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N.H. economy moving forward -- but at a snail's pace

by Bob Sanders

New Hampshire Business Review

Despite what they're saying on the campaign trail about where the U.S. economy is going, the New Hampshire economy seems to be headed in the right direction. The question, however, is how long is it going to take to finally regain its solid footing? And will it continue to slowly improve or take a turn -- or a double dip -- for the worse?

With the exception of the construction and government sectors, and maybe health care, the state's economy is crawling -- not marching -- toward a happier tomorrow:

• Revenues collected through the state business profits and business enterprise taxes are up 5.5 percent year to date compared to a year ago.

• Unemployment fell in November, by a tantalizingly small one-tenth of a percent, to 5.2 percent, only a half a percent below what it was last year. There has been some job gain, but it's only amounted to a few thousand jobs.

• Housing has "stabilized" -- the word coming off the lips of New Hampshire Association of Realtors President Tom Riley's lips -- with both annual growth in sales and decline in value in the single digits.

• Both bankruptcies (down 12.9 percent) and foreclosures (down 8.5 percent) have receded from their record levels in New Hampshire. But the new business created in that void has increased by an anemic 1.5 percent through October.

The numbers, said Dennis Delay, an economist with the New Hampshire Center for Public Policy Studies, show the state's economy is "skating on thin ice."

Delay said he expects the state's job growth -- which has been at a dismal 1.5 percent this year -- to stay at the same level for the next three years. If so, it would take until the second quarter of 2013 to regain all of the jobs lost in the recession, he said.

So with possible trouble ahead, and certain trouble behind, Applied Economic Research President Russ Thibeault's description of the economy as "boring" might be the most hopeful adjective you can find.

But that doesn't necessarily bother Rob Freese, senior vice president of Globe Manufacturing in Pittsfield. "Flat is good, though it makes me sick to say it as a sales and marketing guy."

Globe sells protective clothing for firefighters, and in this age of austerity, the government - only a few years ago an alleged "stimulator" - is now seen as "a drag on the economy," in the words of Delay.

Government cutbacks haven't meant fewer orders for fire suits, however. They have meant fewer massive road projects, shiny new schools and layoffs at the state, county and local government level.

Retail

There has been talk of a retail surge, a housing spurt, perhaps even the possibility that small businesses will begin hiring again, but statistics haven't caught up with such sunny hopes, as seen in the results of some recent surveys of businesses by both the Business and Industry Association of New Hampshire and NHBR.

The BIA, which surveyed some 300 businesspeople, found that 15 percent of respondents expected to hire more staff in 2012, while 5 percent said they will cut back. Some 43 percent said they expected increased revenues in the coming year, with 19 percent expecting declines. The BIA described the overall response as "cautiously optimistic."

Likewise, NHBR's newly released survey of its readers -- conducted in early December, with some 150 respondents -- also showed some slight caution on the part of participants, who were primarily involved in small businesses.

Some 30 percent said they plan on taking on additional staff, and 5 percent plan said they would cut their workforce. More than half planned to expand in other ways. Some 68 percent expected some revenue growth, and 54 percent saw some increase in the bottom line.

"Things are coming back," said Deb Brewer, owner of CrystalVision Inc., a Web application development firm in Portsmouth, who responded to the survey. She said her company had to cut their workforce from a dozen to five during the recession, but now she has plans to add an employee.

Similarly, Graphicast - a casting firm in Jaffrey - was "hammered just like everyone else," starting in the fall of 2008, but now "we are pretty back to normal, even something better than normal," said President Val Zanchuck, another survey respondent.

Zanchuck said he was able to maintain the same workforce (though at a lower pay, thanks to salary cuts and furloughs) because his customers used him to develop molds for new products, even if they weren't able to use them yet.

Now, with a full and well-trained staff intact and the economy on the rebound, Graphicast is geared up to start putting those molds to use.

Exports

Despite such sunlit stories, there are still dark clouds on the horizon, especially from Europe.

It was the international market that sustained the New Hampshire economy during the dark days. In 2010, for example, the state's exports increased by 41.7 percent -- the biggest increase in the nation.

The good news is that exports continued to grow in 2011. The bad news is that they have only risen by 4.3 percent. And even though most of those exports went to Mexico, Canada and Asia, the European crisis might be one reason for the slowdown, both directly and indirectly, said Dawn Wivell, the former New Hampshire foreign trade guru who is now a consultant with Firebrand International.

The weak dollar helped fuel some of those overseas sales, she said. But now that the euro has fallen even more, that will make U.S. goods less competitive.

Globe Manufacturing in Pittsfield - which had also sustained itself though increased exports during the lean years - has also seen more hesitation in its overseas partners, even though it has few sales to Europe because of high tariff barriers.

But whether it really cut into trade "depends on the dynamics, on where the Europeans put their money," said Rob Freese of Globe Manufacturing.

The New Hampshire High Tech Council is particularly concerned about exports, which accounts for almost all of the sector's sales, said Fred Kocher, the council's president.

"If the European market slows down, so will we," he said.

Housing and construction

Other factors could undermine the recovery as well. While the housing market has stabilized, several news reports suggest another wave of nationwide foreclosures is coming, larger than the one already experienced.

However, in New Hampshire all of the foreclosure and delinquency statistics seem to be going downward, though at various degrees.

Year to date, 2011 foreclosures are 8.5 percent below the 2010 pace, auction notices are down 14 percent year over year, and delinquency rates have gone down for five quarters in a row.

In New Hampshire, housing sales have been up - but only 1.2 percent through November - and the median price has declined by 5.6 percent year to date, although Realtors President Riley said that things have picked up "substantially" in the last 60 days. (In November, however, home sales declined slightly compared to last year, by 2.5 percent, according to the association's statistics.)

Riley also found that commercial real estate is moving a bit more quickly. "They are not busting down the door, but they are walking through the door. Last year, the traffic was nearly nonexistent," he said.

This activity hasn't led to much new construction - building permits have been only slightly higher in 2011 than 2010, while the number of construction jobs fell by 600. But there has been an uptick in remodeling, reported Greg Rehm, president of Liberty Hill Construction, Bedford.

"They are going great on my end," he said, noting that his firm has hired a new carpenter and opened a new showroom. Not only are sales up 36 percent, he said, the average project size has doubled.

While some projects have been lost to financing snags, "those who can are grabbing some of the low interest rates," Rehm said.

Still, Rehm said he still sees too many former builders of new homes competing against his company for remodeling jobs. And if construction is sluggish in New Hampshire, one of the better-off states, that is not good news for the lumber industry.

"As long as housing limps along, lumber limps along," said Jasen Stock, executive director of the New Hampshire Timberland Owners Association. The price of logs is up, but that's because the ground has been so muddy few loggers can get them out of the woods. Thus mills have to pay more to get wood to make lumber they have to charge less for -- not a great situation.

Tourism and retail

It isn't as if the rural tourism industry is blooming in these rains either, though there has been some modest growth in that sector as well.

"We are not breaking any records, but we are back to where they were," said Mike Somers, president of the New Hampshire Lodging & Restaurant Association.

In the winter of 2011, tourists spent 4.2 percent more, and in the spring spending rose 5.2 percent, according to the travel barometer put together by the state Division of Travel and Tourism.

Rooms and meals tax income is virtually unchanged year to date through October, but the occupancy rate is up to 59.1 percent, from 55.8 percent in 2010, and the average daily stay and revenue per room is up 3.7 and 9.8 percent respectively, according to the barometer.

"We had a better year than last year," said John Augustine, owner of Dexter's Inn. The Sunapee bed and breakfast survived the recession with heavy discounting, but Augustine is now optimistic enough to build a heated outdoor pavilion for events and more parking for its cross-country skiing facility.

Sales at The Common Man Family of Restaurants are up 4 percent this year, said CEO Jason Lyon, "and given the economy, we are certainly going to take it."

Lyon, however, said he was worried about the lack of snow (as of mid-December) and was hoping that diners start to relax a bit more, and order the whole bottle of wine, not just a cocktail.

"They are a little more frugal with their money, more conscious of their decisions," Lyon said.

Local statistics are particularly hard to come by in the retail industry, which of course recently concluded its peak season.

