After the swearing in of Sunapee resident, Joe Mollica, as Chair of our state Liquor Commission, Governor Lynch came to my new office for an informal and unexpected end of year chat. It was a slow day at the State House given it was just two days before Christmas and a good opportunity for the two of us to catch up.
The Governor wanted to make sure I had read a recent article in the National Journal magazine about New Hampshire. The National Journal is a must read, highly respected publication for federal politicians and Washington policy makers. The article the Governor was referring to is titled "The First State, Presidential hopefuls, take heed: New Hampshire isn’t just a proving ground; it’s leading the nation out of recession."
The article is a guide for Presidential candidates coming to New Hampshire to see our economy as unusual and stronger and more resilient than other state economies. Now, if your family is suffering from unemployment, lost income or foreclosure of your home, it doesn’t matter whether you live in New Hampshire or Nevada or Georgia. It hurts … a brother-in-law of mine, a talented and proven engineer, has been out of work for 15 months.
But in looking at the comparative strengths of the New Hampshire economy overall, it is proving to be quite unique. The National Journal calls our economy "the highest-performing state economy in the nation." And quoting a Federal Reserve Bank of Philadelphia study, "no state has grown more in the last year than New Hampshire, and no state is poised to grow faster in the next six months."
New Hampshire lost a smaller share of our jobs than other states and we have recovered about half of the lost jobs. The National Journal points out New Hampshire’s "unemployment rate now sits at 5.4 percent; only sparsely populated Dakotas’ are lower."
And again, if you or a family member has just lost your job at the paper mill in Gorham or at the arms manufacturer in Rochester, these numbers mean nothing.
Many newly elected legislators believe there is an inherent problem in New Hampshire state policies that is holding back economic activity. Yet, again in comparison to other states, the New Hampshire tax structure, our regulatory environment and educational system seem to be all pluses.
Two additional factors key to the state’s recent economic growth stand out in the National Journal article. First, there is the importance to the economy of imported brainpower. Whether it is an entrepreneur moving here or an out-of-state University of New Hampshire graduate who decides to stay and seek his or her future here, they provide an influx of talent that helps fire our economy.
Growing up in a small town in New Hampshire, I can recall the families that had "moved in" as different from old timers which dominated the community. But even the old timers would have included my grandparents who had arrived from Scotland shortly after the turn of the last century. Always a state of immigrants, today less than half of the state’s residents were born here according to just released United State Census Bureau data.
The diversity of our economy has been a strength. We are not dependent upon one or two industries. That provides some balance and spreads risk within the economy. From the National Journal piece, "When the most recent recession hit, the overall New Hampshire economy - like many of the small – and medium sized businesses that dominate it – had already tacked toward sectors that were best poised to weather the downturn."
The new legislature should be cautious in looking for problems in the state’s economy. The first goal should be to do no damage. The National Journal article notes: Strangely, some economists say that one of the states that could stand to learn some things from the New Hampshire model is … New Hampshire."
Sometimes we need to learn from outsiders how we are doing and how we compare with other states. You can be sure many other Governors and state legislatures wish they had a state economy as strong and resilient as New Hampshire’s.
All this makes me feel optimistic about New Hampshire as we begin the New Year.
My optimism for the New Year also gives me the confidence to make a few New Year predictions.
The legislature will pass a balanced budget and it will be signed by Governor Lynch in time for the legislature to adjourn and for legislators to return home by June 30. That is our responsibility and we will do it.
The budget for the biennium beginning on July 1 will include no new taxes and no new fees. Revenue will come from taxes and fees that are on the books now, and hopefully, with a strengthening economy, income will rise to insure the state can meet the critical needs of our citizens.
Presidential politics is just around the corner. Candidates from the past and many new entries will put their toe in the waters of the New Hampshire first in the nation 2012 primary. New Hampshire, for a century, has provided a forum for campaigning and debate that has launched some into the White House. Many others have found it the end of the road for their Presidential aspirations.
All best wishes for a wonderful New Year!
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