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Sunday, November 13, 2011

Trying to define ‘New Hampshire Advantage’ is elusive

In the mid-1990s, a British company called Shel-tec was looking for a home in the United States.

Company officials were leaning toward Maryland until they came across a New Hampshire booth at a trade show touting all the open land and airport access at Pease International Tradeport in Portsmouth.

When Shel-tec executives traveled to Pease to learn more about the site, said Fred Kocher, president of the New Hampshire High Technology Council, they were surprised to find themselves across the table from the governor, the president of the University of New Hampshire and the chairman of the Pease Development Authority.

“They were all in the same room and said, What do you need?” Kocher said. “The company was blown away.”

Kocher said that kind of access to government officials and resources is the “New Hampshire Advantage.” It’s the reason Shel-tec, now known as Lonza Biologics, decided to locate in New Hampshire, eventually becoming one of Seacoast’s largest employers.

Not everyone would agree with Kocher’s definition, though.

The “New Hampshire Advantage” is a term that’s thrown around a lot in this state, particularly during public policy debates. But it isn’t easy to define. It seems there’s no real agreement on what it means.

Some folks say it relates to the state’s business climate; others to the lack of a sales or income tax. One person might argue the “New Hampshire Advantage” is related to the quality of life, while another might say it has more to do with the structure of our government.

Some say it’s what we are; others what we aren’t.

Dennis Delay, an economist with the New Hampshire Center for Public Policy Studies, said the common public perception is that the New Hampshire advantage refers to our low tax burden and high quality of life.

While that’s true to an extent, Delay said, he believes the state’s best advantage is the large citizen Legislature.

“In order to get things done and change things, you have to convince 425 people,” Delay said. “We spend a lot of time thinking about things before we do them.”

Peter Francese, a well-known state demographer, has a different idea.

“The ‘New Hampshire Advantage’ is the fact that we have an extremely highly educated workforce,” he said. “The workforce in New Hampshire, if not the most productive, is one of the most productive in the country.”

The term “New Hampshire Advantage” was coined in the mid-1990s by then-Gov. Steve Merrill. Current Gov. John Lynch likes to use it to promote the state as a great place to live, work and do business.

A nonprofit advocacy group has been created around the term. The New Hampshire Advantage Coalition urges elected officials to keep taxes low by keeping spending low.

The group is based on the idea that New Hampshire’s low tax burden creates an advantage over other states.

The term is often used in state politics to argue one side or another in public policy debates. When a controversial bill surfaces – no matter what it’s about – expect to hear opponents saying it “threatens the ‘New Hampshire Advantage.’ ”

Charlie Arlinghaus, president of the Josiah Bartlett Center for Public Policy, believes the term refers to the economic and financial advantages of locating a business in New Hampshire.

The advantage began in the early 1970s when then-Gov. Walter Peterson initiated a change in the state’s tax structure, Arlinghaus said.

“At the time, there was a disadvantage to being in New Hampshire because if you were in a capital-intensive business, this wasn’t a good place to be,” Arlinghaus said.

With the restructuring, New Hampshire shifted its focus to taxing successful businesses, not start-ups struggling to survive. The state abolished 13 capital taxes and introduced the simpler profits-based tax structure that’s still in place.

Tom Daly, president of Manchester-based Dynamic Network Services and chairman of the New Hampshire High Tech Council, also mentions the state’s business-friendly tax climate in describing the “New Hampshire Advantage.”

But he said the state’s location and geographic amenities play a role, too.

“We’re an hour from Boston, an hour from the seacoast, an hour from hiking, an hour from Vermont,” Daly said. “It’s certainly not any one thing.”

Most people, despite how they define the term, agree that it’s open to interpretation.

“Different people use it differently,” Arlinghaus said.