How To Ruin A State Economy In One Easy Step

Why is it the first thing government thinks of doing in case of a budget shortfall is to raise taxes? It rarely occurs to The-Powers-That-Be to cut spending in order to roll expenditures back enough to match what income there is. It happens at town, county, state and federal level all too often. What's worse is when there's also a soft economy and tax revenues fall off. Somehow government thinks that pulling even more money out of the economy will make things better. Every time government has done that it only makes the situation worse and revenues fall even farther. It sets up a vicious cycle. I've seen this before.

Back in the mid to late 70's, the Commonwealth of Massachusetts was suffering from a growing tax burden and the erosion of its economy as a deep recession caused high unemployment. Every time the Commonwealth raised taxes, unemployment rose. Companies, large and small, left the state, looking for greener (and less expensive) pastures. The old joke back then went “Would the last person leaving Massachusetts please turn off the lights?”

We're seeing the same thing again, thirty years later, but this time in Michigan.

It's no fun to kick a state when it's down – especially when the local politicians are doing a fine job of it – but the latest news of Michigan's deepening budget woe is a national warning of what happens when you raise taxes in a weak economy.

Officials in Lansing reported this month that the state faces a revenue shortfall between $350 million and $550 million next budget year. This is a major embarrassment for Governor Jennifer Granholm, the second-term Democrat who shut down the state government last year until the Legislature approved Michigan's biggest tax hike in a generation. Her tax plan raised the state income tax rate to 4.35% from 3.9%, and increased the state's tax on gross business receipts by 22%. Ms. Granholm argued that these new taxes would raise some $1.3 billion in new revenue that could be "invested" in social spending and new businesses and lead to a Michigan renaissance.

Not quite. Six months later one-third of the expected revenues have vanished as the state's economy continues to struggle. Income tax collections are falling behind estimates, as are property tax receipts and those from the state's transaction tax on home sales.

Gee, they raise taxes during a weak economy, and what happens? Their revenues fall. No surprise there. Jobs and residents have voted with their feet, with twice as many people moving out of Michigan as are moving in. As taxes go higher the trend will only steepen. They're stuck in a vicious cycle, apparently unable to do the one thing necessary to turn things around: cut spending.

The same thing could happen here in New Hampshire. The legislature passed a biennial budget which included a 17.5% increase in expenditures. There's only one thing they forgot.

How to pay for it.

The budget's already over $50 million in the red, with a projected deficit of $200 million before the end of the biennium. The legislature did raise some taxes, but the revenues projected to be raised fell short. Other tax revenues have also been below projections. The governor did order a hiring freeze and directed all department heads to cut their budgets in an effort to stanch the slow of red ink.

A few tax-and-spend groups have been calling for a state sales or income tax to make up for the shortfall, but we all know the legislature will find new an interesting ways to spend the money and the budget will still be out of balance. So they'll raise them...and revenues will fall, leaving an even bigger revenue shortfall. It's that vicious cycle all over again.

The only answer is to cut spending and roll back the tax increases imposed at the beginning of the biennium. The only thing the state legislature here needs to do is look to Michigan to see how well its program of increasing taxes is working. Maybe they'll get the message. But that's not likely.

Memorial Day Weekend - Saturday

It's near the end of the first day of Memorial Day weekend and, despite reports in the media, it appears traffic and visits to the Lakes Region is heavy, though maybe not as it has been in past years.

The family was here at The Manse to celebrate my Dad's 75th birthday, and every one of my siblings said the traffic was quite heavy, particularly those making the trip up from the Boston area. Deb said the local supermarket was mobbed, as was the farm stand at the farm where BeezleBub works.

Tomorrow I will brave the waters of Lake Winnipesaukee, as I will be launching The Boat in the morning. It will be interesting to see if high gas prices will have any effect on boat traffic.

I'm betting it will.

A New Hope

It appears the state of New Hampshire is finally waking up to the problem the lack of workforce housing has been causing and doing something about it. Despite the housing boom that took place over the last few years, very little of the housing built over that time was for low and middle income families in towns and cities where they were needed. Without this kind of housing potential employees cannot find a place to live anywhere near where they are hoping to work. Employers are finding it difficult to fill jobs because affordable housing isn't available. With increasing oil and gas prices local housing is becoming even more important.

One of the roadblocks to such housing has been the cities and towns themselves, many of which made it difficult to build anything but senior housing or more upscale single family homes. The only way developers could build that type of housing was to take the municipality to court to force them to comply with the state's anti-snob zoning laws and court decisions. Most developers won't spend the time or money to do this, taking on less controversial jobs and developments. Unfortunately that leaves far too many people without a place to live and employers with jobs going unfilled. If the problem gets bad enough, employers will relocate to places where they can fill jobs. That's nothing anyone in New Hampshire wants. Now it appears the state is finally taking steps to alleviate this problem.

