NH Public Policy
New Hampshire Center for Public Policy Studies


Rural Transformation & Education

Executive Summary

Date: February 27th, 2018

What is New Hampshire? 2018

Executive Summary

Author: Steve Norton, Greg Bird, Katie Sullivan

Date: December 18th, 2017

What is New Hampshire? was created to help raise the level of public debate in the Granite State through the dissemination of objective information about who we are as a state. Our hope is to paint a clear picture, through simple graphs and text, of where New Hampshire has been, where it is today, and where it might be heading in the future.

NH Economic Outlook 2018

Executive Summary

Author: Greg Bird

Date: November 29th, 2017

The New Hampshire economy should continue to make strides in 2018. With initial jobless claims (a proxy measure for layoffs) steadily declining and at an extraordinarily low level, the financial condition of New Hampshire businesses appears solid. Additionally, various economic indicators (consumer confidence, median household income, unemployment) signal that household finances are healthy and improving.

The challenge of finding labor will intensify. Currently, every industry within the Granite State is finding it difficult to fill open job slots, due partly to low unemployment. Also, with many workers in their late 50s and early 60s, the economy will experience a wave of people who will partially or totally disengage from the workforce.

Consequently, outside of a significant pickup in attracting out-of-state working age people to move and work here and/or convincing many current Granite Staters who work out-of-state to work back home (neither is assumed in our baseline forecast, though are upside risks), New Hampshire employers will essentially run out of people to hire. Therefore, economic growth is anticipated to grind to a halt around 2019.

Federal Income and Estate Taxes: A New Hampshire Perspective

Executive Summary

Author: Greg Bird and Eric Herr

Date: November 21st, 2017

Congress will iterate through multiple versions of proposed tax legislation over the next weeks and months. The effects of each proposal on individual households will depend on specific circumstances and may vary significantly—even for households with similar incomes.

Given that, what are the effects of the existing tax code on New Hampshire residents? IRS data from New Hampshire federal income 2015 tax filings sheds some light on that question.

Greg Bird's presentation: Winning Workforce Strategies

Executive Summary

Author: Greg Bird

Date: November 9th, 2017

Center Economist Greg Bird's presentation on demographic trends affecting New Hampshire workforce recruitment and retention and potential opportunities to address those.

NH Education Finance Presentation to Eastern States Legislative Fiscal Officers

Executive Summary

Author: Greg Bird

Date: September 7th, 2017

Center Economist Greg Bird's presentation on the Center's latest research on the results of the NH's decades-long education funding policy.

New Hampshire's Changing Medicaid Program: Enrollment and Expenditures

Executive Summary

Author: Steve Norton

Date: August 31st, 2017

Although the US Congress has made little progress in their quest to repeal, replace, and/or reform the Affordable Care Act (ACA), there is interest in changing current law in ways that will impact New Hampshire. Factions within both the House and Senate have argued for the end of federal participation in recent expansions in Medicaid coverage. Also, Congressional proposals created per capita block grants for Medicaid, designed to slow federal expenditure growth.

This piece attempts to put the Medicaid program within the context of other health insurance coverage, and provide an assessment of how coverage changes could impact the current financing of the state’s Medicaid program. We review longitudinal data on caseload and claims from the Department of Health and Human Services, along with expenditure data from the Centers for Medicare and Medicaid Services (CMS) to shed light on current caseloads as well as the potential implications.

The findings are not surprising. The ACA resulted in significant increases in Medicaid coverage (33% increase). The vast majority (75%) of this uptick was a function of the expansion of Medicaid to adults (known as the NH Health Protection Plan), specifically those individuals between the ages of 19 and 64.
These coverage expansions have predictably resulted in notable rises in expenditures, in the form of payments to managed care companies.

Between 2013 and 2015, total Medicaid expenditures grew by 43%, with federal dollars (extra $407 million over the period), more so than state dollars (added $109 million over the period), shouldering most of the burden. In state fiscal year (SFY) 2016, the NHHPP resulted in $386 million in payments to provide coverage to enrollees of the program.

Update on the NH Economy

Executive Summary

Author: Greg Bird

Date: August 30th, 2017

At its core, an economy is the total of all the buying and selling (transactions) that take place between businesses, consumers, the financial system, and the public sector. Standard economic indicators suggest our economy continues to steadily grow at a healthy pace.

