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When Granite State politicians talk about the opioid crisis and drugs moving across the border, they’re talking about Mexico.

But sit down with law enforcement fighting the flood of fentanyl into New Hampshire, and their “southern border” is Massachusetts.

Specifically Lawrence, Mass.

The drugs smuggled across the Mexican border and sold to gangs in Lawrence, largely from the Dominican Republic, make up the vast majority of illegal drugs abused in New Hampshire, according to New Hampshire’s U.S. Attorney Jane Young and Paul Spera, the assistant special agent in charge for the DEA.

“Those organizations have a connection with Mexican cartels, and so they’re able to get bulk quantities, distribution level quantities, kilogram quantities of the drugs,” Spera said. “They’re the organizations. They’re the drug distribution networks that have direct connections to the Mexican cartels.”

Synthetic drugs, like fentanyl and methamphetamine, are cheaper, deadlier, and more abundant than anything on the streets in decades. Young, who oversaw drug prosecutions as New Hampshire’s deputy attorney general, said the drug market in Lawrence is having a more devastating impact on the Granite State than in the past.

“There wasn’t this sort of free market in the next state that we see now. And so as time has evolved, what we see now are a lot of people who can pool money amongst other people, whether friends or community and go down and get –what I would tell you, having done this for the bulk of my career — a staggering amount of drugs.”

United States Attorney Jane Young says drugs supplied by Mexican cartels are flooding New Hampshire streets.

It used to be big news when police seized a kilo of cocaine, Young said. That amount, about 2.2 pounds, can sell for between $25,000 and $30,000. Now, a kilo of fentanyl can be had for about $6,000.

Spera said the drugs start out as precursor chemicals shipped directly from China to Mexican cartels with ports on the Pacific coast. Those chemicals make their way north to factories in Mexican warehouses and similar buildings, where the drugs are manufactured. Cartels are out of the agriculture business and no longer worry about weather, blight, pests, or growing seasons. They can make the drugs year round.

Once produced, the drugs are typically packed into vehicles headed to the United States — hidden in produce trucks, or in secret compartments of passenger cars. Cartels generally use people with legitimate reasons to cross the border to get the drugs and money back and forth, he said.

On the East Coast, in New York and in New England, Dominican gangs control the trade. They sell at street level, and they can set up somewhat sophisticated schemes to move the drugs. These gangs have been known to operate a delivery service, with the equivalent of a customer service rep taking orders during set business hours over the phone and arranging drop offs throughout the day. Spera said the operator taking the calls can be in the U.S., but just as often that person is in the Dominican Republic.

The people the Lawrence gangs sell to are rarely other gangs or major dealers, according to Young. Even when buying a kilo of fentanyl or bulk methamphetamine, they aren’t budding kingpins and wannabe Walter Whites. Typically, they are addicts selling to support their own habits, Young said.

“Today, it’s a lot of individuals who, because of their addiction, can go into the Merrimack Valley, buy significant quantities of drugs, and come back and flood the street. I don’t think that there’s another word to say that. They can flood it into the street for much smaller amounts of money, but with much more deadly consequences,” Young said.

Fentanyl now fuels New Hampshire’s opioid epidemic, with hundreds of overdoses each year. The number of fatalities is declining somewhat this year, though Young suspects the lull is because of how normalized opioid addiction has become. Many people now carry Narcan, which can stop an opioid overdose death.

Narcan can save lives. But without treatment, it also leaves people mired in the throes of prolonged addiction and misery, Young said.

“That is where we are now. Horrific.”

Spera worries about the growing market for methamphetamine. The meth coming in from Mexico is as much as 98 percent pure.

“It’s an absolute issue that’s coming into our state,” Spera said.

The amount of methamphetamine seized by the Manchester DEA office, which includes operations in neighboring states, more than doubled last year to 52 kilos. The drug is also linked to violence. Several officer-involved shootings in the past few years involved a meth user acting erratically and dangerously. The drug ratchets up the danger for communities and police, Spera said.

