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GOP says state budget delivers major tax relief, Dems disagree

By InDepthNH.org - | Dec 28, 2021

Senate President Chuck Morse prepares to preside over the first in-person Senate session of 2021, held in Representatives Hall in May. (Photo by PAULA TRACY)

CONCORD – The New Hampshire Senate issued a news release Monday saying the Republican state budget delivers major tax relief for communities, but Democrats say it is not sustainable.

“New Hampshire municipalities are receiving a 45 percent increase in revenue from the Meals and Rentals Tax, thanks to the recently enacted Republican state budget,” the release said.

Under HB 2, the local share of revenues from the state’s tax on restaurants, hotels, and car rentals increased to 30%, up from 22% in the last budget. Together with strong growth in New Hampshire’s hospitality industry, this results in more than $100 million going directly to local coffers to help keep local property tax rates down.

In total, the New Hampshire Treasury is transferring $100,143,752 to cities and towns by the end of the day. That represents an increase of 45.5 percent ($32M) from Fiscal Year 2021, the release said.

Senate President Chuck Morse, R-Salem, said, “Cutting taxes is always a priority for Republicans. It puts more money in working families pockets, makes living in New Hampshire more affordable and tells businesses that New Hampshire is the place they should set up shop. The additional $32M being sent back to our cities and towns will make a real difference, especially when it comes to helping to lower local property tax rates.”

See list of municipalities that will benefit here: http://indepthnh.org/wp-content/uploads/2021/12/Room-and-Meals-Revenue-Sharing-2022.pdf

Senate Minority Leader Donna Soucy, D-Manchester said in an email response she was not surprised to see short-term boosts in revenue going to municipalities.

“The problem is, it’s not sustainable,” Soucy said. “The budget passed by Republicans has a one-time $100 million tax cut for some places, meaning a $100 million tax increase for taxpayers next year. In addition, Republicans’ package of tax cuts only benefits the wealthiest people in New Hampshire.”

Soucy said for example, elimination of the Interest and Dividends tax represents an annual estimated loss of $140 million a year in revenue with a benefit only for the highest income 10%.

“It’s also important to remember that this Republican budget does less for education than what the continuation of Democrats’ policies would have provided. All told, over the next few years, New Hampshire will sustain a $700 million loss in revenue to the state. So, while I hope this one-time money is helpful at the moment, the increased Rooms and Meals tax distribution is truly not sustainable,” Soucy said.

Gov. Chris Sununu said, “We cut the rooms and meals tax to its lowest level in over a decade and yet we still sent even more money back to cities and towns. Instead of downshifting costs, we downshifted cash, giving cities and towns extra flexibility — a win for our citizens.”

The increase in Meals and Rentals Revenue Sharing was spearheaded by state Sen. Denise Ricciardi, R-Bedford, whose legislation was incorporated into the state budget package in June. “I made it my goal this past session to protect local property taxpayers by making certain the state kept its promise to share more of the revenues that our M&R tax generates. I am happy and extremely satisfied that today, our cities and towns will finally receive the amount they’ve been promised for so long,” said Ricciardi.

Increased revenue sharing is just one example of how the new budget is delivering tax relief for Granite Staters, the release said. The balanced budget also lowered businesses taxes, began the phase out the Interest and Dividends Tax on seniors’ investment income, and cut $100 million from the Statewide Property Tax, the release said.

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