The New Hampshire Senate on Wednesday agreed to some improvements by the House to Senate Bill 342 that now goes to Gov. John Lynch for his signature.

"We have been working for years to pass this kind of legislation to remove barriers that have made it difficult to expand the availability of workforce housing," said Sen. Martha Fuller Clark, D-Portsmouth, the prime sponsor of SB342. "This bill is long overdue and we should all be proud of its passage."

SB342 embraces a major goal of the state's Business and Industry Association, which identified expanded opportunities for workforce housing as a top priority this year.

"The lack of varied housing poses a threat to our state's economy by making it difficult to expand our workforce or attract new businesses," said Senate President Sylvia Larsen, D-Concord. "Our workers are the backbone of our economy and we need to ensure they have decent and affordable options for housing."

This is something that was long overdue.

It's been a problem in the Granite State for the last 20 years or so, where one town after another enacted zoning ordinances making it difficult, if not impossible for developers to build the kind of housing needed. Too many towns believed the old canard about every family moving into town added two kids to the schools, and hence to the tax burden. Therefore senior housing and higher end homes were preferred because in the town's view they didn't burden them with more kids or could afford the higher taxes that more than offset the cost of more kids entering the school system. But the towns were wrong and in the long run they hurt themselves and the businesses located there and in nearby towns.

Now there's a chance to change that and make sure the Granite State's economic future is a good one.

Eight New Hampshire Towns To Build FTTH Network

It looks like a group of towns in New Hampshire has decided not to wait for Fiber To The Home to come to them, something unlikely to happen any time soon. Instead they've banded together in an effort to build their own network.

Town officials in western New Hampshire are planning a trip to southern Virginia to get a firsthand look at a municipal fiber optic network similar to the one they'd like to deploy.

The network could provide communication, entertainment and data-transfer services in the region.

WCNH.net comprises eight towns - Orford, Lyme, Hanover, Enfield, Springfield, New London, Sunapee and Newbury - that seek to bring about construction of a fiber optic network that would be operated by a third-party service provider.

It's something other towns should consider if they want to have a 21^st communications infrastructure.

Fiber To The Home will to more than provide very high speed data communications, telephone, and video services to residents. It will also attract new businesses and new residences.

This is something Gilford and the other towns in the Lakes Region should seriously consider.

Open Office Rocks!

While this has nothing to do directly with either Gilford or New Hampshire, I figured it was still germane to the New Hampshire way. In other words it's about being frugal with your money. We do tend to be frugal here (but not the legislature, that's for sure).

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Glenn Reynolds made mention of Open Office, a free office suite that I've been using for the past few years. While the first version I downloaded and installed some years ago, Open Office 1.1, wasn't exactly perfect, it was far better than nothing at all. Since then it has improved greatly to the point where I prefer it over Bill Gates' flawed Microsoft Office.

I presently use Open Office 2.4 on both my Windows and Linux machines and I find it to be far more useful to me than MS Office (I use MS Office at work). While it doesn't have all the bells and whistles of MS Office, it does do everything I want or need it to do, and does it well. But the one biggest kudo I have for Open Office is that it doesn't try to help me or automatically format a document I'm working on when I don't want it to. That is one of Microsoft Office's biggest annoyances, that it “knows better” what I want to do than I do. I've lost count of how many times I've had to undo something MS Office insisted I wanted to do even though I had no intention of doing what MS Office did for me.

Other than a few obscure functions available in MS Office, I haven't found anything that I do in MS Office at work that I can't do in Open Office. In many cases Open Office does it better.

These days I steer friends to Open Office if they're in the market for an Office suite. If nothing else the price is right: Free!

(Cross posted at Weekend Pundit)

A Guide To Country Living - Part I

NOTE: This post originally appeared in my main blog, Weekend Pundit, a few years ago after a number of folks commented to some posts I made about the differences between rural and urban dwellers. I've updated the original posts, of which this is the first. I've also added links to other blogs covering different aspects of some of the topics I'm covering.

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It appears that once again I must delve into the mysteries of how urban dwellers and Flatlanders can adapt to life in a rural state, particularly New Hampshire. Much of what I'll cover also applies to Maine and, to a lesser extent, Vermont. You're on your own when it comes to other rural states, particularly those down south. Each area of the country has its own rules when it comes to country living, but there are also some universal rules that apply no matter which state you finally end up living in.