Spera’s worry is compounded by how openly the gangs operate. Recently, an undercover DEA agent stood on a Lawrence street corner waiting to meet a contact as part of an investigation. The agent had traded his typically clean-cut look for long hair, a scruffy beard, and street clothes. The kind of look that says, “I just got out of bed.” As he waited for the contact, a car pulled up, and the driver tossed out a bag containing a small amount of fentanyl and a card with a phone number.

“Let me know if you ever need anything,” the driver said before peeling off.

In August 2022, a Massachusetts mail shop represented by Hillary Clinton’s attorney dumped hundreds of thousands of dollars of illegal mailers into the New Hampshire GOP primary in the 2nd Congressional District. The mailers, which violated state and federal law, were part of a $44 million national Democratic strategy to interfere in GOP primaries.

More than 14 months later — and with the 2024 GOP primary season approaching — New Hampshire’s top cop has taken no action, even as Democrats eye the Republican primary for governor. And critics say if they can do it illegally and without consequence, why not?

The facts of the case aren’t in dispute. In the final weeks of the 2022 Republican primary in the 2nd Congressional District, voters were hit with a wave of political mailers promoting Bob Burns as the most Trump-friendly candidate in the race. The mailers also accused his mainstream GOP competitor, Keene Mayor George Hansel, of not supporting the former president — a key issue to Republican primary voters.

Anonymous campaign mailer touting Bob Burns, sent by a Democratic mail shop in Massachusetts.

The mailer worked. Hansel, viewed as the strongest Republican to take on U.S. Rep. Annie Kuster and endorsed by Gov. Chris Sununu, was defeated by underfunded MAGA candidate Burns. Kuster handily defeated Burns 56-44 percent in November.

However, as NHJournal reported at the time, those mailers were sent to GOP primary voters not by New Hampshire Republicans but by Reynolds DeWalt, a Democratic political mail shop based in New Bedford, Mass., that has printed products for Hillary Clinton and Bernie Sanders.

Voters had no way of knowing that because the illegal mailers had no disclosures of any kind, a clear violation of state and federal election laws.

Yet more than a year later, no charges have been filed, and no actions have been announced by New Hampshire Attorney General John Formella or any other law enforcement agency. And while the state Republican Party filed a complaint with the Federal Election Commission in September 2022, the agency declined to answer any questions about whether or not an investigation is even underway.

Granite State Republicans fear the lack of enforcement means even more illegal Democratic campaign material will pour into the 2024 primaries, particularly for governor.

Formella claims his office is actively investigating the mailers, telling WFEA radio host Drew Cline in a recent interview that he is on the job.

“That [case] remains under active investigation; I’ve spent a fair amount of time on it myself because I feel it’s important,” Formella said. “The challenge is when you’re trying to investigate across state lines, getting subpoenas domesticated, getting documents, getting people to sit for interviews, it takes time. My goal is to take the strongest action possible.”

One obstacle may be the mail shop’s legal counsel, notorious Democratic operative Marc Elias, who has worked for the Democratic National Committee since 2009 and also worked for the presidential campaigns for Vice President Kamala Harris. However, Elias is best known for helping his client, the Hillary Clinton 2016 campaign, fund the now-debunked “Steele Dossier” promoting the so-called “Russia Collusion” hoax.

Plus, any federal investigation would involve the Biden administration’s Department of Justice, which may lack motivation to take down political actors inside the president’s own party.

And then there is the Massachusetts problem.

Sources tell NHJournal that any New Hampshire investigation involving out-of-state political mischief by Bay State players would go through the office of progressive Massachusetts Attorney General Andrea Campbell. Campbell’s partisan activism is no secret; she is viewed as a rising star in the Democratic Party. The Massachusetts Attorney General’s Office is often used as a springboard for higher office. Current Democratic Gov. Maura Healey launched her gubernatorial campaign after winning her second term as attorney general.

Campbell’s ability to influence an investigation creates, at the very least, the appearance of a conflict of interest. Formella’s office declined to say what kind of cooperation it is getting from Massachusetts officials, if any. Campbell’s office did not respond to multiple requests for comment.