The midnight openings on Black Friday appeared to have gotten things off to a good start, said Nancy Kyle, president of the Retail Merchants Association of New Hampshire.

"I think there is a pent-up demand for shopping," she said. "Buy local" is the biggest new trend in the industry, she said, benefiting Main Street, and perhaps hurting the malls, though Deb Stone, area marketing director for Simon Property Group, said that the parking lots were filled at the Mall of New Hampshire in Manchester and the Pheasant Lane Mall in Nashua.

"Compared to last year, this is excellent," she said. "But it's not the heyday, by any means."

Health care

Health care is perhaps the most unsettling sector of the economy, and not just because of the uncertainty over the future of health care reform and the continued rise in health insurance premiums. (Indeed, in both the BIA and NHBR surveys, health care was cited as respondents' biggest concern, aside from the state of the economy itself. )

Now there is the additional worry about the local health care industry itself - once one of the few secure sectors in a shaky economy. On the one hand, New Hampshire's population is aging, and the need for additional health care resources is obvious. On the other hand, there is a movement among both political parties to cut spending in health care.

According to the New Hampshire Hospital Association, state Medicaid cuts have resulted in 1,100 fewer hospital employees since June, due to layoffs, attrition and early retirement,. But, according to the Department of Employment of Security, the health care sector added 1,900 jobs in that time, with 800 of the new positions coming from hospitals.

Some of that may be due to some administrative expansion to prepare for health reform or growth in the more profitable aspects of the health care industry not related to Medicaid - such as sports medicine, sleep therapy or private home care. And some of the job reductions may not have found their way to the statistics yet.

However you look at the health care jobs numbers, the people who were laid off "certainly feel like they lost their jobs," said Steve Ahnen, president of the hospital association.

And given the whole controversy over health care funding, Ahnen said, the future of his industry "is very, very unstable."

Perhaps that could be said of the entire economy.

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Bankruptcy filings reach 3-year low

There were fewer bankruptcy filings in New Hampshire last month than at any point since January 2009, according to data released yesterday by the federal bankruptcy court in Manchester.

The 338 bankruptcy filings in November are 90 fewer than were posted in November 2010. Twenty-four of the filings were by businesses, which is the lowest monthly total this year.

"It's just another indicator that maybe the current conditions are improving a little bit," said Dennis Delay, an economist with the New Hampshire Center for Public Policy Studies.

Russ Thibeault, president of Applied Economic Research in Laconia, said "it fits a pattern where things aren't getting a lot worse anymore."

"I think the main thing is a lot of businesses have figured out how to survive in a lousy economy and those who haven't have already filed," he said. "That holds for households as well."

The drop in bankruptcies isn't specific to New Hampshire. According to a recent report from the American Bankruptcy Institute, the number of bankruptcy filings nationally dropped 8 percent in the fiscal year ending Sept. 30. George Vannah, clerk of the bankruptcy court in Manchester, said he recently received emails from his counterparts in Rhode Island and Massachusetts asking if he had also noticed a decline in the number of filings in recent months.

Republican leaders in the New Hampshire House put out statements yesterday linking the decline to their work in the Legislature this year. House Ways and Means Chairman Stephen Stepanek said "we are already seeing the fruits of our labor."

"As we continue along this path of economic vitality, we should see not only a reduction in bankruptcy filings but also an increase in private-sector jobs and new businesses forming or migrating to New Hampshire," he said.

Reports last week showed the national unemployment rate dipped to 8.6 percent, the lowest level in 32 months. New Hampshire's unemployment rate has consistently been one of the lowest in the nation during the downturn, coming in at 5.3 percent in October.

House Speaker Bill O'Brien said "the smaller number of bankruptcies is a great sign for our economy."

"There is still a tremendous amount of work to do to make New Hampshire the magnet for job growth it deserves to be," he said.

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PORTSMOUTH — It's not over til it's over, and the state and the country are still struggling to emerge from the recession — but several economic experts said the 8.6 percent national unemployment rate for November is heartening.

"I think, overall, we can say this is positive news," said economist Ross Gittell of the Whittemore School of Business and Economics at the University of New Hampshire. "This is not what economists predicted. It's better than we expected, so let's recognize that."

In October, the unemployment rate was 9 percent.

Meanwhile, Matt Katz, regional manager for staffing firm Robert Half International, said he's surprised it's taken so long for the number to drop.

"Today's news doesn't surprise me at all," said Katz, who oversees an area from the north shore of Massachusetts to the Seacoast region and Portland, Maine. "We're seeing an increased demand for help in both the temporary and permanent placement market, mostly for the degreed sector."

For instance, Katz said there is more demand for trained accountants than there are qualified workers in his region, and for workers in administrative services and human resources.

"A lot of people laid off their HR staff, so they're having to ramp up again," he said.

But Gittell said the good news needs to be tempered with the bad. The good news is that employers added 120,000 jobs nationally in November, which is in addition to 100,000 jobs in October, which "is not gangbusters, but is better than adding no jobs."

But the unemployment numbers for November also reflect workers who have simply dropped out of the labor force altogether.

"They're not looking for work anymore; they've used up their unemployment benefits and they're discouraged," Gittell said.

In November, about 315,000 people dropped out of the work force, leaving the percentage of Americans working at 64 percent, down from 64.2 percent in October. "That's a concern right now," Gittell said.

Unemployment figures for New Hampshire and other states will not be released for another several weeks. However, both Gittell and Dennis Delay, an economist with the New Hampshire Center for Public Policy, said the state jobless number may not drop as much as the national figure, but still remain relatively low.

In October, the New Hampshire unemployment rate was 5.3 percent, 3.7 percent lower than the national average. But Delay said he sees some trends in the state that may contribute to layoffs in the months to come.

For one, there's the fallout from the state cuts to Medicaid reimbursements to hospitals, which has caused a wave of layoffs at New Hampshire hospitals.

"That's having an impact," Delay said.

In a related blow, the state received about $50 million less than expected from hospitals in tax payments in November, leaving officials scrambling.

"They're delaying payments and recalculating what they owe the state," Delay said of the hospitals.

As a result, Delay expects November employment rates could reflect a bit of a drop in both health care and public sector jobs.

But Katz predicts a drop in the New Hampshire unemployment rate that will mirror the national figure — but mainly from new hires.

"We're so busy it's beginning to remind me of 2006," he said. "Of course, there's going to be more temporary placements than permanent ones. But in past recoveries, the (temporary jobs) sector has grown first. In my eyes, this time around the permanent sector is keeping pace."

Katz said he is very optimistic.

"I've seen the best of times and the worst of times, and what I'm seeing is recovery mode," he said. "The first quarter of 2012 looks good. The New Hampshire market is booming."

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A Regional Approach to Public Policy in New Hampshire

Dec. 2, 2011

by STEVE NORTON AND DANIEL BARRICK

The people of NH have long cherished the notions of strong local identity and governance. With our annual town meetings, sprawling Legislature, and town-run police and fire departments and select boards, policymaking is often a homegrown affair here.

At the same time, New Hampshire has a well-defined statewide image: “Live Free or Die.” “Tax-Free New Hampshire.” These are just two examples of the well-defined statewide images that shape public debates and define how outsiders view us. From a policy perspective, a statewide focus often makes sense, including education funding and tax policy.

But there’s another, less frequently used, approach to public policy in NH: viewing the state as a network of distinct regions defined by geography and demographics. Many of the pressing issues likely to shape the state’s future–questions of transportation, housing, economic development and water use–play out across town and city borders. These issues often affect populations in different ways across the state. And NH’s residents face disparate challenges and opportunities depending on what part of the state they call home. An approach to policymaking that accounts for this fact will likely lead to more informed decision making.

But aside from isolated, occasional examples, NH’s regions generally play a small role in conversations about the state’s future. This is not to argue against large-scale programs. Statewide economic development, environmental or education programs can all be valuable policy tools. But a more fine-tuned regional approach can complement broader visions for NH.

Why does this matter? One example: Recent census data shows that NH is one of the wealthiest, best-educated states in the nation. But when you disaggregate data on median income and educational attainment by region, stark differences become apparent. The less likely a region is to have residents with a college degree, the lower its median wages. Shouldn’t our approach to economic development acknowledge these disparities across the state and seek to address them?

