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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. 

Hey, big spender! As New Hampshire’s economy booms, more people are going out to eat — and leaving some of the best tips in the country on the table.

A new report from Toast, a company that markets point-of-sales tablets for the restaurant industry, puts Granite State diners in fifth place when it comes to generous tipping, the highest in New England and tied with Ohio and West Virginia. New Hampshire residents average 20.6 percent tips on their total bills when they dine out or order in.

Tom Boucher, CEO of Great NH Restaurants, the company behind the Copper Door and other eateries, said his servers are definitely getting at least 20.6 percent. That is good news for the tipped employees who rely on the income, he said.

“We’re above [20.6 percent] for sure,” Boucher said. “Our tipped employees are making more than 20 percent.”

Servers have been seeing bigger tips as restaurant tabs have risen since the start of the COVID pandemic and surging inflation. Mike Somers, CEO and president of the New Hampshire Lodging and Restaurant Association, said industry costs have been climbing for the past few years. Food prices, energy prices, and labor costs are all higher, and they are impacting diners’ bills.

“Every time the menu prices increase servers would see the increase anyway,” Somers said.

But Somers said he also believes the pandemic changed people’s behavior when it comes to tipping. Customers gained a new appreciation for the service offered during COVID-19 and showed it with more generous tips. Somers added the trend has continued.

“People were tipping 20 percent or better as a general rule, and, anecdotally, folks maintained that tipping,” he said.

Not all the news is good, however. New Hampshire restaurants find themselves in a difficult moment, Somers noted. Inflation is still climbing and the labor supply remains tight. They are cutting into profit margins and pushing up menu prices even more. January’s surprisingly hot jobs market was driven in large part by the restaurant and hospitality industries, which added nearly 100,000 jobs in a single month. But the industry is still about 500,000 jobs below pre-pandemic levels and labor shortages remain.

So far, consumers are still spending — and tipping. But how long will that last?

Somers is cautiously optimistic.

“Our members were busier through the winter than we had anticipated. That’s very encouraging for spring and summer, which are typically our busiest seasons,” Somers said.

Boucher isn’t seeing any slowdown at his establishments. The New Hampshire economy is expanding, he said, especially in the southern portion of the state. 

“Our sales are robust at all locations,” he said.

Large developments in Salem, Nashua, Londonderry, and Bedford are bringing more people into the state, and those people are going out to eat, he said.

“People are feeling pretty bullish in southern New Hampshire,” Boucher said.

People tip based on the food, the atmosphere, and the service, Boucher said. It is rare for a customer to undertip at one of his establishments unless there was a problem. Otherwise, New Hampshire diners leave solid tips.

Generous tipping may be an indicator of how people feel about their own finances and may be a sign of overall economic strength. New Hampshire has the strongest economy in New England, and it is the only state in the region to make the top 10 list of generous tippers. 

On the other end of the economic spectrum, California — with an economy that has been slipping toward recession —  has the worst tippers in the country, paying out 17.5 percent tips on average.

Washington state, amid a recession, ranks 49th on the list of tip averages, leaving 18.2 percent. Floridians are the third cheapest tippers, but restaurant insiders say that could have more to do with the state’s elderly population than its economy.

“Old farts don’t tip,” one former restaurant manager told NHJournal. “When the blue hairs show up, tips go down.”

The world is coming to the Granite State as businesses from across the globe are setting up shop in order to get their cut of the ‘New Hampshire Advantage.’

The new report on New Hampshire Foreign Direct Investment prepared by the New Hampshire Department of Business and Economic Affairs, Plymouth State University, and the World Affairs Council of New Hampshire shows New Hampshire gaining a leading edge in attracting businesses from nearly every continent.

New Hampshire is outperforming the national average when it comes to employment from foreign companies and investment.

“New Hampshire’s low taxes, skilled workforce, and proximity to domestic and foreign markets are advantages few states can offer to companies poised for international growth,” BEA Commissioner Taylor Caswell said. “These data and findings will be useful in our efforts to attract businesses to New Hampshire and create high-paying jobs for years to come.”