The Democratic Party’s strategy of promoting weak Republican candidates in GOP primaries in 2022 paid off, particularly in New Hampshire. In the 2nd District race, Burns spent less than $16,000 in primary ads, while the Democrats Serve PAC spent $562,000 boosting his candidacy to GOP voters.

In the U.S. Senate race, MAGA Republican Don Bolduc’s ad spend was an anemic $33,760. But Democrats spent more than $3 million helping him defeat former state Senate President Chuck Morse. Bolduc lost to the incumbent Democrat, Sen. Maggie Hassan, by nine points.

Burns has spoken publicly about entering the GOP gubernatorial primary, where Morse and former U.S. Sen. Kelly Ayotte are already running. Even if he doesn’t, it is possible a Trump win in the presidential primary contest would inspire a MAGA Republican to enter the race and represent the activist base of the party. And thanks to Democrats, that MAGA candidate might not need to raise a penny to mount a competitive race.

Thus far, the New Hampshire Attorney General’s Office has done nothing to prevent that. Instead, Formella is already hinting his office may take no action at all despite the clearly illegal conduct of the Democrats.

“My goal is to take the strongest action we can,” he told Cline. But he added that, “at a minimum, we will issue reports to the public about exactly what happened.”

With the tax filing deadline fast approaching, a new analysis finds New Hampshire residents have the lowest tax burden in New England and one of the lowest nationally.

Meanwhile, just across the line in Massachusetts, soaring taxes on top earners are sending them fleeing to low-tax states like Florida and, yes, New Hampshire.

The new WalletHub analysis uses a metric of income taxes, sales taxes, and property taxes to calculate overall tax burdens. New Hampshire has the third lowest overall tax burden, trailing just Alaska and Delaware. New Hampshire’s performance is even more impressive when compared to other states in the region. Three of the five states with the highest tax burden are in New England (Maine, Vermont, and Rhode Island).

New Hampshire is the only New England state not in the top 20 for tax burden.

State Senate Finance Committee Chairman James Gray (R-Rochester) said New Hampshire’s low taxes and efficient government are some of the reasons for the state’s economic success. “There’s an awful lot of people who choose New Hampshire because we are fiscally responsible with our money,” Gray said.

A different Wallethub analysis last week ranked New Hampshire number one for taxpayer return on investment.

The one glaring exception was property taxes. Granite State homeowners have the third highest property tax burden in the country, according to WalletHub, behind Maine and Vermont.

Gray said New Hampshire’s reliance on property tax to pay for services like education gives voters the most control over their money possible. He said that local control likely results in lower spending and taxes than if the decisions were all made in Concord.

“You have to have something to run a government by, and a lot of the things that we fund, especially schools, we pay for through a property tax,” Gray said. 

The effects of New Hampshire’s low taxes and efficient spending don’t end at the border. A new report from the Massachusetts Society of CPAs on the impact of the Bay State’s new “millionaire’s tax” — which raises the top state income tax rate to nine percent — says 82 percent of CPAs report they have high-income clients seriously considering relocating in the next 12 months. 

And tax-free New Hampshire is near the top of their list of potential destinations.

“Florida and New Hampshire are overwhelmingly the most popular choices for relocation,” the CPA report states. “While some may argue that a move to Florida is driven by a desire for better weather and a different lifestyle, the fact that the second most popular destination is New Hampshire suggests that people want to stay in the area but may be motivated instead by a lower cost of living, including a lower tax burden.

“Furthermore, New Hampshire is set to repeal its Interest and Dividends Tax by 2026, which would decide to relocate even more appealing.”

Granite State Democrats tried but failed to push through legislation reversing the repeal of the interest and dividends tax for people earning $50,000 or more per year.

New Hampshire already has the strongest economy in New England, with low unemployment and low poverty rates. The Live Free or Die state’s commitment to low taxes will help it stay in the pole position, according to Joseph Krupka, an accounting professor at Florida State University.

“Here is a simple answer, the lower state tax burden will drive the state economy. Corporations seek state tax incentives when developing long-term strategies for where to locate new facilities such as plants and offices,” Krupka said. “Reduced corporation and real estate tax burdens along with a favorable personal income tax for their employees are the two keys.”