Many policy topics would benefit from this approach, some of which are discussed in the NH Center for Public Policy Studies’ recent report “What is New Hampshire?” With a declining statewide student population, conversations about school consolidation obviously require an analysis that extends across municipal boundaries. The relationship between economic development, housing, and transportation is another topic that begs for a regional analysis.

The White Mountains region, for example, saw greater population growth than any other part of the state over the past decade. Much of that increase was driven by retirees lured to amenity-rich communities such as Conway, Lincoln and Woodstock. The economy in this region is dominated by tourism: accommodation and food service, recreation, entertainment and the seasonal home market. But the White Mountains region also faces a challenge in accommodating the younger workforce that serves the tourists and retirees who fuel its economy. This is not an issue that any individual town can solve on its own. Ensuring that the region has the right mix of housing stock for those workers in coming years requires a coordinated approach from multiple communities and will benefit from the collaboration of businesses, municipal leaders and nonprofits.

How can such a regional approach best be carried out? There already exists several forums for regional action in the state. The most obvious is the network of regional planning commissions, which are charged with advising local communities on issues of transportation and planning, among others. But, like cities and towns, these agencies derive their authority from the state, often face funding challenges, and lack any policy-making power.

The state’s Executive Council is another body that divides the state into a series of regions. But the Council, too, lacks policymaking authority and was largely designed as a check on the Governor.

Regional planning commissions can help identify important issues and guide local thinking. Chambers of commerce and economic development councils can spur discussions about regional planning, and town and city leaders can reach across their own borders to work with their neighbors. But if the state truly wants to encourage a more regional perspective in its policymaking, these efforts need to be strengthened. That may mean giving the existing regional bodies more regulatory and policy-making authority, or giving them a greater voice in legislative debates, where so much of the state’s policy is designed and enacted.

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November Revenues In Doubt

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Time will tell how outlets perform

By JAKE BERRY

Staff Writer

Nashua Telegraph

MERRIMACK – They are building it. Now the question is, will they come?

By the next holiday season, area shoppers will have a sparkling new selection of stores available at the Merrimack Premium Outlets center, currently under construction off Exit 10 of the F.E. Everett Turnpike.

When it opens, likely in June, the $100 million shopping center will consist of 100 upscale clothing, home goods and other retail outlets, offering products at factory rates. But, with the general retail market still suffering under the weight of the national recession, critics may wonder if this is the time or the place to open a large scale outlet center.

Project managers and retail industry analysts alike answer in a single word: Yes.

“Outlet shopping has become more integrated into consumers’ shopping routines, which bodes well for the opening of Merrimack Premium Outlets,” said Michele Rothstein, vice president of marketing for the project developer, Premium Outlets, which has projected as much $140 million in annual sales from the center.

“Outlet shopping is a different mentality,” added Nancy Kyle, president of the Retail Merchants Association of New Hampshire, which represents 800 businesses across the state. “Outlets become a destination. … They seem to do well regardless of the economy.”

Even during a recession, these claims play out in the sales numbers.

Retail sales continue to suffer around the state and across the country, analysts said. In New Hampshire alone, several major retail stores, including Building 19 in Nashua and Lowe’s Home Improvement in Manchester, have recently closed their doors. And, across the state, the retail industry has lost about 2,000 jobs in the last year alone, according to Dennis Delay, an economist for the New Hampshire Center for Public Policy.

But, while these numbers continue to fall, industry analysts report that outlet stores have either maintained or increased sales around the country. Across the map, general retail sales rose an average of 1.4 percent from April 2010 to April 2011, according to a recent consumer tracking study by the NPD Group, an international industry company. By comparison, outlet sales jumped more 17.9 percent, more than 10 times as high, during that time period, the study concluded.

“Consumers are much more careful today with their shopping dollars,” said Jack Plunkett, president of Plunkett Research, a Houston-based market research company that focuses on the retail industry.

“They want to feel like their money is well and wisely spent. … But they also want selection, and when they can get it, they want a brand name,” he said. “An outlet mall, if it is a good mall, it’s well positioned for today’s market.”

These trends are reflected locally, according to outlet managers around the region.

Officers at the Tanger Outlets in Tilton, the closest outlet center, did not return calls for comment for this story, but stores at the Kittery Outlets in Maine have thrived during the recession, according to Lynn Smith, the center’s marketing manager.

To a one, each of the center’s 120 stores have either maintained sales or grown over the last few years, Smith said earlier this month.

Some stores, like Liz Claiborne clothing, have closed because the parent company either shut down or downsized, she said. But, in total, the outlets have maintained their yearly average of about 5 percent turnover, meaning about five or six stores close per year. And those vacancies still tend to fill quickly, Smith said.

The Kittery outlets, located just across the state border from Portsmouth, currently have two vacancies, which is about average with or without a recession, she said. By contrast, more than 9 percent of stores in traditional retail malls remain vacant, according to recent study of the country’s 80 largest markets published by Reis Inc., a New York-based real estate research company.

“You hear what’s going on around the country and we just haven’t seen a lot of that,” said Smith, of the Kittery Outlets. “People are still shopping. They’re just making smarter decisions.”

From Kittery to Tilton to North Conway, outlet shoppers generally don’t hesitate to drive a distance to find their deals, according to industry analysts and business leaders. And the Merrimack center’s location along a major traffic artery only benefits it further, they said.

Positioned strategically between Manchester and Nashua, the outlets will draw heavily from New Hampshire’s two largest population centers, according to Chris Williams, president of the Greater Nashua Chamber of Commerce.

And with the Massachusetts border less than 20 miles away, Bay State shoppers will likely flood the area to take advantage of the absence of a state sales tax, which will drive prices down even further, Williams said.

“When you consider the proximity of Merrimack to the Massachusetts border, I think you’ll certainly see a lot of people from northern Massachusetts coming up here,” he said.

“But conversely, you’ll also have a lot of residents in the central and northern parts of the state who will now come down to Merrimack. … They’ll come from all over. This is going to have a very tremendously positive impact on our retail economy.”

Jake Berry can be reached at 594-6402 or jberry@nashuatelegraph.com.

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Union Leader: Census numbers suggest more poverty

By TED SIEFER
New Hampshire Union Leader
New U.S. Census numbers suggest more people are struggling to make ends meet in New Hampshire than the official poverty rate would lead one to believe.

New Hampshire has long had one of the lowest poverty rates in the country — in 2009, it was the lowest at 7.9 percent. However, an alternative poverty assessment released by the Census this month, the Supplemental Poverty Measure, indicates that New Hampshire's poverty rate in 2009 was 10.4 percent, higher than seven other states, including Maine and Vermont.

This information did not come as a surprise to some of the dozens of people who lined up on a recent evening at the food pantry at New Horizons for New Hampshire in Manchester, where the number of people seeking shelter and food has been steadily climbing this year.

“I think people just aren't aware what's really happening out there,” said Melissa, who came to the shelter with her daughter, a student at Memorial High School. She did not want to give her full name.

Even though her husband is working, Melissa said the family is struggling. “We still need a little extra help. I think everyone is close to the edge. All of my friends are struggling to make it week to week,” she said.

Still most livable?

The higher poverty estimate could take the sheen off one of the state's more widely touted statistics. Low poverty, coupled with the state's high median income, were key factors cited by the CQ Press when the publishing company again ranked New Hampshire the country's “Most Livable State” this year, a designation that has also been trumpeted by Gov. John Lynch.

The Supplemental Poverty Measure is meant to offer a more thorough picture of poverty in the United States, which has been measured by a set of criteria dating back more than four decades, before the implementation of many programs aimed at reducing the rate.

The SPM takes into account the value of government assistance, such as food stamps and housing subsidies, on one side of the ledger, while factoring in expenses, such as housing and out-of-pocket medical costs, on the other.

“The current measure does not take into account variation in expenses that are necessary to hold a job and to earn income — expenses that reduce disposable income,” the report notes.

The report also raises the threshold for poverty, from $22,113 a year for a two-adult, two-child family in 2010 by the official measure, to $24,343 by the SPM.