Our private sector, which is responsible for nearly 90% of the production and employment in the Granite State, continues to sell more and more goods and services to our residents as well other Americans and foreigners, in fact nearly $3.4 billion worth of additional output from 2015 to 2016 to be precise.

This additional business for our firms has translated into them employing more workers and paying out more wages, $1.3 billion in extra wages to be exact, which has enabled households, overall, to feel confident about their financial situation, as evidenced by survey data from the Business & Industry Association and UNH, and allowed them to unleash that confidence and income into more and more consumer purchases.

Norton to Step Down as Center Executive Director

Executive Summary

Date: August 24th, 2017

August 24, 2017 -- After 12 years as executive director of the New Hampshire Center for Public Policy studies, Steve Norton has decided to step down from his job. He’ll be leaving at the end of the month. Norton wants the opportunity to take a pause in his career, reflect on his goals, and balance his professional and family responsibilities.

"This was entirely Steve’s decision," said Center Board Chair Eric Herr. "In the board’s view Steve has done an exceptional job as both the organization’s head and its public face. He is respected by both his board and policy makers throughout New Hampshire," Herr said. 

The Center’s board plans to appoint an interim director and take a more active role as it searches for a new executive director. "The board is fully committed to continuing the Center’s mission," according to Herr. 

Greg Bird continues as the Center’s economist. Board Chair Eric Herr will be the Center’s interim spokesperson on institutional matters.

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About the Center

The New Hampshire Center for Public Policy Studies is an independent, non-profit, non-partisan organization that pursues data-driven research on public policy. Its work includes research on the state budget, public school funding and health care finance.

It's Board of Directors includes Eric Herr, Chair; Dianne Mercier, Vice Chair; Catherine A. Provencher, Treasurer; Michael C. Whitney, Secretary; David J. Alukonis; John Garvey; Katherine M. Hanna; John D. Herney; David Hess; Donnalee Lozeau; James Putnam; Todd I. Selig; anddirectors emeritus William H. Dunlap; Sheila T. Francoeur; Donna Sytek and Brian F. Walsh.

Hospital Community Benefit and Market Changes in New Hampshire

Executive Summary

Author: Steve Norton

Date: July 17th, 2017

New Hampshire hospitals have financial responsibility for almost $5.7 billion in total assets as of 2014, the most recent year for which complete audited financial data is available.  Of that $5.7 billion, almost 10% of those assets have been a part of hospital merger activities (Memorial, Upper Connecticut Valley, Weeks, Littleton, Androscoggin, Alice Peck Day, Lakes Region and Franklin hospitals). Catholic Medical Center, Huggins Hospital, and Monadnock Hospital (accounting for another $500 million in community assets) and Wentworth Douglass Hospital ($500 million) recently had merger requests before the Attorney General’s office. Other conversations – principally Mary Hitchcock and Elliot Hospital – represent more than $2 billion in additional assets potentially affected by merger activities. Together, these affiliation activities account for 2/3rds of the assets of New Hampshire’s 24 non-profit hospitals.    

The Charitable Trusts Unit in the New Hampshire Attorney General’s office has responsibility for monitoring these affiliation activities, and is required to ensure that:

“The assets of the health care charitable trust and any proceeds to be received on account of the transaction shall continue to be devoted to charitable purposes consistent with the charitable objects of the health care charitable trust and the needs of the community which it serves” - Section 7:19-b

To that end, the Attorney General’s office requested a review of existing data and information on the types and level of community benefit currently being provided in the state, and by the 4 hospitals currently engaged in merger discussions – Wentworth Douglass, Catholic Medical Center, Monadnock and Huggins.  In addition, this analysis provides information on what the academic literature suggests the impact of hospital consolidation could be on community benefit. 

Major Findings   

The NH Department of Justice and the Internal Revenue Service offer a rich – if relatively imprecise – body of data on community benefit that could be used to both increase the transparency of conversations regarding community benefit and provide a means for holding hospitals accountable for both the level and type of community benefit provided.   However, hospitals are given wide latitude in reporting community benefit, which makes comparison across hospitals and over time difficult.  Providing clearer instructions to hospitals on reporting requirements could result in data which the attorney general could use to track community benefit across merging hospitals.