Gray knows there are a lot of factors considered by business owners who want to relocate, from infrastructure and energy costs to the local labor supply. Some states even offer financial incentives that New Hampshire does not currently match. But, he said, New Hampshire will keep to its low-tax structure.

“That’s just the way we do it,” Gray said. 

In a Facebook post Thursday morning, two-term Massachusetts governor Deval Patrick made it official: He will not be running for president in 2020.

“After a lot of conversation, reflection and prayer, I’ve decided that a 2020 campaign for president is not for me. I’ve been overwhelmed by advice and encouragement from people from all over the country, known and unknown,” Patrick wrote.  “But knowing that the cruelty of our elections process would ultimately splash back on people whom Diane and I love, but who hadn’t signed up for the journey, was more than I could ask.”

In doing so, Patrick confirmed the suspicions of some doubters who questioned whether the famously thin-skinned governor was prepared for the rough-and-tumble of a national campaign–particularly one that might involve taking on Donald Trump. Patrick was known for angry outbursts over relatively mild media criticism and personal animosity against members of the press. As Jon Keller, the well-respected political reporter at Boston’s CBS affiliate put it in 2012:  “Deval Patrick has a lot of attributes, but thick skin is not one of them.”

Director of the Suffolk University Political Research Center David Paleologos tells NHJournal that Patrick was “one of ten strong Democrats who had a path to score Democratic Primary victories in the three early states and to ultimately take on President Trump.”  According to Paleologos, the immediate beneficiaries of his decision are his fellow New Englanders  Elizabeth Warren and Bernie Sanders, and African-American candidates, “especially Cory Booker.”

In his Facebook statement, Patrick said he believes “Democrats have a clear chance not just to win [people’s] votes but to win their respect and earn their help by showing up everywhere, engaging everyone, and making our case.”

“America feels more ready than usual for big answers to our big challenges. That’s an exciting moment that I hope we don’t miss. I hope to help in whatever way I can. It just won’t be as a candidate for president,” Patrick said.

When neighboring “Taxachusetts” was considering a hike in its already high income tax in 2013, many people in the Granite State welcomed the proposal.

“Welcome to New Hampshire!,” said Senate Majority Leader Jeb Bradley at the time. “We should be putting up billboards. We have long marketed New Hampshire’s attractiveness as a place to do business for precisely this reason.”

But recent research suggests that raising taxes and spending in one state can have substantial negative effects on people in neighboring states.

While border counties within a state that raises taxes are obviously affected by the change, about half the effect spills over to counties on the other side of the border, found Sam Peltzman, a researcher at the University of Chicago, in a study released last year.

Research suggests areas that rely on interstate business suffered in the wake of a 1 percent rise in a state’s taxes and spending. (Credit: University of Chicago)

Peltzman examined economies in neighboring states from 1975 to 2012. He measured employment levels, wages, and the number of businesses established after tax and spending policies were implemented. The results suggested that the economy of a border county shrank when its state’s taxes and spending increased, and local economies on the other side of the border were also impacted.

“The results in this paper tend to add weight to the view that larger state and local government is purchased at the cost of a smaller private sector,” Peltzman wrote in his study.

So why are two state’s economies, like Massachusetts and New Hampshire, so intertwined? Well, for many people who live in border cities and towns in the Granite State — Nashua, Londonderry, and Salem, to name a few — they commute everyday to the Bay State for work.

When Massachusetts was considering a bump in the income tax, many residents who lived in or near Nashua said they would feel the effects of it when they took home a smaller paycheck. If they take home a smaller paycheck, they have less money to put back into the economies of the towns where they live.

Even New Hampshire businesses near the border can feel the impact of tax changes in the state south of the border.

Massachusetts changed its sales tax to include a “tech tax,” a 6.25 percent sales tax on computer and software technology services, which went into effect in 2013. It was a short-lived tax, quickly being repealed by former Gov. Deval Patrick, but even New Hampshire businesses with a physical presence in Massachusetts that provided Bay State customers with services covered by the tax had to pay it. A “physical presence” could mean having one sales representative with a home office in Massachusetts, according to some interpretations of the law.

