sector, our workers and our businesses. Some folks are inclined to take credit where it may not necessarily be due.” – See more at: http://www.unionleader.com/article/20161002/NEWS0604/160939900&template=mobileart#sthash.mnRUjEvd.dpuf