The literature regarding hospital consolidation suggests policy makers should be cautious about claims that mergers would automatically increase value in the health care system (either through improvements in price, quality or both).   There is a robust – albeit dated - literature suggesting that reductions in competition and hospital consolidation result in increases in price. 

More recent research, however, suggests that not all mergers are the same and that more recent mergers may differ in key respects to those that have historically been evaluated.   Specifically, the nature of the markets, clinical service changes, and geography matter on the impact on price.   This emerging literature suggests that mergers involving hospitals in different markets and geographically far from one another have no impact on prices.  The literature on the impact of consolidation on quality and other community benefit provision is less robust, generally suggesting no relationship between consolidation and quality or the level of overall community benefit provision. 

Finally, specific to the mergers currently before the Attorney General’s office, the Charitable Trusts Unit will have a difficult time assessing the impact of mergers without additional information not currently provided.  As mentioned, the literature regarding hospital consolidation – and associated changes in market competition – suggests that the claims regarding such activities – reductions in prices and increases in quality, for example – are sensitive to definitions of markets and services that would be affected.  These are not currently defined in the documents provided to the Attorney General’s office. 

Policy makers and boards of directors will have a hard time understanding the potential impact of a merger without additional information on the actual plans for integration, including the degree of clinical integration that might occur.  The Attorney General’s office, likewise, would find it impossible to judge – as it is required to do – the impact of mergers without clearer information on how the merger will actually impact clinical services. 

NH's General Fund Appropriations: The Committee of Conference

Executive Summary

Author: Steve Norton

Date: June 21st, 2017

New Hampshire now enters the final phase of its budget process. The Committee of Conference has passed a budget and it now moves onto the House of Representatives. 

While the Governor, House and Senate have struggled over the past 4 budget biennia to balance the budget since the Great Recession, this budget is different.  Revenues have grown significantly more quickly than anticipated and, more importantly from a budgetary perspective, more quickly than spending has increased.   Budget makers now face a situation where they will have the option to fill the state’s rainy-day fund, strategically invest in state services, and/or provide tax relief to property owners or businesses. 

How has this situation happened?  Growth in revenues has exceeded all expectations.  Between fiscal years 2015 and 2016 (which ended in June of 2016), revenues grew by almost 7%, driven by torrid growth in business taxes (16.3%) and real estate transfer tax receipts (14.5%) and a 6.9% increase in the state’s tax on meals and rooms.   And FY 2017?  Through May – the last month for which we have data – revenues appear to be continuing to increase, albeit at a slower rate.   Growth in the first half of 2017 is being driven by meals and rooms and real estate transfer tax receipts. 

In this analysis, we look at long term trends in appropriations of general funds (those funds driven largely by the state’s tax structure).   For this analysis, we focus on HB 1 – the legislation which clearly delineates and defines state spending.  We then turn to an analysis of the recently passed Committee of Conference budget.   

The analysis shows that the Committee of Conference-approved budget represents a departure from post Great Recession budget trends, investing heavily in health and human services, which accounted for almost two thirds of the growth.   Despite this growth, general fund appropriations are only now reaching the levels that existed prior to the Great Recession. 

Education Finance in New Hampshire: Headed to a Rural Crisis?

Executive Summary

Author: Steve Norton and Greg Bird

Date: June 19th, 2017

Over the past two years, the New Hampshire state legislature has continued to rethink how it distributes state resources to fulfill its constitutionally mandated responsibility of providing an adequate education for all students. The most recent policy discussions have been driven by the fact that most communities are seeing a decrease in the number of school-age children.

Most education aid distributed by the state is on a per-pupil basis. If the number of students increases in a community, so does the amount of aid. To limit the state’s financial risk, the legislature capped the growth in education aid that a community could receive from one year to the next. In 2016, the city of Dover brought a lawsuit (and won) against this ceiling on education funding for those communities that were experiencing significant increases in students.

And then came an objection from a coalition of communities—many of whom were in the original Claremont education lawsuit in 1997 that led to the current education funding formula —which are concerned about a 2015 legislative provision that phases out stabilization grants over the next 25 years. Stabilization grants were designed to hold communities experiencing declines in enrollment, or other changes that resulted in declining state aid, financially harmless. These education funding grants represent about $151 million of the approximately $564 million in non-property tax based state aid distributed to schools in fiscal year 2017.

