where goes new hampshire? nh government finance officers may 2, 2008 dennis delay deputy director,...
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Where goes New Hampshire?
NH Government Finance OfficersMay 2, 2008
Dennis DelayDeputy Director, NHCPPS
“…to raise new ideas and improve policy debates through quality information and analysis on issues shaping New Hampshire’s future.”
Anecdotal evidence from the Fed Bank of Boston, April 16, 2008
First District reports continue to be mixed, with most expressing concern about the near-term outlook.
Retail seeing activity slow, although some remain ahead of year-earlier sales levels;
Tourism is fairly robust in the region. Manufacturers mostly report revenue growth
and say they are uneasy with high costs and a slowing U.S. economy.
Real estate markets remain soft.
Help wanted advertising online has leveled off.
US Help Wanted AdvertisingIndex 2/2004=100
50.0
70.0
90.0
110.0
130.0
150.0
170.0
190.0
210.0
230.0
250.0
Jan
-00
Jul-
00
Jan
-01
Jul-
01
Jan
-02
Jul-
02
Jan
-03
Jul-
03
Jan
-04
Jul-
04
Jan
-05
Jul-
05
Jan
-06
Jul-
06
Jan
-07
Jul-
07
Jan
-08
Jul-
08
US Monster
Layoffs have moderated, compared to the beginning of the decade, but recent report is unsettling.
Source: NH Dept of Employment Security
Initial Claims for Unemployment Compensation NH
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000Ja
n-90
Jan-
92
Jan-
94
Jan-
96
Jan-
98
Jan-
00
Jan-
02
Jan-
04
Jan-
06
Jan-
08
The pool of unemployed is still uncomfortably large.
Source: NH Dept of Employment Security
Continued Weeks Claimed for Unemployment Compensation NH
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000Ja
n-9
0
Jan
-92
Jan
-94
Jan
-96
Jan
-98
Jan
-00
Jan
-02
Jan
-04
Jan
-06
Jan
-08
Manufacturing suffered the worst job losses
NH Manufacturing Jobs
70000
75000
80000
85000
90000
95000
100000
105000
110000Ja
n-01
Jul-0
1
Jan-
02
Jul-0
2
Jan-
03
Jul-0
3
Jan-
04
Jul-0
4
Jan-
05
Jul-0
5
Jan-
06
Jul-0
6
Jan-
07
Jul-0
7
Jan-
08
Jul-0
8
Source: NH Dept of Employment Security
Construction jobs soften with real estate woes
NH Construction Jobs
20000
22000
24000
26000
28000
30000
32000
34000Ja
n-01
Jul-0
1
Jan-
02
Jul-0
2
Jan-
03
Jul-0
3
Jan-
04
Jul-0
4
Jan-
05
Jul-0
5
Jan-
06
Jul-0
6
Jan-
07
Jul-0
7
Jan-
08
Jul-0
8
Source: NH Dept of Employment Security
Consumers are still spending money at retail stores
NH Trade & Transportation Jobs
130000
132000
134000
136000
138000
140000
142000
144000
146000
148000
150000Ja
n-0
1
Jul-
01
Jan
-02
Jul-
02
Jan
-03
Jul-
03
Jan
-04
Jul-
04
Jan
-05
Jul-
05
Jan
-06
Jul-
06
Jan
-07
Jul-
07
Jan
-08
Jul-
08
Source: NH Dept of Employment Security
… but tourism has stalled.
NH Leisure and Hospitality Jobs
50000
55000
60000
65000
70000
75000
80000Ja
n-01
Jul-0
1
Jan-
02
Jul-0
2
Jan-
03
Jul-0
3
Jan-
04
Jul-0
4
Jan-
05
Jul-0
5
Jan-
06
Jul-0
6
Jan-
07
Jul-0
7
Jan-
08
Jul-0
8
Source: NH Dept of Employment Security
Insurance, investment, banks, wither after significant growth
NH Financial Activities Jobs
33000
34000
35000
36000
37000
38000
39000
40000
41000Ja
n-01
Jul-0
1
Jan-
02
Jul-0
2
Jan-
03
Jul-0
3
Jan-
04
Jul-0
4
Jan-
05
Jul-0
5
Jan-
06
Jul-0
6
Jan-
07
Jul-0
7
Jan-
08
Jul-0
8
Source: NH Dept of Employment Security
Business demand for technical services and employment agencies expands anew.
