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GOP House Members Propose Tax Cut Package, Democrats Balk

House GOP members say their new plan to cut taxes will help Granite State families thrive. Democrats denounced the tax cut plan as a $350 million corporate giveaway.

Familiar battle lines were drawn in Concord on Tuesday when Rep. Joe Sweeney (R-Salem) presented the GOP’s Consumer Tax Relief Act to the House Ways and Means Committee, calling it a “beacon of hope” for New Hampshire’s struggling businesses and communities.

“(This is) a crucial piece of legislation that not only reflects our commitment to fiscal responsibility but also addresses the pressing needs of Granite Staters in these challenging economic times,” Sweeney said. “Month after month, Granite Staters are grappling with the rising expenses that are stretching their budgets to the breaking point. In these times, when factors beyond our control are making life harder for our people, it is imperative that we take decisive action to provide relief where we can. One of the most effective ways we can do this is by cutting taxes here in New Hampshire, and that is precisely what the Consumer Tax Relief Act aims to achieve.”

The bill reduces the Business Profits Tax rate by 0.1 percent a year from 7.5 percent to 7 percent by 2030. It takes a similar approach to the Business Enterprise Tax rate, lowering it from 0.55 percent to 0.35 percent over the same period. It also cuts the Meals and Rooms Tax rate from 8.5 percent to 6.0 percent by Fiscal Year 2027.

And the proposal would also phase out the Communications Services Tax Granite Staters pay on their “two-way communication services” (wireless services and cellphones), which are currently taxed at seven percent. Under Sweeney’s proposal, the tax would be reduced over time and eventually eliminated by 2027.

House Democrats released a statement Tuesday claiming the tax cuts only benefit “multinational corporations” and would lead to defunding critical services like the Department of Safety, the Veterans Homes, Child Protective Services, and Community Colleges. 

Rep. Susan Almy (D-Lebanon) pushed Sweeney about the economic impacts, saying the tax cuts would be a disaster for state government agencies that rely on the funding.

“Do you understand what this does to the state government, which is suffering from the same inflation everybody else is?” Almy said.

The tax cuts would have a net positive impact for everyone, Sweeney countered. Cutting the business taxes would lead to more business investment and economic growth. Eliminating the Community Services Tax and cutting the Rooms and Meals tax will make New Hampshire more competitive with Massachusetts and foster more economic activity. Overall, the cuts will help generate more tax revenue for the state by boosting economic activity, he said.

“We’ve seen successful tax cuts in New Hampshire increase revenues,” Sweeney said.

New Hampshire’s GOP-controlled legislature already cut business taxes, and it is in the process of phasing out the state’s last remaining income tax — a tax on interest and dividends income. Sen. Dan Innis (R-Bradford), who led the charge to end the interest and dividends tax, wants caution exercised with any tax cut proposals.

“We have to be careful this year with what we want to do,” Innis said.

New Hampshire’s generally strong economy is showing some soft spots, Innis warned. Revenue may not be where it was a few years ago and there are early signs that could be trouble. For example, the real estate transfer tax might be lower than in previous years due to the restrictive housing market, he said.

New Hampshire weathered the economic turbulence created by the COVID pandemic, coming through with higher than anticipated revenues and a healthy rainy day fund, Innis said. Voters expect Republicans to be responsible with their money.

“I support cutting taxes where possible, but it’s a balancing act,” Innis said.

Sometimes, that means returning taxpayer money to help spur economic activity, and sometimes, that is deferring spending on big-ticket projects, Innis said. A $40 million proposal for municipal roads and bridges may need to wait, he said, especially after the state provided funding in the last session.

“We want to provide that support if we can,” he said. 

Packard: I Did Nothing Wrong in Merner Case

House Speaker Sherman Packard said he did nothing wrong in his handling of the case of Troy Merner, the former state House member charged with illegal voting and lying about his residency. And, he told reporters Wednesday, he is done talking about the topic.

Packard (R-Londonderry) met with a small group of reporters to clear the air, set the record straight, and end the discussion about what he did and did not do when he first learned Merner did not live in his Lancaster district.

“We had to let the process play out since it was under investigation by the (New Hampshire Department of Justice,)” Packard said. “I never talked to Troy Merner the whole time about his residency.”