According to the report, written by PSU professors Roxana Wright and Chen Wu, New Hampshire outperformed the national average when it comes to investment from global firms. Foreign subsidiaries employed 50,700 people in the state in 2020, which is 8 percent of the state’s overall private-sector employment, higher than the national average of 6 percent. Right said this level of global investment runs throughout all industries and locations in the Granite State, strengthening the New Hampshire economy.

Plymouth State University professors Roxana Wright, left, and Chen Wu present their findings in the 2021-2022 NH Foreign Direct Investment Report at the New Hampshire Foreign Direct Investment Forum on Thursday

“Foreign direct investment and international connections touch many of the industry segments and all key supply chain activities in New Hampshire,” Wright said. “And international businesses contribute to financing availability for private and corporate residents, to the growth of local markets and industries, and to the resilience of production capacity.”

The PSU report found that in 2022 nearly 180 foreign companies headquartered in 23 foreign countries had more than 360 subsidiaries from some 50 industries operating across the ten counties in New Hampshire.

Most of the foreign-owned subsidiaries are in the finance and insurance industry, making up 28 percent of foreign firms. About 75 percent of these finance companies operate in Hillsborough and Rockingham counties, but the rest of the state is benefiting from foreign investments, the report found.

Wright and Wu’s report found there is plenty of potential for growth in foreign manufacturing investment in the North Country as well.

After finance and insurance companies, foreign investment is spread evenly across a wide spectrum of industries, including retail, research, manufacturing, real estate, and transportation. The foreign investment throughout New Hampshire’s economy shows the opportunity companies around the world see in the Granite State, and it makes local industries stronger, Wu and Wright say.

“The diverse presence of foreign firms within industries once again demonstrates the high level of integration that foreign businesses have with a wide range of lucrative activities in the state,” Wu and Wright’s report states. “For successful operations, it can be expected that these firms collaborate and partner with local, domestic, and non-domestic companies and institutions and are an intricate part of New Hampshire business.”

Canada leads the way when it comes to foreign companies investing in New Hampshire, with 118 subsidiaries in 2022. They’re followed by the United Kingdom’s 53, Switzerland’s 30, Japan’s 25, and Germany’s 23.

These foreign firms are spread unevenly throughout the state, with most in the southern parts of New Hampshire, dominated by Hillsborough and Rockingham counties who host companies from around the globe. The Norty Country’s Coos County is home to just two foreign subsidiaries, both from Canada. 

The full report is available on PSU’s webpage.

In New Hampshire, it may not quite be “Live Free,” but according to a new report, it’s pretty darn cheap.

Moving company northAmerican Moving Services ranks New Hampshire as America’s “Cheapest Place to Live” based on the overall value for Granite Staters compared to residents of other states. Its report says New Hampshire offers a “high quality of life at a lower price point.”

The company looked at average household income, median home price, average housing cost, average grocery costs, average utilities, inflation costs, and state income taxes for the rankings and determined New Hampshire is the best in the nation.

“These states offer a high quality of life at a lower price point, making them an excellent choice for anyone looking to stretch their budget further,” the report states.

Being first among 50 is something New Hampshire is getting used to. Last year alone, the Granite State was named first in overall freedom by the Cato Institute, first in public safety by U.S. News, and first in economic freedom by the Fraser Institute.

In his State of the State address this month, Gov. Chris Sununu touted New Hampshire’s leading economy and free society as a model for the rest of the country.

“Over the last six years, New Hampshire has become an island of freedom surrounded by highly taxed, highly regulated states,” Sununu said. “We are a harbor for citizens fleeing the states they once called home in pursuit of our Live Free or Die way of life … ‘We have provided leadership that puts ‘The Individual’ ahead of ‘The System.’”

Under Sununu’s watch, New Hampshire has become the fastest-growing economy in the nation, with record-low poverty rates and a booming job market. The state also ranks high for raising children, supporting families, and overall access to healthcare.

“New Hampshire is the envy of the nation, the gold standard of states, and number one place in America to live, work, and raise a family,” Sununu said.

South Dakota, Tennessee, Alaska, and Texas made up the top five cheapest states to live based on those metrics. No other New England state landed in the top 10.

That may explain why New Hampshire gained population last year while Massachusetts and Rhode Island suffered losses.