NH Professional & Business Service Jobs
46000
51000
56000
61000
66000
71000Ja
n-01
Jul-0
1
Jan-
02
Jul-0
2
Jan-
03
Jul-0
3
Jan-
04
Jul-0
4
Jan-
05
Jul-0
5
Jan-
06
Jul-0
6
Jan-
07
Jul-0
7
Jan-
08
Jul-0
8
Source: NH Dept of Employment Security
Demand for education and healthcare is relentless
NH Educational & Health Service Jobs
82000
87000
92000
97000
102000
107000
112000Ja
n-01
Jul-0
1
Jan-
02
Jul-0
2
Jan-
03
Jul-0
3
Jan-
04
Jul-0
4
Jan-
05
Jul-0
5
Jan-
06
Jul-0
6
Jan-
07
Jul-0
7
Jan-
08
Jul-0
8
Source: NH Dept of Employment Security
…and citizens turn to the Government for help.
NH Government Jobs
70000
75000
80000
85000
90000
95000
100000Ja
n-01
Jul-0
1
Jan-
02
Jul-0
2
Jan-
03
Jul-0
3
Jan-
04
Jul-0
4
Jan-
05
Jul-0
5
Jan-
06
Jul-0
6
Jan-
07
Jul-0
7
Jan-
08
Jul-0
8
Source: NH Dept of Employment Security
NH Real Estate Shifted Quickly
• Chart shows NH Residential Sales and Prices, Percent Change vs. the previous year.
• Sales declined by one third from 2004 to 2007.
• Sales declined another 27% so far in 2008, and prices are down 8%. -30
-25
-20
-15
-10
-5
0
5
10
15
20
2002 2003 2004 2005 2006 2007 08Q1
Units Sold Median Price
Source: NH Assoc. of REALTORS
Home Prices Had Increased Faster than Income
New Hampshire Personal Income vs Convential Mortgage Home Price
-4.0-2.00.02.04.06.08.0
10.012.014.016.0
99Q1
99Q4
00Q3
01Q2
02Q1
02Q4
03Q4
04Q2
05Q1
05Q4
06Q3
07Q2
Per
cent
Cha
nge
over
Las
t Y
ear
NH Personal Income Conventional Mortgage Home Price Index
New Hampshire affordability better than the 1980’s.
Sources: Census Bureau and Bureau of Economic Analysis
Ratio Median Home Value to Per Capita Income
2.00
3.00
4.00
5.00
6.00
7.00
8.00
1960 1970 1980 1989 1990 2000 2003 2004 2005 2006 2007
United States New Hampshire
Correcting the home price to rent ratio.
Ratio of Existing Home Price to Median Rent
1.00
1.20
1.40
1.60
1.80
2.00
2.20
2.40
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
Ratio Average 1990 to 2003
Total New Hampshire
12% decrease in home pricesand 15% increase in median rent
General Fund and Property Tax
NH Taxes as % of Gross State Product
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
4.0%
4.5%
5.0%
5.5%
6.0%
1966
1968
1970
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
Year
Property Taxes
State General Fund Revenue
2007 NH General Fund Revenue Sources
Business Profits Tax20%
Business Enterprise Tax6%
Liquor Revenue9%
Interest and Dividends Tax8%
Estate and Legacy Tax0%
Insurance Taxes7%
Net "Medicaid Enhancement"
7%
Other Revenues6%
Meals and Rooms Tax14%
Board and Care1%
Utilities Tax0%
Real Estate Transfer Tax6%
Dog & Horse Racing Revenue
<1%Beer Tax
1%Court Fines & Fees
2%Securities Revenue
2%
Communications Taxes5%
Tobacco Tax5%
Total:$1,422 million
34
State is constantly ‘tinkering’ with revenue system.
