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U.S. Sens. Maggie Hassan and Jeanne Shaheen’s town hall-style meeting on Friday with their New Hampshire constituents was mostly a warm welcome back to the state. Unlike many of their Republican colleagues who have dealt with protesters, shouting, and many interruptions in their town halls during Congress’ recess week, Hassan and Shaheen received very few interruptions during their question-and-answer session, receiving mainly applause during the hour-long event.

While the positive feedback from the audience showed general approval of their job so far in the Senate, the town hall also revealed that Hassan and Shaheen aren’t some of President Donald Trump’s biggest opponents in the Democratic Party.

While the two senators have made it clear that they do not approve of many policies and much of the rhetoric coming from the Trump administration, they have been more bipartisan in their approach to Trump than others.

For example, Hassan and Shaheen have both approved of seven of his Cabinet nominations and opposed seven of them. That puts them on the lower end of “no” votes in the Democratic Party, with only five Democrats and one Independent who caucuses with the Democrats having fewer “no” votes.

Senators in states that Trump won or who are expected to face tough reelections have fewer “no” votes, including Sens. Joe Manchin of West Virginia, Heidi Heitkamp of North Dakota, Claire McCaskill of Missouri, and Independent Angus King of Maine, Joe Donnelly of Indiana, and Mark Warner of Virginia. Most senators have eight or nine “no” votes for Trump’s nominees, with potential 2020 Democratic-presidential hopefuls disapproving of 12 or 11 of his appointments, including Sens. Kristen Gillibrand of New York, Cory Booker of New Jersey, Elizabeth Warren of Massachusetts, and Independent Bernie Sanders of Vermont, who caucuses with Democrats.

While Hassan and Shaheen’s cabinet votes weren’t the main focus of Friday’s town hall, their position on Trump’s Supreme Court nominee, Neil Gorsuch, received the biggest disapproval.

Both Democrats rejected the idea of blocking a hearing for Gorsuch, resulting in audible boos and shouts of “no” from the audience.

“It is not in our interest to deny a hearing to Neil Gorsuch,” Shaheen said. “That’s what’s prescribed under the Constitution. Let me tell you something. I’m not going to go out and say it’s wrong for them and then say that it’s right for us.”

Shaheen was alluding to Republican Senate leadership’s refusal last year to hold a hearing for former President Barack Obama’s nominee, Merrick Garland. Some Senate Democrats have previously stated they want to filibuster or block Trump’s nominee from ever getting a hearing, just like the GOP did to Garland.

Yet, neither senator said they have made a final decision yet on how they will vote for Gorsuch. His confirmation will require 60 votes, so some Democrats will have to cross party lines if he is to get the seat on the bench.

“I think it is absolutely appropriate and right for us to do our constitutional duty and have a hearing,” she said.

Hassan said she plans to meet with Gorsuch this week to discuss “the protection of civil rights for all Americans. In my view that includes the rights of the LGBT community. It includes the rights of women to make their own health care decisions.”

In addition to Hassan and Shaheen’s middle-of-the-road approach to the Supreme Court nominee, they have also not gone to the same extremes as other Senate Democrats when it comes to Trump and Russia.

“I never thought that I’d begin my tenure having to stand up to a president whose conflicts of interest and whose campaign and administration’s involvement with Russia would cause so many questions,” Hassan said. “I also think that it is concerning that a president who is so tough on our allies seems so soft on Russia. I think that raises real questions.”

Hassan and Shaheen have joined several Democrats who have called for an independent commission investigation of possible Trump administration ties to, and communication with, Russian officials, in addition to possible Russian interference in the 2016 presidential election. Several high-profile Republicans, including Sens. John McCain of Arizona and Lindsey Graham of South Carolina, also said they support similar measures.

“The American people need to know what happened here, and then we need to take appropriate action,” Shaheen said.

However, Hassan and Shaheen didn’t go as far as other Democrats who have publicly talked about the possibility of impeaching Trump.

Hassan told WMUR after the town hall that impeachment talk was “premature,” yet restated her support for an independent investigation into Trump’s ties to Russia.

“I think it’s really important that we investigate concerns we’ve heard about connections to Russia in the Trump administration, and I think it’s very important that we have a bipartisan commission for the same reason,” she said.

It makes sense for Hassan and Shaheen to take a more bipartisan approach to Trump given the political climate in New Hampshire.

Democratic nominee Hillary Clinton won the state over Trump by only three-tenths of a percent — 46.8 to 46.5 percent. Hassan’s victory over former GOP Sen. Kelly Ayotte was even narrower, winning only by 743 votes, and while the Granite State sent an entire Democratic delegation to Congress, the GOP won the majority in the Legislature and took back the corner office for the first time in 12 years. Many people call New Hampshire a “purple” state, since it usually swing back and forth between red and blue every election. Hassan and Shaheen can’t upset their base too much, but they also can’t alienate the independents and moderate Republicans in the state either.

Near the very end of the town hall, Shaheen and Hassan also said they would do what they can to address climate change. Yet, some in the room weren’t happy with what they saw, including one man who shouted that the two women were using plastic water bottles, instead of reusable ones.

Hassan stated she is willing to work with Republican senators, but not at the risk of undoing progress.

“There is a difference between constructive compromise and undermining the progress that we have made,” she said.

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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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