In this paper, we try to answer a few questions. First, have the fundamental goals of the original 1997 Claremont education lawsuit been met? The short answer is, it doesn’t appear so. There is still wide variation in local tax rates as well as per pupil expenditures, a leveling of which was at the heart of the Claremont lawsuit. There is still more than a two-fold variation between those communities that spend the most on educating students and those that spend the least. Variation in rates for local property taxes is even greater.

We also simulated the impact of the current system and current demographic changes on the level of aid provided by the state. By FY 2022, our simulations suggest the state will be paying approximately $16 million less in state aid than in the current year (FY 2017).

Who loses if the state continues with the current system? Rural, property-poor communities, in both demographic and economic transitions, are those that will experience the most significant reductions.

Colebrook, Hinsdale, Greenville, Lancaster, Berlin, Northumberland, and Newport are likely to see a reduction of more than 10% in the aid they receive from the state between 2017 and 2022. Assuming nothing else changes, this means that these communities will have to increase their tax rates by as much as 10%—even before allowing for cost increases in other areas.

Given the challenges rural New Hampshire is facing, these results are not surprising. Yet, it does raise important questions about the state’s role in helping these communities transition to what we might call a new education normal—smaller schools, consolidated districts, new models of learning—and what role the state should play in that transition.

Full Report >

School Finance Infographic >

What is New Hampshire? State Budget

Executive Summary

Date: May 1st, 2017

In this video segment of What is New Hampshire? Center Executive Director Steve Norton outlines the state's financial position and the 5 important issues driving this year's budget debate -- all in less than 3 minutes.

Click here to view on YouTube >

NH Brings Home Transportation Report Card

Executive Summary

Author: ASCE

Date: April 13th, 2017

The American Society of Civil Engineers (ASCE) recently released its latest series of state infrastructure report cards. The organization and its local chapters grade states on a span of public infrastructure elements ranging from airports and roads to drinking water and solid waste disposal. ASCE's last report was issued in 2011.

While New Hampshire's grades are generally in the C and D range (in line with most other states), there are a few bright spots. For example, twenty-five municipally-owned bridges and 16 state-owned structures were eliminated from the so-called "Red List" since ASCE's 2011 report.
Red list bridges are considered to be structurally deficient or in poor condition and require frequent inspection and maintenance. Of the 3,482 bridges in the state, 13%, or 492 currently fall into the red list category. This compares to 9.1% nationally.
The report states that nearly 80% of all state-owned bridges were constructed prior to 1980. More than 650 of these bridges are over 75 years of age. And between 2010 and 2015, the average age of state-owned bridges increased from 52 to 56 years. A typical bridge design life is 50 years, and therefore, the average bridge in New Hampshire now has reached or exceeded its planned functional life.
The report rates the condition of bridges nationally as C+ with New Hampshire's rated at C-.

Conditions of roads improving

On the roads and highways front, the report notes that New Hampshire has seen an increase in vehicle miles traveled since 2011 and large investments have been made in the Interstate 93 corridor and Spaulding Turnpike.
Currently 47% of the state's road network (federal, state and municipal) is rated in good condition, 24% in fair condition, 22% in poor condition and 7% in very poor condition --which indicates some improvement since ASCE's last report.
ASCE rates the condition of roads nationally as D, with New Hampshire's rated at C-.
New Hampshire passed a 4.2-cent-per-gallon gas tax increase in 2014, which helps to offset some of the costs from 20 years of deferred investment. However, the report points out that as vehicles become more energy efficient and are able to drive more miles per gallon, gasoline taxes should realistically be increased to keep up with road maintenance and construction.
While not in the report, it should be noted that Governor Sununu proposed using surplus state revenues (after topping off the Rainy Day Fund) to create an "Infrastructure Revitalization Fund" to provide grants to local communities for road, bridge, drinking water and school building costs -- many of the areas that the report indicates that the state needs to address. Both the NH House and Senate also believe the state needs to increase its investment in infrastructure.
To review ASCE's New Hampshire infrastructure report card:

What is New Hampshire Healthcare?

Executive Summary

Date: March 16th, 2017

In our first video chapter of What is New Hampshire? Steve Norton outlines 3 important facts about healthcare's place in the New Hampshire economy and its public policy.

Click here to view on YouTube >