Saying it would be the last time he planned to talk about Merner, Packard often sounded defensive during the meeting with NHPR, the Union Leader, and NHJournal, saying he could not have taken action when his office learned last December that Merner’s residency was under investigation by the New Hampshire Attorney General’s Office.

“Do what? What would you have me do? Get in the middle of an investigation? That could be criminal. Which is what it turned out to be,” Packard said. “If I had gotten involved in it and screwed up the investigation, you guys would probably be jumping all over me for ‘Why did you get involved’… I lose no matter what the hell I do.”

The New Hampshire Attorney General’s Office charged Merner, 63, last month on counts of wrongful voting, theft by deception, and unsworn falsification following its investigation. Merner is scheduled to be arraigned on Thursday, Dec. 28 in Coos County Superior Court. 

Packard’s meeting on Wednesday was an attempt to put an end to the critical news stories that dogged his office since the news broke.

“We tried to put this to bed, and every time we try and put it to bed, somebody puts a report out or something of that nature and blows the whole thing up again,” Packard said.

Packard blamed the media and partisan politics for giving life to the controversy and not anything he did or did not do.

“Would this [interest in the Merner story] have happened if we or the other party had a 50-vote majority? Probably not. Let’s be realistic; there’s a lot of politics involved in this right now,” Packard said.

According to documents so far released in the case, the Attorney General’s Office emailed Terry Pfaff — Chief Operating Officer of the New Hampshire legislature — on Dec. 6, 2022, one day before the House Organization Day. The email alerted House authorities to questions about Merner’s living situation and the ongoing investigation. A Packard staffer contacted Merner soon after receiving that email, and Merner denied he was no longer a Lancaster resident.

At that point, according to Packard, he decided to wait for the attorney general.

“We didn’t jump into any type of investigation; we took the man at his word. We had no reason not to, regardless of what the investigation said, because it wasn’t finished,” Packard said. 

Merner, a member of the Lancaster select board, allegedly moved out of Lancaster before he was elected to the House last November. According to court records, Merner considered his Lancaster office, post office box, and intent to eventually move back enough to establish his residency in the district despite the fact he was actually living in Carroll with his wife.

Deputy Speaker Rep. Steve Smith (R-Charlestown) played wingman to Packard at Wednesday’s press conference, explaining that no one made a formal complaint for Packard to act on and brought proof that Merner was not a Lancaster resident to the speaker.

“Anybody could have brought a complaint, and nobody did,” Smith said.

Without a complaint, Smith said that Packard could not act, adding that the Speaker’s Office does not generally investigate alleged misdeeds, nor does it conduct surveillance on members.

“The Speaker’s Office has a chief of staff, a deputy chief of staff, and … a communications director. We’re not going to deploy them to stake people out,” Smith said. “We don’t have staff or resources for that based on a rumor.”

Merner finally resigned from the House in September aw the attorney general’s investigation neared conclusion. At that point, the Department of Justice provided Packard with proof Merner was not a Lancaster resident. Packard followed up on that information by pushing Merner to step down.

“Once proof was given to us by the DOJ, we acted immediately,” Packard said.

Even if Packard got involved, past House precedent showed nothing would have happened, Packard and Smith argued. They pointed to a similar controversy from 1990, when it was learned Democratic Rep. Cynthia McGovern did not live in her Portsmouth district but instead lived in Hampton. 

Then-Speaker Steve Shurtleff (D-Penacook) appointed a committee to investigate McGovern’s residency, which took years to bring a resolution ousting McGovern to the floor. Despite it being a clear case of a representative living outside their district, the House voted down a 1992 resolution to boot McGovern from her seat.

“If we did investigate, what would have happened? It would have been really hard to find any conclusion other than the 1992 committee report that saw something just like this,” Smith said.

Is Packard worried about accusations from Democrats that he mishandled the Merner situation or the impact of this incident on his speakership going forward?

“I’ve been in politics a long time. I can’t control what everybody thinks,” Packard said.

NH Dems ‘Nuke’ Parents Rights Legislation

Legislation about behavior at school came down to a matter of attendance at the New Hampshire House on Thursday.

The Parents Bill of Rights (SB 272) was “indefinitely postponed” by a vote of 195-190, meaning that the topic is dead under House rules for the rest of the current two-year legislative session.

“They completely nuked the bill,” said Rep. Erica Layon (R-Derry), a parental rights supporter. “It would take a two-thirds majority to bring it back, and that won’t happen.”

