The Advocate Recap – 1/27/17

The Advocate

We started off this week bright and early on Monday morning with our annual Legislative Symposium, presented as a Roundtable Breakfast this year. We want to thank all of the members of the Greater Nashua delegation who joined us to talk about the most pressing issues of the day. A great deal of the discussion was focused on energy, with other topics including transportation, the opioid crisis, skilled workforce needs, housing, pension costs, and elderly and child-focused services. All of the members of the Chamber should be tremendously grateful that our area legislators continue to be strongly dedicated to working with us. The relationship we have with our legislators is really unique, and we appreciate that.

During the rest of the week, our work at the legislature was focused on three areas close to the heart of all of our members: utility costs, rail, and economic development.

Beefing Up ERZ Zone Incentives (SB 74)

What is an ERZ?
ERZ stands for Economic Revitalization Zone. Businesses that set up in these zones can utilize tax credits against the BPT and/or the BET. But the ERZ law caps the credits that can be utilized in any given year.

• The maximum amount of the credits that can be used in the aggregate in any given year is $825,000,
• The maximum amount of the credit that can be utilized by an individual taxpayer in any year is $40,000.

Long-time readers of The Advocate will know, these ERZ Zones (originally called “Commercial Reinvestment Opportunity” or “CROP” Zones) were first established a number of years ago through legislation that was drafted and successfully lobbied by this Chamber (so we have to confess that we have a bit of proprietary interest in how these zones are working).

What is the purpose of an ERZ?
ERZs have been quite successful in fulfilling their purpose- to give the Department of Resources and Economic Development a tool that can be used for recruiting new businesses to come to New Hampshire. The very success of the program, in fact, is why this bill is necessary.

What is the issue?
On Wednesday, we registered our support for SB 74, which would increase the level of the caps on the amounts of the credits that are available for businesses in economic revitalization (“ERZ”) zones.

As Chris Way of DRED told the Senate Ways and Means Committee at the hearing this week, there are far more businesses that could employ these credits than what is possible under the restraints of the current law. Instead of being able to use the ERZ law to its maximum potential, then, DRED has to be cautious in how it talks about the availability of ERZ credits.

What’s the impact in greater Nashua?
If the maximum had been at the proposed rate from 2010 to today, over $1.1 million in additional credits could have been awarded. And even more telling numbers: here’s how much companies awarded credits in the past three years invested back into our communities with these ERZ credits: $2,937,399 (2013), $25,467,595 (2014), and $15,744,792 in 2015.

Given the fact that DRED has precious few incentives to roll out to prospective businesses, and given the proven success of these zones, it seems beyond dispute to us that it would be wise to enhance DRED’s ability to market the availability of ERZ credits. SB 74 does this by increasing the caps: raising the aggregate cap to $3 million and the individual cap to $50,000.

The Committee could vote on this as early as next week.

Gaining Uniformity In Municipal Property Taxation of Utilities (HB 324)

It would hardly be a week at the legislature without something going on that relates to how much we are paying in our utility bills. The House Science and Tech Committee listened to testimony for 3 hours this week on HB 324, the bill to require uniformity in the valuation of utility property for purposes of local property taxes.

The reason that this bill is so important is because utilities collect back from their customers what it costs the utilities to pay those local property taxes. So if the local property taxes on utilities are based on overvaluations of the utility property, it is something we all pay for in our utility bills. This is a hidden tax, and the very obscurity of it requires vigilance in addressing the problem.

As we have told you before, municipalities are assessing the property in their towns using differing and inconsistent methodologies. The appearance here is that some municipalities may be using a result-oriented approach that focuses more on the amount of money they want to bring in than what the actual value of the property is.

This has resulted in a large number of abatement actions filed by utilities around the state. As has been pointed out before, the ratepayers/taxpayers end up paying for the litigation costs of both sides in these contests. So a uniform approach would undoubtedly serve to drastically reduce the number of (and the costs of) these sorts of abatement actions.

Revenue should be raised at the state and local level in a transparent manner. We do not want to see any local government use a utility bill as a convenient alternative to other more open ways of raising revenue. So we are urging the legislature to create uniformity and put an end to this problem.

Elimination of NH Rail Transit Authority (HB 267)

Wednesday also saw a long hearing in front of the House Transportation Committee concerning HB 267, a bill to eliminate the NH Rail Transit Authority. We opposed this bill, which (from the testimony of prime sponsor Rep. Neal Kurk of Weare) is clearly designed to put an end to further discussions of bringing commuter rail to New Hampshire. Rep. Kurk said at the hearing, “This is the beginning of the 21st century – we don’t need to return to the 19th.”

Rail would be a game-changer
Our Chamber has consistently been a strong supporter of efforts to bring commuter rail to Nashua and beyond because we are convinced that commuter rail running from Nashua to Boston would be a game-changer as far as economic development in the greater Nashua region (and, indeed, for the wider state economy) would be concerned. Obviously, improvement in the economic fortunes of one part of the state has implications for the whole state, since projects that increase state tax revenues are going to benefit people all over New Hampshire, not just those who live in the areas that are directly impacted by a particular project. This is why transportation projects like the widening of I-93 are subsidized by the state: it is not just those taxpayers who live in communities which are located on the I-93 corridor south of Manchester that benefit from the work that is being done.

To be sure, the question of how the capital or operating costs of commuter rail would be met is still an open question. But the fact that the question is still open is hardly a reason for the state to essentially say that the debate is over. At the very time when New Hampshire is seeking new ways to revitalize its economy and to attract and retain younger workers, the last thing that we should be doing is taking an action that, to all appearances, is designed precisely to foreclose further work on the commuter rail issue. The message that this would be sending to those younger workers would be loud and clear (speaking of a return to the 19th century, by the way).

Thank you to all of the area legislators who attended or testified at the hearing, including Senator Bette Lasky, Rep. Mike O’Brien, Rep. Catherine Sofikitis, and Rep. Carl Seidel. We also want to give a big tip of the cap to the Board of Alderman, who registered their opposition, and to Mayor Donchess, who patiently waited through almost two hours of testimony before being reached for his turn.

Mayor Donchess noted that the Chamber is 100% in favor of rail, and asked the Committee a great question: “Why would we cut off discussion on an issue that a substantial part of the community thinks would be a valuable way to benefit the economy?” Well said, Mr. Mayor. We hope the Committee takes that question to heart.

Leave a Reply

Your email address will not be published.