NH General Fund Revenues (Current $)
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
$1,600
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
State Fiscal Year
Mil
lio
ns
of
Do
llar
s
Taxes and rates in place in 1988
Mediscam New taxes
Increased rates
$543
$1,058
$1,422
More Reliant on Property Taxes
State
Collections Per
Household RankCollections Per Capita Rank
New Jersey $6,110 #N/A $2,217 1Connecticut $5,405 1 $2,052 2New Hampshire $5,332 2 $2,034 3New York $4,800 3 $1,773 4Rhode Island $4,480 5 $1,706 6Vermont $4,245 7 $1,705 7Massachusetts $4,224 8 $1,608 9Illinois $3,984 9 $1,469 10Maine $3,969 10 $1,640 8
State and Local Property Tax Collections
Fiscal Year 2005
Per Household and Per Capita
Source: The Tax Foundation: http://www.taxfoundation.org/taxdata/show/251.html
More Reliant on Corporate Taxes also …
Sources of Revenue for State Government (US versus New Hampshire)
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
From Local andFederal
Governments
Property Taxes Sales Taxes IndividualIncome Taxes
CorporateIncome Taxes
U.S. Average
New Hampshire
Source: The Tax Foundation: http://www.taxfoundation.org/taxdata/show/1738.html
Our tax burden remains lower ….
Average Tax Burden in NH and the US
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
1970
1972
1974
1976
1978
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
NH Tax Burden
Average State-Local TaxBurden
Source: The Tax Foundation: http://www.taxfoundation.org/taxdata/show/251.html
Work Focused on Local Government
Financing Local Government (Data Book) Elderly Property Tax Exemptions Update Aging and Government Services
• Implications of aging on human service expenditures (and county LTC system)
The Shifting Burden of Government Services? • Education• Long Term Care System• Retirement System• Juvenile Services
Services by Type of Service
What We Did
Surveyed available data on towns Collected the only consistent source of
information on taxation, appropriation, revenues and expenditures by major type of service (municipal, county, school) funded by cities and towns.
Provide analysis of general trends in local government for the state.
Provide each town with 5 years of data, available on the web.
The highest municipal valuations are in the Merrimack Valley, Seacoast and the Lakes Region (metro centers and tourism related)
Municipal valuations per person have grown the fastest in areas around the Lakes (second home and tourism related?)
Rising property values had let towns reduce tax rates.
NH Equalized Property Value and Tax Rate
0
20
40
60
80
100
120
140
160
180
200
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
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1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
Bill
ion
s
$0
$5
$10
$15
$20
$25
$30
Property Value Tax Rate
Property Values (left scale)
Tax Rate (right scale)
Falling home prices will mean falling property values.
NH Equalized Property Value and Home Prices
$0
$20
$40
$60
$80
$100
$120
$140
$160
$180
$200
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
Bil
lio
ns
0
100
200
300
400
500
600
Property Value Home Price Index
Property Values (left scale)
OFHEO home price index, 1980=100 (right scale)
Doing this work helped the Center refocus the mission.
Local Government – Enhancing the understanding of where the burden of government services is born and how it is changing is important. In addition, it is important that the Center continue to expand the information on city and town functions that is available.
Northern New England Scores Well
Northern New England Economic Scoreboard for 2007-2008Ranking among the 50 states(Rank of '1' is best; for example 1 is lowest tax rate, highest income, etc.)
ME NH VTCategories Rank Rank RankFavorable Tax Climate (by burden on income, 2005) 45 1 41Standard of Living (by poverty rate 2004-2006) 26 1 3Most Livable State (CQ Press, 2008) 20 1 8Safest State (CQ Press, 2008) 2 1 4Child and Family Well Being (Annie E. Casey Foundation, 2007) 15 2 6Education – High School Degree or better (2006) 18 3 10Healthiest State (CQ Press, 2008) 4 2 3Per Capita Income (2007) 35 8 23Education – College Degree or better (2006) 25 10 7
A full proof economic indicator!
New Hampshire Boat Registrations and Payroll Employment (000's)
60000
65000
70000
75000
80000
85000
90000
95000
100000
105000
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
400
450
500
550
600
650
700
NH Boat Registrations NH Payroll Employment
All of our reportsare available on the web:
www.nhpolicy.orgwww.nhpolicy.org
New Hampshire Center New Hampshire Center for Public Policy Studiesfor Public Policy Studies
Board of Directors
Donna Sytek, Chair
John B. Andrews
John D. Crosier
Shelia T. Francoeur
Chuck Morse
Todd Selig
Stuart Smith
James Tibbetts
Brian Walsh
Kimon S. Zachos
Martin Gross
Staff
Steve Norton
Dennis Delay
Ryan Tappin
“…to raise new ideas and improve policy debates through quality information and analysis on issues shaping New Hampshire’s future.”