Polls show Granite State voters — and parents in particular — support the legislation, which would prevent school employees from keeping information about a student’s on-campus behavior secret from parents who ask about their own children. Because that includes behavior regarding sex and gender, Democrats have attempted to label the bill anti-LGBT, arguing that parents are too dangerous to be allowed to have this information about their children.

A handful of absences among GOP members and near-perfect attendance by Democrats in the closely-divided House left Republicans without a functioning majority. When Republicans began defecting to add amendments to the Senate bill, the battle was lost.

Majority Leader Jason Osborne (R-Auburn) drew equal boos and cheers as he made an angry statement about the vote from the House well.

“For the next two years, parents will have to continue to accept that school is a mysterious and secretive black box where they deposit their children. Who knows what will happen inside that box, and who knows what will come out the other side?” Osborne said. “By indefinitely postponing this bill, parents will have no choice but to avail themselves of the wildly successful Education Freedom Accounts.”

The writing was on the wall early in the day when Rep. Mike Bordes (R-Laconia) gave cover to Republican defectors with an amendment altering the bill so as to remove references to LGBTQ identities and remove the requirement that schools not lie to parents. Several other Democratic-sponsored amendments passed as well, with the net effect of essentially gutting the bill. 

Supporter Rep. Joe Sweeney (R-Salem) tried and failed to have the bill tabled, which would have meant it could be brought back in some form later in the current legislative session.

“We should not be cutting our legs off to continue to have this discussion,” Sweeney said. 

But the die was cast and, with the help of Republican Reps. David Bickford (R-New Durham) and Joseph Guthrie (R-Hampstead), Democrats notched a major win.

House Speaker Sherman Packard (R-Londonderry) said the state GOP will continue pushing for parents’ rights.

“I am disheartened House Democrats chose institutions over New Hampshire parents today,” Packard said in a statement. “They chose secrets over parent-involved solutions. They chose to ignore the majority of New Hampshire parents who made it clear they were looking for legislative support to help protect their rights and their children.”

Senate Republicans called on Gov. Chris Sununu to issue an executive order setting to affirm parental rights, saying Democrats have betrayed families.

“The decision by Democrats to block this important bill is a direct assault on parental rights and a clear indication of their misguided priorities. By denying parents the opportunity to exercise their inherent authority, Democrats have undermined the very fabric of our society, where the family unit and parental involvement play an essential role in the upbringing and development of our children,” Senate Republicans said in a statement.

“We urge Gov. Sununu to take a stand for Granite State parents and issue an executive order to affirm the rights they rightly deserve.”

Sununu did not respond to a request for comment.

Rep. Alissandra Rodrigues Murray (D-Manchester) spent time hugging and chatting with 603Equality founder Linds Jakows, who lobbied hard against the legislation. Jakows even offered a plane ticket to fly a vacationing Democrat from Florida so he could vote against the bill.

Asked to comment on the victory, Murray replied, “I don’t talk to New Hampshire Journal.”  

Rep. Gerri Cannon (D-Somersworth), who identifies as a woman, understands parental concerns about kids’ behavior at school. Cannon agreed parents should be able to know what’s in the curriculum and is being taught in classrooms, but added concern for the safety of LGBTQ children is paramount.

“If they don’t have the right to be themselves, it can put them at risk,” Cannon said.

Cannon was echoing the message New Hampshire Democrats have made the center of their opposition to parental rights: Parents are potentially too dangerous to the lives and safety of their own children to be given the same information about their kids that school officials have.

Enough Republicans agreed with Cannon and the rest of the Democrats to kill the bill.

“I think there are some people on the Republican side who support the rights of children just like any person, and there are people who understand there is the potential for harm,” Cannon said.

Even with the bill knocked out for the next two years, the parents’ rights issue isn’t going away. Shannon McGinley, executive director of the pro-family advocacy group Cornerstone Action, said parents let down by their lawmakers need to get active.

“As the House will not act, the next step is to fight this battle on the local level. All we need is for parents to be just as fearlessly, consistently engaged with their local school boards as progressive activists are,” McGinley said. “If you are too afraid of controversy to speak up, then the cultural left will always win by default.

“But if one New Hampshire school board will stand up to the intimidation and cynical legalese of these groups, then other school boards could fall like dominoes.”