One thing most newcomers have to get used to is something called neighborliness. Bogie pretty much covers the subject of newcomer cluelessness in her tale about a new neighbor, who happens to be the living definition of 'clueless'.

It seems the person in question, before moving in, is going to have a security system installed. This is bad. It implies that he doesn’t trust the neighbors. This is a place where doors are not locked, even when people are gone on vacation. My customer [...] even leaves her front door wide open when no one is home.

This in a state with a very low crime rate. Usually the people we have to worry about aren't our neighbors, but people from somewhere else. (I lived up in the town of Plymouth for a few years and I never locked the door to my home the entire time I lived there. Not once.) It makes one wonder what this new neighbor might be up to. On the other hand, maybe it's the urban dweller paranoia, understandable considering some states where these former urban dwellers hail from make it very difficult to legally defend oneself in their own homes.

There are a lot of topics about 'country living' I can cover, many of which I've briefly written about before. But sometimes you have to repeat the lesson more than once before the information sinks in. Here's a list of Do's and Don'ts of country living. These are in order of descending importance, kinda sorta:

Once you've made the move to your new town, don't feel bashful about introducing yourselves to your neighbors, assuming they haven't already introduced themselves while they helped you unload the moving van. That's assuming of course that you actually have neighbors. In some places here in the Granite State your nearest neighbor might be a half mile or more down the road.

Make the acquaintance of the Town Clerk, Tax Collector (many times it's the same person), the Police Chief, the Fire Chief, and at least one of the Selectman (or Town Councilor, depending upon the form of town government). This helps grease the skids and let's them know you're not too snooty to mingle with the locals.

Go to the dump. Many small towns have no garbage pickup and it's up to you to haul you're own trash to the dump/transfer station/etc. Don't hire someone else to do it for you because people will think two things – 1) you're too damn lazy or snobbish to do it yourself; and 2) you really aren't interested in town politics/social activities/etc. The one thing you have to realize is that in many small towns 90% of all town business is conducted at the dump, not the weekly Selectman's or Budget Committee meeting. If you want to find out what's going on in town, the dump is the place to go. (I have to admit to some backsliding on this one, though recently I've started hauling my own trash and recyclables again. Frankly, it's now cheaper for me to haul my own than to pay someone else to do it, high gas prices and all.)

Read the weekly local paper. This is another place to find out when and where some of the social activities will be taking place. Also take close note of the Want Ads. You'll be amazed at some of the stuff you'll find there and can save yourself a bundle of cash when you're looking for that extra refrigerator or freezer or lawn mower or whatever.

Go to Town Meeting. This is very important. It only happens once a year so there's no excuse for not attending. Town meeting allows you to socialize as well as help decide what the town will spend in the coming year. Your first one or two years you should just listen and observe how things are done. If you can, latch on to somebody who can explain the whole thing to you. This will drastically shorten the learning curve.

Also, read the Town Report, usually mailed out to everyone in town well before town meeting. This gives you an idea of what the townspeople voted for and against the previous year as well as a list of what folks will be voting on this year.

And one last thing when it comes to town meeting: Never ever preface a statement with the phrase “Back where I/we come from....” This is the kiss of death for a newcomer. People in your new town don't care about where you came from, at least not during a debate over some warrant article. You're here now. If you insist on this kind of social suicide, be prepared to be immediately branded a “Flatlander” and never taken seriously again. (Note: There is only one exception to this rule – The phrase can be safely used if what you're going to say is going to be used as an example of why the town shouldn't vote for something. “Back where I come from, the town tried this and it was an utter disaster. It cost the town a ton of money to fix. Do you really want to do the same thing?”)

Find out which place serves the best breakfasts, then go there. Lots of people will dine out on Saturday or Sunday mornings. Ask them what place they'd recommend. You can make good contacts while schmoozing with the waitresses, cooks, or other patrons.

Use local contractors. Never mind that fancy construction firm, plumber, or electrician you've done business with in the past. Ask around and find somebody local. You'll find that they're just as good as the ones 'back home' and they'll probably cost less, too. They'll also be willing to come right out in an emergency. Sometimes the best places to ask is at that diner where you now have breakfast on Saturday mornings, or at town hall, or at the fire station. They'll know who's good and who to avoid.

If you're sending your kids to the local school, make sure you get involved with the school activities, and particularly the PTA or PTO. Get to know your kid's teachers. See them more often than just during parent-teacher conferences.

Get rid of the Lexus/BMW/Mercedes/Jaguar and get a more practical vehicle. Or if you're going to keep it, use it only when traveling long distance or on special occasions. SUVs are OK to a point (no Cadillac Escalades or Lincoln Navigators and the like), but pickup trucks are better. (It also makes it easier to haul your trash to the dump). A 4X4 pickup is even better, particularly during the winter as well as mud season.