The report revealed that groups that have been the greatest beneficiaries of anti-poverty programs, notably children and African-Americans, had lower poverty rates than the official Census estimate. Poverty was higher, however, for a broad swaths of the population, in particular the elderly, married couples and those living in the West and Northeast.

Housing costs, and more

The state level data, showing a difference of 2.5 percent between the official and supplemental poverty rate in New Hampshire, came in a separate analysis.

Trudi Renwick, who heads the Census' Poverty Statistics Branch, cautioned that the state-level analysis was based on only one year's worth of data, and that poverty estimates typically rely on two to three years of data. She did note, however, that the difference in New Hampshire between the official and supplemental rate was “statistically significant.”

Housing costs

Public policy experts said it wasn't surprising that New Hampshire would fare worse in a measure of poverty that included the value of public assistance and local costs of living.

“When you include the cost of living in New Hampshire, for housing and utilities, you dramatically increase the number of people having difficulty making ends meet, which is really what we're talking about when we measure poverty,” said Steve Norton, the executive director of the New Hampshire Center for Public Policy Studies. “I think New Hampshire has always fared well in measures like poverty and median income, but that can hide variations that exist with respect to both the age of populations and geography.”

Jobs, not public aid

As for the prospect of the Granite State losing its distinctive status, Charles Arlinghaus, the president of the Josiah Bartlett Center For Public Policy, a free-market think tank, said any statistic that says one state is the best is “dangerous.”

“Saying we have the lowest poverty in America, there's a temptation to say everything is fine,” Arlinghaus said. “Well no, if you're a public official, you should still look at that.”

But Arlinghaus said the answer was not to provide a greater share of public assistance, but to redouble efforts to grow the economy. “Even if we were 50th in poverty, we can still do better. We still want more jobs, good jobs,” he said.

For now the Supplemental Poverty Measure is only for research purposes; only the official poverty rate will be used to designate federal aid and for other policy decisions.

In the meantime, service providers are reporting that demand is rising. At New Horizons for New Hampshire, nights spent in the shelter have been up 12 percent this year and food pantry use is up 14 percent, according to Charlie Sherman, the center's executive director.

Sherman said he doesn't need new statistics to tell him people are struggling. “What we see now on a daily basis are people who have jobs — but they may be new jobs, with significantly less pay and benefits,” he said. “The first thing I tell them is don't apologize. You're a victim of the economy.”

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"The median income of a middle class family went down $2,100 from 2001 to 2007."

Joe Biden on Thursday, October 20th, 2011 in speaking at New Hampshire’s Plymouth State University

Biden says middle income earners lost ground before the recession

Vice President Joe Biden visited a New Hampshire university Oct. 20, 2011, to promote President Barack Obama’s American Jobs Act before an audience whom he called "the 9/11 generation."

Speaking to a full house inside Plymouth State University’s lecture hall, Biden talked about the need to restore the middle class and to bring jobs back to America. He said middle-income-earning Americans have been "under siege," long before the economic recession hit.

"In the previous decade, before the current recession, the middle class was getting killed," said Biden. "During that period between 2001-07, productivity of American workers was up 20 percent, but median income of the middle class dropped by $2,100 during this time."

Did the median of middle-income households really take a $2,100 hit before the economy hit the fan?  We looked into Biden’s claim to find out.

First we contacted Biden’s staff to find out which figures they were using to come to the $2,100 decrease in the median income for middle-class households.

Tobin Marcus, Biden’s deputy economic policy adviser, told us the vice president was referring to real median household income for working age households. "We’re looking at the core wage-earning households as opposed to retirees," Marcus said.

"Working age households" are typically considered houses headed by someone between the ages of 25 and 54, and the median income was chosen to represent middle income wage earners.

Biden’s office cited the Census Bureau’s Annual Social and Economic Supplement to the Current Population Surveys for year-ending data for 2000 and 2007.

They said they compared inflation-adjusted numbers, using the "annual average" increase column of the Bureau of Labor Statistics’ Consumer Price Index.

We took a look at their numbers, and their calculations checked out.

To be sure, we contacted Dennis Delay, an economist with the New Hampshire Center for Public Policy Studies and a New Hampshire State Forecast Manager for the New England Economic Partnership.

He confirmed the calculations Biden’s campaign provided.

"I looked at the data sources, and they appear to be correct, and the data calculated correctly," Delay said.

Delay then pointed us to a report by the Economic Policy Institute which used the same data. From 2000-07, the Institute said the real median income of working age households fell from $61,574 in 2000 to $59,460 in 2007—a decrease of $2,114.

The White House Task Force on the Middle Class cited a "weak labor market" and "anemic job growth of the 2000s" among some of the problems that contributed to the approximately 3.4 percent decline in the median of middle class incomes over the seven years leading up to the economic recession.

"Clearly median inflation adjusted income fell much faster during the recession (2007 to present)," Delay said. "But the fall in that indicator during a period of economic expansion (2000 to 2007) is very troubling. I don’t believe any other period of economic expansion saw a commensurate decline in median inflation adjusted income."

Our ruling:

Vice President Biden said the median income of the middle class dropped by $2,100 from 2001-07, and the numbers check out. We rate Biden’s claim True.

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Economist sees slow job growth through next year

Stagnant economic and job growth will linger through next year, Dennis Delay, New Hampshire forecast manager for the The New England Economic Partnership, said Thursday.
By DENIS PAISTE
New Hampshire Union Leader
MANCHESTER - Stagnant economic and job growth will linger through next year, Dennis Delay, New Hampshire forecast manager for the The New England Economic Partnership, said Thursday.

“This is an economy in danger of stalling to a point where the risks of recession, probably not for this year but into next year, have been elevated in New Hampshire,” Delay said in a telephone conference with reporters.

Ross Gittell, the partnership’s vice president and New England region forecast manager, said overall economic growth needs to hit 3 percent to see a significant decline in unemployment.

“Not until really 2013 are we going to see 3 percent in overall economic growth, and 1 percent in employment regionally to see overall unemployment come down,” Gittell said.

Both Delay and Gittell will join the New England Economic Partnership’s 2011 Fall Economic Outlook Conference Friday morning at UNH-Manchester.

New Hampshire’s seasonally adjusted unemployment rate was 5.3 percent for October 2011, compared to 9 percent nationally.

“Job creation slowed in September 2011, to about 5,000 jobs per year, half the pace seen in the months of June through August of 2011,” Delay said. “Any acceleration in private-sector job creation looks to be partially offset by public sector job losses.”

Delay is also an economist with the N.H. Center for Public Policy Studies.

Delay forecasts New Hampshire job growth of 1.2 percent this year, dropping to 0.8 percent in 2012, before growing 1.3 percent in 2013, 1.8 percent in 2014 and 2.4 percent in 2015.

“The New England and New Hampshire outlook is strongly affected by factors beyond our control including the European debt crises,” Gittell said. Weak consumer confidence is another such factor, he said.

Gittell is also James R. Carter Professor of Management at the University of New Hampshire.

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N.H. GOP jobs promises narrowly focused

CONCORD, N.H. — When Republicans took control of the House and Senate from Democrats last year, they promised New Hampshire voters they would pass legislation resulting in more jobs.

But after 10 months in power, the results are inconclusive despite Republican leaders' use of the bully pulpit to claim they have already made good on that promise. The best early measure of success — the unemployment rate — has instead risen due partly to as many as 1,000 university, government and hospital layoffs attributable to the Republican-passed state budget. Several hundred more are taking buyouts or retiring early rather than being laid off, according to the state, university system and hospital association, which are keeping track of the budget's impact on workers.

House Republican Leader D.J. Bettencourt, who regularly emails reporters comments on a variety of subjects, was quick to claim credit when the state's jobless rate hit 4.9 percent in April, down from 5.5 percent when Republicans took control in January.

"It appears we are starting to bear the fruit of our hard work in the New Hampshire Legislature," Bettencourt said in May.

After a steady decline from a peak of 6.7 percent in January 2010, when Democrats were still in charge, the jobless rate hit a low of 4.8 percent in May, but then started rising again.