And a new analysis by the National Taxpayers Union released Thursday also named New Hampshire one of the best states for remote and mobile workers. Thanks to the lack of an individual income tax, the Granite State tied for first with other states that have the same tax policy. Massachusetts ranked 39th and New York was 47th.

Sununu attributes much of the success to New Hampshire’s commitment to small government. The Granite State makes sure that people get to make decisions for themselves.

“Big government authoritarianism might be how they do it in 49 other states, but that’s not how we do it in New Hampshire,” Sununu said.

Hawaii is the most expensive state to live in, according to the northAmerican Moving Services metrics, with Oregon, California, New York, and Utah close behind.

And Massachusetts? It was number 44, one of the 10 most expensive states in the U.S.

Two new reports show Granite Staters are on solid financial footing heading into the holidays compared to the rest of the U.S.

New Hampshire residents have the second highest credit scores on average in the nation according to a data analysis by Wallethub. At the same time, the labor market is improving, with New Hampshire experiencing one of the biggest week-to-week drops in new unemployment claims.

Frugal Yankees in New Hampshire hold an average 719 credit score, second only to Minnesota’s 724, Wallethub reports. The national average is 695, which means most Americans are just below the 700-score considered good credit, according to WalletHub’s findings.

Vermont, Massachusetts, and South Dakota round out the top five with average scores above 700. Alabama at 672, Louisiana at 668, and Mississippi at 662 are the three states with the worst average credit scores.

Patrick A. Cozza, who teaches business at Fairleigh Dickinson University, said the best way to build good credit is to pay your bills on time. Minimizing the use of credit cards is important as well.

“The simple answer again is to manage only the debt you can handle, do not overly subscribe to credit by securing additional credit cards,” Cozza said. “People feel more is better than few, but it could lead to real credit problems down the road if you cannot effectively manage the debt.”

The early days of the COVID-19 pandemic, with business closures and high unemployment rates, put a lot of people into debt. Those who used credit cards to get by during the pandemic can dig their way out of debt and toward a better credit score, Cozza said.

W.H. “Joe” Knight at Seattle University School of Law said it is important to pay down debt and build savings.

“More Americans are saving more these days because of the fewer opportunities to shop, eat out, etc. Accumulate savings and apply some of those extra ‘saved dollars’ to the largest interest-charging creditor bills,” Knight said. “Slow but sure progress to improving a credit score, reducing the total amount of credit you have outstanding.”

New Hampshire residents are keeping up with their bills, and they are working. The Granite State keeps seeing unemployment rates drop, behind only Kentucky for the most recent unemployment rate report.

The labor market is still experiencing the effects of the COVID-19 pandemic, and there are more opportunities being created, according to Thomas Kohler at Boston College Law School.

“A large number of Baby Boomers left the workforce during the pandemic while other workers changed jobs, a good example being the hospitality industry,” Kohler said.

With more opportunities for willing workers, the pressure is on employers. Employers who want to find and keep workers have learned they need to increase pay and benefits, given the new realities of the labor market.

“I think it will take some time for the situation to become clearer, but it seems increasingly clear that people are unwilling to perform unpleasant work at poor rates of remuneration with no voice in their working conditions. Hardly surprising, I would say,” Kohler said.

New Hampshire’s 2.4 percent unemployment rate in October was well below the national average of 3.7 percent reported by the Bureau of Labor Statistics. But it was not the lowest in the nation. That honor went to Minnesota and Utah at 2.1 percent each. Vermont and North Dakota at 2.3 percent also edged out the Granite State. Those numbers reflect a tight labor market that some economists say could restrict growth.

According to the U.S. Chamber of Commerce, New Hampshire is suffering one of the most severe labor shortages in the nation, with just 44 unemployed workers for every 100 open jobs.

However, Jeffrey Arthur, a Professor of Management at Virginia Tech, said while employees have the upper hand now, the economic tide will turn to favor employers.

“Employees are more likely to feel empowered to form and join labor unions at places like Amazon, Starbucks, and other retailers where they have not been able to do this in the past. Employers are also motivated to provide employees with additional benefits such as tuition reimbursement and flexible work arrangements in order to attract and retain them,” Arthur said. “These changes may be short-lived, however. If the economy slows and unemployment increases, I expect to see the balance of power tilting back to employers. These cycles have happened in the past.”