Foster’s Daily Democrat, a Seacoast newspaper, had a headline on Wednesday that read, "N.H. Senate gets it right from the very get-go."
The article that followed was about Senate Bill 1, which I sponsored with 20 Senate and five House co-sponsors including Representative Jim Grenier (Lempster). With some rather harsh words about the direction of the House and "in-house squabbling," the editorial praised the Senate saying "the Senate has hit the ground running with productive legislation …"
I sponsored the bill in 2007 that created the state’s research and development tax credit. It is a program capped at $1 million annually with no company able to receive more than $50 thousand in tax credits.
Governor Lynch asked me last year to try to pass a bill to increase the overall cap from $1 million to $2 million. My efforts initially had great success. The bill was unanimously approved by the Senate Ways and Means Committee, and it sailed through, 24-0, on a roll call vote on the Senate floor. And there was strong support in the House, but in the end the House added a non-germane amendment relative to women’s health. The Senate could not accept that amendment and the effort to double the R&D tax credit died.
The research and development tax credit is a big deal. After the bill was heard and passed out the Senate Ways and Means Committee on Tuesday on a 5-0 vote, I was interviewed by a TV station and three radio stations. One interviewer asked me about the "shenanigans" that killed the bill last year. I said shenanigans was her term, not mine, and I felt Senators now are very focused on critically important issues dealing with job creation and economic development. That is essentially what Foster’s said, too.
What is the R&D tax credit program? Companies that are creating jobs in the research and development arena can apply for credit against their business profits and business enterprise taxes. There are similar laws in 42 other states, including all New England states, and there is a federal program, too.
The key is that research and development are economic drivers. Jobs in the research and development fields pay an average of $75,000, according to Fred Kocher, President of the New Hampshire High Tech Council. That is 75 percent above other industry sectors, he says. There are 49,000 NH jobs tied to this sector and one-third of our exports to other countries are from products made by companies dependent upon research and development.
Governor Hassan campaigned on doubling the tax credit last fall and provided a letter of support to the Ways and Means Committee. In a press release after the Ways and Committee vote she applauded the committee’s decision.
The Nashua Telegraph editorialized: the R&D tax credit bill "… deserves strong bipartisan support – without any last-minute political gimmicks – all the way to the Governor’s desk."
As the bill’s sponsor, I could not agree more. This bill is Senate Bill 1 for a reason. The Senate majority with the support of the minority and the Governor are demonstrating that we arestarting off the session by working together … acting in the best interests of the people of New Hampshire. SB 1 will be on the Senate floor on Thursday.
No one will be surprised when I let readers know that from time to time government makes mistakes. This time it was the Department of Education.
The state annually sends $578 million to municipalities for adequate education grants. Communities also collect and use the statewide property tax they collect for local education costs to the tune of $363 million. Add those numbers together and you get the total the state directs to municipalities for adequate education grants. The Department of Education calculates how much money is to go to each community.
The plan in the current biennium was that no town or city would receive less state education aid than they had in the last year of the prior biennium. Municipalities planned their budgets, got voter approvals and set their tax rates based on level funding from the state. A calculating error at DOE, however, created a reduced allocation of $3.4 million affecting 77 communities.
For the city of Lebanon, for example, the shortfall is $316,175. Other area communities impacted include Acworth ($10,581), Charlestown ($19,627), Cornish ($28,452), Croydon ($3,592), Goshen ($5,423), Newport ($28,707), Unity ($9,839) and Weare ($26,214).
In a hearing on Senate Bill 40, it was referred to as a "quick fix" for a "simple mistake."
SB 40, introduced by Senator Molly Kelly (Keene) with nearly 20 co-sponsors, will distribute the $3.4 million that the 77 municipalities were losing and make them whole.
The fiscal note from the DOE explained that the $3.4 million, when spent, will bring the total state spending for adequacy grants to $578 million as intended in the current budget noting that "… the costs of this bill could be absorbed within the Department’s existing budget and would not require an additional appropriation."
Given that this quick fix to a simple mistake will not require a new appropriation made it easy for the Senate Finance Committee to vote unanimously to recommend passage to the full Senate. If an appropriation of new money had been required, there might have been another story. Legislators like quick and easy fixes like SB 40.