Get used to the idea of dirt roads. Most small towns have 'em and many have more than a few. Don't expect the town to pave them just for your convenience. Most times it's cheaper to leave dirt roads as dirt roads. The town will grade them a couple of times a year to keep them from becoming too bumpy or rutted.

Get used to the idea of dark. You won't necessarily find streetlights along roads in many small towns except near the town center and at a couple of intersections. It can get dark, and I mean really dark at night. When you look up you'll be amazed at the number of stars you can see. Please try to keep it that way. The last thing you're neighbors need or want is you lighting up your property like Fenway Park or Yankee Stadium. It will just annoy them and spoil the view of the night sky. (Note: I covered this since the original post at Weekend Pundit. A Flatlander from south of Boston bought a second home just up the road from us. He left the outside lights on his new place all the time whether he and his family were there or not, lighting up his home and surrounding area just like the aforementioned Fenway Park. I finally got the chance to ask him why he did this. His answer was that he thought it would keep burglars away. My answer to him was that all it did was make it easier for the burglars to see what they were doing. If he was that concerned, he could put in an alarm system which, in the long run, would be cheaper than keeping all the lights on. Since that talk he leaves the most of lights off.)

There are farms in small towns and they sometimes produce interesting smells. Get used to them. They've been here a lot longer than you and this is their livelihood. They won't take kindly to a newcomer trying to tell them what they should and should not be doing.

Sometimes there are also logging operations going on in some towns out in the country. Sometimes you'll see very big trucks loaded down with lots of logs. Get out of their way. With a full load they aren't going to stop very quickly and unless you're also driving a logging truck any argument over who has the right of way will end with them winning and you losing, big time.

Hunting is a fact of life. If you're a bunny-hugger and think hunting is wrong, keep it to yourself. Hunting is necessary to keep deer, moose, bear, and other wildlife populations in check. If you don't want hunters on your property all you have to do is post the proper signs at the proscribed height and intervals along the edge of your property. Also, don't go traipsing through the forest or fields wearing brown and white clothing during hunting season. It's a good way to end up dead or wounded. If you insist on taking your nature hikes during hunting season, remember these two words – International Orange. Vests and hats of this color are your best friend. So what if they make you look fat. At least you'll be alive to bitch about it.

Snow tires, your winter friend. Despite having your car/truck shod with all-season radials, you'll find that a good set of snow tires is worth the investment if you live in a part of the country where annual snowfall is measured in feet rather than inches. All-season radials are a compromise at best. Snow tires just plain work better in the snow. They can mean the difference between making it home safely or ending up in a ditch waiting for someone to (hopefully) pull you out before you become a corpsicle. Investing in a good set of tire chains is also suggested, but not required.

Food, particularly baked goods are always appreciated at the local firehouse, police station, town highway department, and town hall.

Bean suppers and pancake breakfasts are a mainstay of country living, whether they're put on by church groups, volunteer fire departments, or organizations like the Elks, the Masons, Odd Fellows, or others. They are good places to meet other townspeople, get a decent meal, and support community charities or civic associations. It's what's called 'networking', only you're doing it on a more personal level.

And yet another food related subject, in this case pizza and Chinese food deliveries – Don't count on it.

Gasoline, home heating oil, and propane. These will all become far more important to you than they have in the past, particularly in the winter months. You will learn to keep your gas tank at least half full. There are a number of reasons for this, one of the most important being your survival if you get caught out on the road in a winter storm. You will also learn the true worth of home heating oil and propane. Deliveries of these staples can be few and far between if you don't plan ahead. And if you don't plan well enough, you'll come to know your plumber all too well (frozen and/or burst water pipes).

Wells and septic systems are all you'll find in most small country towns. Many don't have a municipal water supply or sewage treatment plant. Your well is your water supply and the septic system takes care of your waste water. You will also become familiar the following terms: leach field, distribution box, Rid-X, submersible pump, well head, water softener, dry well, and pressure tank.

Cell phone service- In your dreams....

Home security systems aren't really required unless your 'security system' consists of one or two middling to large dogs. As Bogie pointed out earlier, those fancy electronic systems send the wrong message to your neighbors. In this case it's “I don't trust any of you...” (See exception under 'Get used to the idea of dark')

I could go on and on ad infinitum, but I think you catch the drift. If, after reading this, you still want to move to 'the country', then you're probably cut out for it. If any of this gives you the heebie-jeebies, then I suggest you keep your experiences of living in the country to those one or two weeks a year when you're on vacation.

More to follow.....