When the rate returned to 4.9 percent in June, Republican House Speaker William O'Brien called it a one-time jump while government was scaled back "to the appropriate size" through budget cuts. But the rate has continued to climb and was 5.4 percent in September.

At the request of The Associated Press, House and Senate leaders produced 55 law changes they say are evidence they created an environment conducive to businesses creating jobs.

Businesses give mixed reviews to the law changes with at least one notable exception of a broadly applied law modifying how much small business owners can claim as income before facing business taxes. The law sets $50,000 as the amount business owners can pay themselves as income without justifying it to the state if they are audited.

Most of the other laws are applied much more narrowly.

Two potentially significant changes don't take effect until 2013 and 2014 respectively. One lets businesses offset losses against future profits; the other doubles the time businesses can apply the losses.

Tim Sink, president of the Greater Concord Chamber of Commerce, it is premature to assess the impact. He credits the GOP with not raising taxes on business to pay for state spending in the state budget and instead making deep spending cuts.

"It sends a message that we're going to live within our means," he said.

David Juvet, senior vice president of the New Hampshire Business and Industry Association, agrees there was a heightened awareness of business concerns, but he said not all the changes were positive. He cited a $230 million budget cut affecting hospitals that has resulted in layoffs and other cost-cutting measures. Juvet expects higher private insurance rates will make up the difference.

"It affects every business in the state that chooses to provide health care to employees," he said.

Many of the new laws affect regulations for specific and sometimes small groups, such as eliminating an unenforced requirement for restaurants to shape and color the butter substitute oleomargarine to distinguish it from butter and margarine. Oleomargarine, butter and margarine are labeled according to their ingredients. Some have Democratic sponsors and many passed with bipartisan support with little opposition.

One eliminates an unenforced provision on filing fees by political candidates.

"How does that create jobs?" questioned House Democratic Leader Terie Norelli. Norelli, who was House speaker during last four years when Democrats were in charge, said many of the bills on the GOP list are so-called housekeeping measures that come up every year to clean up outdated and conflicting laws.

Dennis Delay, an economist with the New Hampshire Center for Public Policy Studies, said it is difficult to say if jobs will be added since there isn't a lot of analysis on the new laws' potential impact.

"Most are targeted to industries that are a small part of the New Hampshire economy," he said.

For example, one allows street vendors to sell miniature flags and flowers.

"That's certainly a reduction in regulation, but it doesn't affect the broad retail economy," he said.

Republicans kept their campaign promise to end a surcharge on motor vehicle registrations ranging from $30 to $75 to put more money in business owners' and consumers' pockets. But the loss of the $90 million the surcharge would have raised for highway projects over the two-year life of their budget also has drawn criticism from the construction industry.

"I think that's going to hurt the whole economy. Companies looking to relocate here look for a good transportation system," said Gary Abbott of the Associated General Contractors of New Hampshire.

On the other hand, the New Hampshire Grocers Association won a 10-cent per pack cut in the cigarette tax it said would increase sales at border convenience stores since surrounding states charge higher prices.

"It is more business-friendly than in the past," association president John Dumais said of the GOP Legislature.

Soon after New Hampshire lowered its tax manufacturers raised wholesale prices 9 cents per pack putting in doubt whether the higher revenues would be realized. Through October, state tobacco revenues lagged almost $3.5 million behind projections.

Unlike their House counterparts, Senate Republican leaders maintained a lower profile.

"We haven't tried to be flashy. We haven't tried to be partisan," said Senate Republican Leader Jeb Bradley of Wolfeboro.

Bradley is given credit for shepherding into law significant changes to regulations governing construction along the state's rivers and lakes. Without the changes, shoreland construction would have come to a halt.

"If there weren't a few big homes being built on the lake, the building industry would be totally in the tank," said Bradley.

Joe Skiffington, owner of Skiffington Homes in Center Harbor, said the law not only allowed him to hold onto his existing workers, but allowed him to add four people. He started work on two houses because of the change and hoped to start more.

Skiffington credits Bradley, but also the state, the home builders association and Democrats who worked on the bill.

"I wouldn't give credit to either side. I'd give credit to both," he said.

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Trying to define ‘New Hampshire Advantage’ is elusive

By ASHLEY SMITH

Telegraph Writer

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.

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Center compiles census data for public interest

And for extra credit: Are there more native-born Granite Staters or transplants?

You can find the answers (tie, Henniker, Sanbornton, transplants) and more from new interactive maps created from census data by the New Hampshire Center for Public Policy Studies. The Concord-based non-profit is using its website, nhpolicy.org, to deliver analyzed census data a couple of ways this year.

There is a traditional 120-page report that drills down on most everything from property taxes to charitable giving to annual hospital admissions per region. And new this year is a series of maps that lets user click on their towns and see how they compare to their neighbors.

Choose Concord, and you'll see the city has a higher percentage of college graduates than the state average, but a median household income that's lower. The median age is just under the state average, too: 38.7 versus the state's 41.1. Next door in Canterbury, the percentage of college graduates is higher and so are the paychecks. And if you thought Bow had it good, you're right: more than half the population has a college degree or higher and the median household income is $97,000.

Dennis Delay, an economist with the New Hampshire Center for Public Policy Studies, hopes people will use the information a few ways. The maps make it fun and easy to learn something quickly about your town. The report, he hopes, will give local and state leaders, policy makers and budget writers something more reliable than anecdotes and speculation to work with.

"Our mission as an organization is about providing better data to people so they can make more informed choices," Delay said. To that end, he has taken the report and the maps on the road for presentations to local leaders and hopes to get his usual calls from town officials as they write budgets for town meeting season.

Delay thinks the state's reliance on property taxes for revenue will be a particularly hot topic this year. With the real estate market crashing, property values have declined and will likely continue in that direction, Delay said. That will force cities and towns to cut budgets drastically or increase the property tax rate significantly - or both - to hold even, Delay said. Delay said his organization does not advocate for or against the property tax, but rather looks at what it means for different parts of the state.

Concord has more tax-exempt property (17.4 percent) than any place in the state except for Durham, where there is the university and nonprofits, Delay said. So residents here have a higher property tax burden. On the other hand, the property tax is working better for towns in the White Mountains or Lakes Region, where many out-of-staters own second homes. Those towns are essentially exporting their tax burden out of the state, he said.

"We are entering period now where people are going to look at the property tax really closely," Delay said.

That 120-page report looks at other demographic data as closely.

Concord has about as many Democrats as Republicans, with about 30 percent each. The remaining 40 percent of registered voters are undeclared.

Violent crime and property crime in Concord are higher than the state average, but Concord spends less per person on police and fire services than the state average. (It's $320 a person in Concord and $331 statewide.)

Similarly, Concord spends less per person on health and welfare than the state average ($22 versus $25) and has more hospital admissions per 1,000 people than the state average (113 versus 101.)

The greater Concord area does better than the state average when it comes to charitable giving ($2,853 per taxpayer versus $2,711) but it can't hold a candle to the Dartmouth and Lake Sunapee region, which gives $5,618 per taxpayer.

Put together and analyzed, this kind information helps local and state leaders see where tax dollars come from and where they can be best spent. For example, the data shows a correlation between higher education, better wages, and more investment in local communities, Delay said.

And it shows the other side. Franklin, Belmont and Pittsfield have among the lowest percentage of college graduates in the greater Concord area. They've also got the lowest median household income and the highest poverty rates.

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At last count, 38,810 New Hampshire residents were listed as unemployed in August. That is 4,630 fewer people than a year earlier but still 10,590 more than in August 2008, just before the nation’s economy dipped sharply.
By MICHAEL COUSINEAU
New Hampshire Sunday News
CONCORD - Martha Bouley, caught up in mass state-employee layoffs in June, has fallen behind on her mortgage and carries a tote bag of resumes, ready to talk to anybody with a job lead.

Robert Dion, looking for a way to pay his mortgage at age 68, can’t find a job offering more than $12 an hour.

And Donald Robichaud, whose household income already had taken a hit, searched for work without his 14-year-old, rusting car because it flunked state inspection.

“My nose is just above water,” Robichaud said while puffing on a cigarette outside the state Department of Employment Security office on Thursday.

