Some weeks there are single major events at the State House that draw everyone’s attention; other weeks there are interesting bits and pieces picked up from committee sessions and watching other action around the legislature that draw little attention.
Snow forced postponement of our regular Senate session last Wednesday. The Senate President, Peter Bragdon (Milford) moved it to a 30 minute window at noon on Thursday. The five bills before the Senate were routine and came to the floor in each case with unanimous support for passage from the committees where they had been heard.
Key for Unity and area residents was SB 24 which exempts the Unity School District from the current moratorium on school building aid. The bill passed with no dissenting votes and now moves on to the Senate Finance Committee for review of the bill’s financial implications for the state.
Legislators responsible for building a state budget for the next biennium are eager to learn what the Governor proposes. He will present his budget on February 15. Some legislators came forward last week with less than optimistic projections for revenues for the rest of this year and for the next biennium.
Actual revenues for the first seven months of the current fiscal year look pretty good. The goal was to take-in $981 million. Actual revenue was $974 million through the end of January making us short by $6.7 million, or less than one percent of projections made months ago. Even the slightest revenue growth from an expanding economy will relieve some budgetary problems down the road.
Still, there will be a major challenge given the built-in deficit projected, because of the lack of federal stimulus money that helped out in the last two years and new costs facing the state resulting from past policy decisions.
In the budget passed in June, 2009, there was one tax everyone agrees has hurt New Hampshire. It is the 10 percent tax on gambling winnings. If you win $2 on a scratch ticket, by law, you should be sending in 10 percent of your winnings to the state.
Serious gamblers who place bets by telephone at our pari-mutual facilities which have horse and dog racing simulcasting took their business to gambling operators in other states. One location, the Lodge at Belmont, closed their simulcasting betting resulting in the loss of 22 jobs. And the director of the lottery, Charlie McIntyre, suggested that, in part as a result of the gambling tax, lottery ticket buyers in Massachusetts are buying their tickets at home to avoid the tax on winnings.
There is a federal income tax on gambling winnings of $600 or more but unlike the New Hampshire tax federal law allows you to deduct the losses one incurs while gambling. That makes the federal tax much fairer than the New Hampshire tax. And with revenue of only $1.7 million so far this year, it is producing much less revenue than predicted.
Senate Bill 130 was before the Senate Ways and Means Committee last week. There was brief testimony with one amendment offered. Instead of repealing the gambling tax effective at the end of the current fiscal year, the amendment would make the repeal effective upon passage. The bill as amended was voted "ought to pass" and will go the Senate floor on Feb. 16 where it will certainly pass. Of the new taxes or tax increases in the budget, the tax on gambling is looked upon as a mistake.
The Senate Energy and Natural Resources Committee heard testimony on SB 22 which if passed would alter the regulation of small telephone companies to better allow them to compete with newer telecommunications providers. The representative from TDS, Tom Murray, produced a chart from 2009 showing that telephone companies like Fairpoint and TDS have 385,000 land lines serving residential and business customers in New Hampshire. Meanwhile, there were 1,125,000 wireless phones in service, and voice-over-internet (VOIP) and cable telecommunications providers have another 373,000 customers.
That means cell phones have 60 percent of the business and traditional phone companies and the new VOIP and cable companies split the other 40 percent. And in the two years since 2009 data was collected, one can be sure the traditional land line companies have slipped further in the number of lines in service.
How the world has changed. For decades AT&T and its subsidiary, New England Telephone, served most of New Hampshire with a monopoly in their service areas. Things were pretty straightforward. The phone company would provide service to every resident wishing to have a telephone and state regulators guaranteed the phone company a rate of return that covered costs and provided a profit.
Today, there is a great deal of competition. Fairpoint and TDS remain regulated to insure that the quality of service is maintained and that they are able to serve every customer in their area. For that, they get an authorized return. All this competition offers some people six or more telecommunications providers from which to choose when they want to purchase services. The new providers, including the wireless providers, are unregulated by the state.
State regulatory policies need to change to insure that customers have service options and competitive pricing. That means government will have to continue to reduce its role in recognition of the new realities of the marketplace.
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