In 2014, the Bay State also made some changes to its corporate income tax that impacted some New Hampshire businesses. It applied to any service-based business that has Massachusetts customers, like law firms, medical providers, and consultants, or businesses that sell some intangible products used in Massachusetts like the licensing of software.

These companies now have to pay an 8 percent tax on the revenue derived from those Massachusetts clients. Before, a New Hampshire company’s revenues collected from Massachusetts would be used to calculate the business profits tax (BPT) owed to New Hampshire. But now, businesses are double taxed. A company still must count all of its revenue for New Hampshire’s BPT, but the revenue collected in Massachusetts needs to be counted and taxed by the Bay State.

It can be a complicated system and, sometimes, New Hampshire businesses don’t even know when they would need to pay Massachusetts taxes. In turn, some companies think twice about doing business or hiring out of state for fear of having to pay more money to another government, which could affect their bottom line.

“State tax structures can create cross-border issues in a number of ways, including positive economic development in bordering communities that are able to draw businesses and individuals into the state as well negative impacts from tax policy decisions that create adverse tax climates causing individuals and businesses to leave the state for a preferential neighboring state,” said Kathryn Michaelis, an attorney in the tax practice group at the Rath, Young and Pignatelli law firm in Concord.

It’s not all doom and gloom for New Hampshire residents and businesses paying Massachusetts taxes. Many Massachusetts residents cross the border because New Hampshire has historically one of the lowest tax rates on cigarettes in the region, a lower gas tax, no tax on liquor sales, and no sales tax. This strategy allows the state to net revenue on the sales, despite the absence of a tax, which makes it appealing to other businesses and consumers, and pumps economic activity into the cities and towns on the border.

At one point, Massachusetts tried to capitalize on the cross-border purchases by challenging in court that they should collect taxes from a store that sells tires to Massachusetts residents in New Hampshire. A court disagreed.

But New Hampshire still struggles economically on several fronts, including high electricity costs, expensive property taxes, and a high cost of doing business in the state. Both Massachusetts and New Hampshire employees get paid more than average American workers, driving up employers’ labor costs.

“While a favorable tax climate may draw in businesses to a bordering community, the state and local officials must always be careful to not offer tax incentives or subsidies or restructure the tax system in such a way that it creates too much of a cost burden on the locality or state in the long-run,” Michaelis told NH Journal. “Each state and local jurisdiction needs to find balance in retaining and recruiting business while ensuring that its revenue remains steady to support government services.”

New Hampshire worked hard in the 1980s and 1990s to have the “New Hampshire Advantage” where students would graduate school, go to college, and eventually return to raise families and work. People from Massachusetts, New York, and New Jersey moved to the state and businesses would have access to this cluster of highly educated and skilled workforce.

By the 2000s, positive net migration stopped, college graduates moved away, and New Hampshire’s business climate was not as diverse. Now, politicians are trying to figure out how to deal with a workplace shortage and make New Hampshire an attractive place for businesses.

One way the Republican-controlled State House sees on getting their advantage back is through right-to-work laws, which would prohibit public and private sector unions from charging non-members fees for negotiating on their behalf. If passed, New Hampshire would become the only state in the Northeast to have a right-to-work law.

The cross-border economic relationship is not unique to Massachusetts and New Hampshire. Illinois and Indiana have a similar relationship, with my many people leaving Illinois due to its high taxes. The same is true for New Jersey and Delaware, where a high gas tax in the Garden State could benefit Delaware, yet both have high property taxes. What tax policy is passed in one state could spill over into its neighboring states.

Carl Davis, research director for the Institute on Taxation and Economic Policy, said it can be difficult to isolate the taxes and determine if economic growth or hinderance is a result of an increase or decrease in taxes.

“It’s not cut and dry,” he told NH Journal. “It’s hard to look back and see if a state raised taxes because they have a poor economy or because of their taxes, their economy is doing well. There are always trade-offs.”

But for New Hampshire and Massachusetts, the economies and tax policies of the two states seem to be fairly linked for its residents, businesses, and communities.

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