These are the voices of the jobless.

By last count, 38,810 New Hampshire residents were listed as unemployed in August. That is 4,630 fewer people than a year earlier but still 10,590 more than in August 2008, just before the nation’s economy dipped sharply.

Concord economist Dennis Delay cited state figures showing 12,000 more non-farm jobs in the state in August compared with the same time last year.

“When the economy’s really humming, you might see twice as much,” said Delay, who works at the New Hampshire Center for Public Policy Studies.

On Friday, the federal government announced the U.S. jobless rate for September remained unchanged from August’s 9.1 percent rate. New Hampshire’s unemployment rate measured 5.3 percent in August. The state’s September rate will be released Oct. 18.

Amy Innarelli, a staffing specialist at Monroe Staffing in Manchester, hosted an open house at the Concord unemployment office looking to fill 20 to 25 jobs.

“The economy has picked up,” she said. “Staffing agencies ... are busier these days.”

But that hasn’t helped Bouley, who was laid off from her data entry job at the state Division of Motor Vehicles.

“So many people are looking,” she said. “Just so many people out with the economy.”

The Pembroke resident has applied to at least 30 to 40 companies and landed eight interviews but no job offers.

“I have no (health) insurance,” she said. “I can’t afford it.”

She’s grateful the state had hired her back for 17 hours a week, but “it’s not going to cover the bills.”

People laid off this year are eligible for fewer weeks of unemployment compensation than in past years.

During parts of 2009 and 2010, people could collect up to 86 weeks of unemployment. That was scaled back as the state’s unemployment rate dropped, according to Anita Josten, research analyst at the state’s Economic and Labor Market Information Bureau. Today, people can collect up to 60 weeks.

Dion, who lost his full-time job a month ago at the Brinks armored car company, said he’s seeing job openings, but the pay is much lower than his previous pay.

“Because there’s a lot of unemployed people ... they can hire ’em” for lower pay, the North Sutton resident said.

Robichaud said he can’t afford to work for $10 an hour, either. He’s waiting for his first job interview since losing his job at an electronics firm in Manchester on March 31.

“It’s mentally stressful every day,” said the Northwood resident. “Every day, what’s going to happen to me today?”

He cautioned workers frustrated at their current jobs and thinking about looking elsewhere.

“They better think twice before complaining about the job they have,” Robichaud said. “They should cope with it, deal with it. If they take that chance, they’re putting themselves at a bad risk.”

Monica, a Concord nurse with 35 years’ experience who gave only her first name, has been without work for more than a year. She’s had two interviews but no job offers.

“The more experience you have, the worse off you are,” she said. “They want to hire some idiot at the lowest possible rate to do your job.”

She took in a roommate to help with the mortgage payments. “We’ve already sold everything of value,” she said.

Monica wondered how badly her layoff has hurt her excellent credit score. “I can’t even be brave enough to look it up,” she said.

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So far, that’s helped former Massachusetts Governor Mitt Romney, who has made New Hampshire the cornerstone of his bid for the Republican nomination and dominates polls in the state, the site of the party’s first primary.

Concern about the economy will be raised at a debate tomorrow sponsored by Bloomberg News and the Washington Post at Dartmouth College in Hanover, New Hampshire. The debate, featuring Romney and seven other Republican presidential candidates, will be the first of the 2012 campaign to focus solely on the economy. The session will be broadcast on Bloomberg Television, Bloomberg Radio, WBIN-TV in New Hampshire and on Bloomberg.com and WashingtonPost.com.

Fourth Lowest

New Hampshire’s August unemployment rate of 5.3 percent was almost 4 points below the national average of 9.1 percent. Only North Dakota, Nebraska and South Dakota had lower rates.

Among the five states now scheduled to start the Republican nominating season, New Hampshire has the lowest jobless rate. Iowa, where the caucuses will begin the process in December or early January, had the eighth-lowest rate in the nation for August, at 6.1 percent.

Republicans are more likely to confront greater economic anxiety in South Carolina, Nevada and Florida, where the August rates were 11.1 percent, 13.4 percent and 10.7 percent.

“We have done fairly well weathering the recession,” said Adrienne Rupp, vice president of the Business and Industry Association of New Hampshire. “We are hearing from businesses that they are seeing more activity and thinking about starting to hire employees.”

Still, New Hampshire’s unemployment rate has ticked up in recent months, from 4.8 percent in May. Before mid-2008, the state’s rate was typically around 3.5 percent.

And it lost about 16,000 jobs to China from 2001 through 2008, proportionally more than any other state, according to a study by the Washington-based Economic Policy Institute.

‘Pinching Pennies’

“We didn’t get hit as hard,” said Dennis Delay, an economist at the New Hampshire Center for Public Policy Studies, a nonpartisan research group based in Concord. “But relative to New Hampshire’s historical rate of unemployment, it’s still higher than we are used to seeing.”

It’s too high for Steve Millett’s liking.

“It’s not looking very good right now,” said Millett, 41, a telephone company lineman from the town of Jefferson who was shopping over the weekend at the Mall of New Hampshire. “People are pinching pennies and business is slower.”

Arlinghaus of the Bartlett Center said New Hampshire voters may be less volatile than those in more economically troubled states.

‘Less Anger’

“There is possibly less anger here than there is in some places, but I think some of that has to do with the Tea Party movement not being a new thing here,” he said. “The notion of government reform and economic issues has always been strong here, so it doesn’t seem as different from previous years. These issues have been at the forefront in New Hampshire for decades.”

Monique Lindquist, 39, a hospital human resources worker who lives in Goffstown, said she frequently sees the damage unemployment has done to job applicants.

“I see other people who have been looking for work a long time,” she said.

New Hampshire’s population, now 1.3 million, grew 6.5 percent between 2000 and 2010, according to census data. That was less than the national gain of 9.7 percent. Yet Delay, the economist, said the state benefits from tens of thousands of commuters who live in New Hampshire and travel to jobs in the Boston area.

Low-Tax State

There are only about 30 publicly traded companies domiciled in the state, according to data compiled by Bloomberg. They had a combined market value of $7.3 billion at the end of trading Oct. 7, less than that of Hormel Foods Corp. (HRL) of Minnesota.

Delay said smaller companies are attracted to the state’s educated workers and relatively low costs, which he said includes one of the lowest tax burdens in the nation. New Hampshire’s state and local tax burden is about 8 percent of income, ranking it 44th in the U.S., according to the Washington-based Tax Foundation, a nonpartisan research group.

“The manufacturers that we still have here have adapted,” he said. “We don’t have large physical plants and large companies that are located here.”

The state’s companies, such as Lisbon-based New England Wire Technologies, tend to make components that go into things, rather than final products, Delay said.

“It makes you a little lighter on your feet,” he said of the state’s diversified economy, which also includes business services, education and tourism.

Liking Romney

Many of those who work in that low-tax, diversified economy have shown an affinity for Romney, from neighboring Massachusetts. His backers say Romney’s business experience, which includes working as the head of the private-equity firm Bain Capital LLC, gives him a boost.

“They know Romney,” said Tom Rath, a former New Hampshire attorney general and a supporter. “They like his background and feel he is credible.”

A Granite State Poll, sponsored by WMUR-TV and conducted by the University of New Hampshire Survey Center, that was released Oct. 7 showed Romney leading among the state’s Republicans, with support from 37 percent; businessman Herman Cain came in second with 12 percent. The poll, conducted Sept. 26 through Oct. 6, had a margin of error of plus or minus 5.3 percentage points.

Rath said New Hampshire’s unemployment rate “looks better than it feels,” adding that there are many “underemployed” workers in the state.

“What you have here is a high degree of angst,” he said. “There is a great concern here that this president, for whatever reason, has not been able to direct this economy in a positive direction.”

‘Kind of Stalled’

President Barack Obama won New Hampshire and its four electoral votes in 2008, although his popularity has fallen since then.

Two-thirds of New Hampshire adults disapprove of Obama’s job performance on the economy, according to a Sept. 25-29 poll by American Research Group Inc., of Manchester. The survey had a margin of error of plus or minus 4 percentage points.

