RECENTLY, a series of pieces have been released by Senate President Chuck Morse and Senate Majority Leader Jeb Bradley expounding on the virtues of the Republican budget passed earlier this summer. The budget, wrought with divisive policy issues, was signed by Governor Chris Sununu in a private ceremony with little fanfare and a glaring lack of celebration from the corner office at the time of its passage.
In each letter, the Republican leadership pays particular attention to their perceived victory in lowering taxes. While it is certainly the job of the majority party to congratulate their members on the passage of a budget, no matter the member’s level of contribution beyond a surface level party vote, it is difficult to read these pieces without wondering how much good will actually come to the people of New Hampshire, and how much is simply feel-good rhetoric.
In each of the letters, the Republican leadership mentions sending money back to cities and towns via a system of revenue distribution from the meals and rooms tax. While there is certainly nothing wrong with wanting more money to go back to our municipalities, particularly as they work to avoid the higher property taxes created by the Republican budget, the method is inherently flawed. For example, this budget lowers the meals and rooms tax, thereby reducing the total possible amount that could be sent back to our cities and towns.
What does this mean in practicality? Let’s say that a diner goes and purchases a $10 BLT for lunch. Thanks to the Republican Party, they may save anywhere between 8 and 10 cents on that BLT. The server who took their order on the other hand may be looking at a smaller tip due to the reduced total cost of the meal. Combine that with the legislation sponsored by Senator Bradley and passed by the Republican Senate and House freezing the tipped minimum wage and thousands of Granite State workers will be looking at reduced take home pay with little hope for a raise. The restaurant selling that BLT will also be pulling in smaller commissions made from the decreased meals and rooms tax and less money will be available to be sent back to our municipalities.
In contrast, Senate Democrats put forward two alternative, complementary proposals that would have put more money back in the pockets of our restaurant and lodging industries while ensuring property tax relief.
First, Senator Cindy Rosenwald introduced the Restaurant Relief Act of 2021, which would have made a temporary change to the operator compensation of the meals and rooms tax by increasing commission from 3% to 5%. That change represented millions in direct relief to our hardest hit industries following one of the most challenging economic years in our history. Despite the policy receiving a vote of 22-2 on the Senate floor before being tabled for inclusion in the budget process, Republicans blocked the measure.
Second, I was proud to introduce the Property Tax Relief Act of 2021 which would have appropriated $40 million to the state treasurer over the course of the biennium for the purpose of providing municipal aid grants to New Hampshire’s cities and towns, at least 60% of which would have had to have been used for local property tax reductions. To be completely clear, this was the only policy put forward during the budget process that mandated property tax relief. When brought up in committee, Republicans refused to even take up my proposal for discussion. While my Republican colleagues will undoubtedly argue that the revenue distribution means property tax relief, there is nothing dictating how the funds will be used. There is absolutely no guarantee of lowered property taxes.
There is no argument that lowering the meals and rooms tax will make an excellent mailer come election season. However, beyond the rhetoric of campaign talking points, this permanent change negatively impacts state revenues in the long term while actively taking money away from our hardest hit industries. As we have seen time and again, Republicans have chosen to prioritize unnecessary tax cuts that will only benefit the wealthy while actively blocking any attempt to create a more equitable economy for all Granite Staters.