David Fink, 47, a welder who lives in Manchester, said the depressed housing market has kept him from refinancing his home because he doesn’t have enough equity and it isn’t worth as much as it used to be.

“It seems kind of stalled,” he said of the housing market. “It keeps me from doing the things I would like to do.”

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Valley News editorial, 10/5/11

The Graying Of N.H.: Preparing for the Elder Boom

***

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New Hampshire, along with the rest of the country, will face a tough economy with limited job opportunities for years, according to Dennis Delay, one of the state’s leading economists.

“At this point, the economy’s on pretty thin ice,” Delay said. “It has stalled out, for all intents and purposes. You can see that in the job statistics; we haven’t added a lot of jobs in the past few months, nationally or locally.”

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Study finds Lakes Region has more in common with North Country than with southern tier

LACONIA — The latest statistical profile of the state drawn by the New Hampshire Center for Public Policy Studies highlights differences among regions, placing the Lakes Region alongside the Great North Woods and White Mountains as the more aged and less affluent regions of the state.

The report divides the state into nine regions from north to south — the Great North Woods, White Mountains, Lakes Region, Dartmouth/Lake Sunapee, Monadnock, Seacoast, Greater Concord, Greater Manchester and Greater Nashua. 

The Lakes Region consists of the 11 municipalities of Belknap County and 22 others in Grafton and Carroll counties. Between 2000 and 2010 the population grew from 123,288 to 132,169, or by 7.2-percent, more than the pace of 6.5-percent set by the state. 

While the population of the entire state is aging, the Lakes Region is aging at a relatively faster pace.  The number of those younger than 18 shrank 8.7-percent, from 29,214 to 26,662, the third highest percentage decrease among the nine regions, to represent a fifth of the regional population, nearly even with regions to the north and less than regions to the south.

The average age of the population reached 45.6 years, about a year above the median age for the state and the number aged 65 and older amounts to 16.6-percent of the population, a share exceeded only by the two northernmost regions — the Great North Woods and White Mountains.

Weekly wages of $681.47 and adjusted gross income (per taxpayer) of $52,897 in the Lakes Region are 20-percent and 11-percent below the state average respectively and above those only of the two northern regions.  Likewise, the 10-percent poverty rate is the third highest among the regions, exceeded only by the two regions to the north. And, only the Great North Woods and White Mountains, have a smaller portion of college graduates than the 26-percent  of the Lakes Region's population.

Despite the  similarities with its northern neighbors, the Lakes Region differs in one significant respect by have the fourth highest property values, measured by dollars per acre, among the nine regions. But, the gap between the $28,886 per acre in the Lakes Region and the $82,219 in the Seacoast, which ranks behind Manchester and Nashua, merely highlights the disparity between the southern and northern parts of the state. The relatively high property values reflect the number of  seasonal properties, which represent 29-percent of the of the housing inventory in the Lakes Region.

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Report warns of care costs with older NH population

By DAVID BROOKS Staff Writer

Nashua Telegraph

An army of aging baby boomers coupled with New Hampshire’s recent inability to attract young people is creating a “silver tsunami” that will send the state’s portion of health-care costs through the roof within a decade or so, a new report warns.

“We are in our economic prime right now. Now is the time to be thinking about this, not when we’re in it,” said Steve Norton, executive director of the New Hampshire Center for Public Policy Studies and author of the report titled “Silver Tsunami: Aging and the Health-Care System.”

“Our goal is to accelerate the rate at which people are having these conversations,” he said at a Wednesday morning press conference. “If we do not start grappling with the question of long-term care management, and a complex set of political and financial relations that exist now, we are going to be in a very difficult situation 10 years from now.”

By coincidence, the report was released the day after the Kaiser Family Foundation estimated that private health-insurance rates around the country went up 9 percent in one year. A shift of more people onto Medicare, the federal health insurance for the elderly, could accelerate this problem because it would reduce the number of private customers who can absorb costs.

A shift to Medicare will also be a financial problem for most New Hampshire hospitals, including the two in Nashua, because Medicare pays less that the actual cost for most treatments. Hospitals cover part of that loss through charges to private insurance.

“Silver Tsunami” says the graying of New Hampshire’s population – a trend that has been going on for two decades and seems unlikely to change soon – will place a variety of strains on the state budget. For example, it noted that the number of elderly inmates in prisons and jails “will more than double” in 20 years.

“It’s possible that the increase ... will require the construction of a ‘nursing home behind walls.’ How should that factor into larger conversations about correction reform in New Hampshire?” it asks.

It also points to another issue: New Hampshire’s health-care workers reflect the general population, meaning they are also relatively old and facing retirement, leading to questions about how to staff the increased health-care needs of the elderly.

The biggest cost increase from an older population will involve health care, since state governments must pay a portion of Medicare costs.

Norton had no specific recommendations to battle the problem, aside from a few items such as research-and-development tax credit for businesses to create jobs, and support for public education because good schools attract younger families. At the press conference, he said demographic pressure almost certainly means that new methods must be invented to deliver the same level of health care for less money.

The report’s forecast appears least alarming for Hillsborough County, because the home of Nashua and Manchester is expected to do better than most of the state in attracting or keeping young, working adults.

Even here, however, the percentage of population older than 65 is expected to almost double in the next two decades, from 12 percent to 21 percent. Age 65 is when people are eligible to switch from private health insurance to Medicare, which uses up state and federal funds.

The percentages will be much starker elsewhere. Notably Carroll County, which includes the town of Conway and retirement communities in the Mount Washington Valley, will have almost 49 percent of its population age 65 or higher. In the North Country, at least a third of the population will be eligible for Medicare, the federal health-care insurance.

Because Hillsborough County has more than a third of New Hampshire’s total population, however, even smaller percentages of elderly here translate into lots of people.

“In percentage terms, it’s not so bad for Hillsborough County, but in just sheer numbers, that is where most of the aging people are going to live,” he said.

Long-term care is an unusual cost for New Hampshire because it is handled by counties, rather than the state or municipal governments, through the county nursing home and other factors.

The demographic trends shaping New Hampshire’s future include our relative lack of children – New Hampshire has one of the highest percentages of white people in the country and one of the highest average incomes, white American families and well-off families tend to have relatively few children – and our relatively high percentage of baby boomers, those in the 45 to 65 age bracket who will be retiring soon.

Baby boomers tend to be relatively well off and are more likely to have private health insurance through long-established connections with employers.

Norton said the issue needed to be faced because New Hampshire’s status could shift, just as it did starting in the 1980s.

“New Hampshire was a benefactor of ‘the Massachusetts Miracle,’ the technology boom. We went from being well below the national median for income to being well above it. It could go the other way if we don’t have the things that have made us an economically fertile place,” he said.

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For information: Steve Norton, executive director, 226-2500, snorton@nhpolicy.org. Link to PDF version of report available above.

Coming in 2020: New Hampshire’s “Silver Tsunami”

CONCORD, N,H, September 28, 2011 -- Some forces of social and economic change, such as recessions, are readily apparent once they happen, but are hard to predict. Others are more subtle and harder to detect. An aging population, an example of the latter, is a slow-moving but profound engine of change that will reshape New Hampshire over the coming decade.

By the year 2020, New Hampshire’s shift towards an increasingly older population will reach a peak. And by 2030, nearly half a million Granite Staters will be over the age of 65, representing almost one-third of the population. This trend will influence nearly every critical policy debate, perhaps none more so than health care. Released today, the Center’s latest report, “New Hampshire’s Silver Tsunami,” analyzes the potential impacts of this demographic shift on the state’s health care systems.

According to the report’s findings, the move towards an older population in New Hampshire will:

• reshape the state’s private insurance market
• force a reassessment of the public long-term-care system
• put increased pressure on the state’s health care providers
• exacerbate existing problems in recruiting and retaining a health care workforce.

Though many of the potential impacts of this shift are missing from the current public policy conversation, there is still time for policymakers to address them. But, as the Center’s report finds, doing so will require a coordinated effort from elected officials, health care leaders, and others.

At the heart of this analysis is a projection of health care spending by the major payers (Medicaid, Medicare and private insurance) that can be attributed solely to the aging of the state population.

We also explore how an aging population may impact the state’s workforce and the state budget. An aging population will likely place new financial pressures on Medicaid, a shift that will have a big impact on future state finances.

However, many other areas of state government will be affected by New Hampshire’s aging population and its impact on health care, including the Department of Corrections and the Department of Administrative Services. Among the impacts of this change on the state’s health care system:

An older population will reshape the way New Hampshire pays for health care. Our simulations of health care spending show Medicare, the federal insurance program for those over 65, assuming a larger share of total health care expenditures. But because Medicare reimbursement rates fall short of the actual cost of providing care, this shift will put pressure on the health system to provide more care with less money. This, in turn, will likely accelerate the increase in premiums for private insurance, as providers look to offset loses from Medicare reimbursements.

Medicaid’s financial focus will shift. Currently, Medicaid allocates 25 percent of its total medical spending to those over 65. Assuming no significant changes to the services provided to that population, that percentage will increase to more than 50 percent by 2030. As the population ages, the share of Medicaid expenses associated with long-term-care will increase very quickly.

Aging will affect New Hampshire’s regions in very different ways. Demographic trends across the state vary considerably. Therefore, the impact of aging on the health care system needs to be understood differently from region to region. Current population projections indicate that the share Coos County’s over-65 population, for example, will grow by 38 percent by 2030. This shift towards an older population would seem to strain the region’s health care system. However, it may actually stabilize the financing of the system. As Coos County’s population ages, an increasing share of residents will be eligible for Medicare, which provides cost-based reimbursement to Androscoggin Valley Hospital, a critical-access hospital. In contrast, Carroll County, in which much of the aging of the population is driven by retirees migrating to the region, will likely experience a different effect.

Aging will play an increasing role in state budget policy. The aging of the population will have a profound impact on many areas of the state budget, including the purchase of health insurance for state employees and retirees, as well as for the state’s prison population. One example: In less than 20 years, the number of elderly inmates will more than double. The state, and its taxpayers, will be responsible for paying for their health needs. It’s possible the increase in this segment of the prison population will require the construction of a “nursing home behind walls.” How should that factor into larger conversations about corrections reform?

Do not forget the aging workforce. New Hampshire physicians are already significantly older than the nationwide physician population. And as the share of the population that is not working increases, it will raise concerns about who will take care of this aged population. What role should this trend play in New Hampshire’s long-range economic development plans?

Free copies of the report are available from the Center's website www.nhpolicy.org.

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Studies warn of revenue loss without expanded gambling

New Hampshire would see revenues head south if it does not follow Massachusetts into the world of expanded gambling, according to two reports aired Tuesday.
By TOM FAHEY
State House Bureau Chief
CONCORD — New Hampshire would see revenues head south if it does not follow Massachusetts into the world of expanded gambling, according to two reports aired Tuesday.

A House Ways and Means subcommittee working on a gambling bill to allow two casinos with 5,000 slot machines each heard the reports that say the state will lose money if it resists the lure of slot machines and commercial casinos.

Slot machine payoffs are now illegal, and other casino-style gaming is limited to charitable organizations, most of which are handled by professional game operators.

Lottery Commission executive director Charles McIntyre said state revenues would suffer what he called “a material loss” if New Hampshire did not respond to a Massachusetts legalization of slots.

“It would have a significant impact on our (Lottery) revenues, and an even more significant impact on charitable game revenues.” McIntyre said. The Massachusetts Lottery, where McIntyre used to work, will suffer more than 10 percent loss, close to $100 million, if three casinos open there, he said.

One recent Lottery survey found that people who gamble at bingo are far more likely to head to casinos, mostly in Connecticut.

The New Hampshire Center for Public Policy Studies said that if Massachusetts follows through with plans to open three resort casinos and New Hampshire does not, it would cost the Granite State roughly $73 million in direct gambling, spending and social costs.

If New Hampshire allows even one major casino in response to Massachusetts, the net gain here would be about $48 million, Center executive director Steve Norton said, based on estimates that the state would see $114 million in revenue.

That figure does not include licensing and other fees. The proposal now on the table would collect a $50 million fee from each of two companies that are granted licenses.

Norton noted that gambling of all kinds has declined during the recession, both in state lotteries and in the casino industry.

Millennium Gaming, which has the option to develop a casino at Rockingham Park in Salem, estimates the state would take in $140 million if it were in competition with Massachusetts.

None of the gains or losses discussed would occur overnight. Construction of any casino would take at least 18 months, and the expense of social costs such as divorce, bankruptcy, domestic violence, alcoholism and crime, would take months to develop after a casino opened, Norton said.

A relatively small portion, less than 2 percent, of the population is likely to become problem gamblers, suffering addiction and other social ills. The state would see as many as 3,000 pathological gamblers as a result of expanded gaming, Norton said.

Lottery and the Center disagree on what portion of New Hampshire residents already gamble at existing casinos. Norton said roughly 20 percent of state residents go once a year while the Lottery survey puts the figure at 45 percent of the general population, and 53 percent of Lottery customers.

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by STEVE NORTON

Union Leader: Housing market stabilized, but lacks buyers - 09-21-2011
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Housing summit: Market stabilized, but lacks buyers

New Hampshire's housing market has stabilized at about where it was a decade ago, but factors such as the state's aging population are putting a damper on a resurgence, experts told a Housing Summit Tuesday.
By DENIS PAISTE
New Hampshire Union Leader
MANCHESTER — New Hampshire’s housing market has stabilized about where it was a decade ago, but factors such as the state’s aging population are putting a damper on a resurgence, experts told a housing summit on Tuesday.

“We are pretty much back to the inflation-adjusted year 2000 price for housing in the year 2011,” said Dennis Delay, an economist for New Hampshire Center for Public Policy Studies.

Factors holding back a recovery in the housing market locally include a lack of young families with children, demographer Peter Francese said.

“Only one out of five households in the state is a married couple with children,” Francese he said.

“They’re the backbone of our school systems, and when four out of five households do not have any kids in the schools that becomes an issue in school bond issues, school budgets and so forth. We need more families with children, and I hope we get them,” Francese said.

The summit, co-hosted by the Business and Industry Association of New Hampshire and the New Hampshire Housing Finance Authority, was held at the Radisson, Center of New Hampshire in Manchester.

Kendall Buck, executive vice president of the Home Builders and Remodelers Association of New Hampshire, said that at the end of July, New Hampshire housing permits were being issued at the same level as in 2007.

“We are quite a bit less than last year, but one must remember that last year there was a bump because of the new homebuyer tax credit,” he said.

“There are many, many fewer young adult households, 35 to 44 and under the age of 45 than there are 45 to 54 and beyond,” Francese said, “and that decline is driven by the fact that those young adults simply left the state.”

Delay disagreed that all of the disparity in younger households was caused by people leaving the state. “The rate of migration from Massachusetts into New Hampshire declined quite a bit,” he said.

“On net, we actually lost migrants. ... Part of it is that people in Massachusetts had even higher prices than we did, and essentially can’t sell their home, so they can’t migrate to where there is economic opportunity.”

Workforce housing

Dean Christon, executive director of New Hampshire Housing Finance Authority, said 50 or 60 communities have adopted workforce housing or inclusionary zoning ordinances.

“All the dynamics of the housing business ... create a challenge,” Christon said. “Unless you believe that the economy in general is going to stay the way it is forever, which would be really unfortunate, unless you believe that we’re not going to see job growth or population growth in the future and therefore not see more demand for housing, we need to have an infrastructure of rules and policies in place that will allow (builders) to respond to market demand appropriately when it comes forward.”

Rosemary M. Heard, president of CATCH Neighborhood Housing in Concord, said the organization has proposed workforce housing in Bow, and sees a need for rental housing.

The Bow Highlands project, with 20 two-bedroom apartments, was completed last year. There are about 12 children.

“I think the need for rental housing is growing,” she said. Citing a National Low Income Housing Coalition study, Heard said a person has to earn $19.76 an hour full time to be able to afford a two-bedroom apartment at Fair Market Rent of $1,028 a month.

“We’re hovering right at the 100 percent occupancy level,” Heard said. The price of gasoline is also driving people to closer to where they work, putting more pressure on affordable housing, she said.