76-07-B7
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New Hampshire and Vermont[edit]
Transcript[edit]The late poet Robert Frost once wrote, "Anything I can say about New Hampshire, will serve almost as well about Vermont." That still holds true about the natural beauty of both states, but things have changed when it comes to comparing their taxes and state spending. For starters, consider this: Vermont has a state income tax and a statewide sales tax. New Hampshire has neither. It's the only state in the country where that's true. In Vermont's case, this seems to have resulted in expenditures rising to match income. In 1974, state and local expenditures in Vermont were 50 percent above those in New Hampshire. On the national scale, Vermont was the Number Three state in terms of the percentage of personal income of its residents taxed. New Hampshire was at the other end of the scale: 47th. Now, Big Government fans might conclude that Vermont's people get about 50 percent more and better service than New Hampshire's. Not so, conclude two scholars, Professor Colin Campbell of Dartmouth and his wife, Rosemary, in a recent fiscal comparison of the two states for the first five years of this decade. Take property taxes, for instance. You might think that Vermont's broadbased taxes would reduce the load on the local property taxpayer. But no. For 1974, the latest year surveyed, Vermonters paid 6.6 percent of personal income in property taxes; New Hampshire citizens paid only 6.2 percent. When it comes to education, Vermont invests 9.6 percent of personal income to New Hampshire's 6.6, but New Hampshire teachers get higher salaries and student test scores in the two states run virtually neck-and-neck. But doesn't low-tax New Hampshire need more federal money to pay its bill? No again. It gets the equivalent of 3.6 percent of personal income in federal aid; Vermont gets double that, 7.2 percent. Why is New Hampshire better off? There are probably several reasons, but one company president there recently said, "People here have the old fashioned notion of a day's work for a day's pay." Today, New Hampshire has the nation's second lowest unemployment rate. Factories and businesses are moving into New Hampshire because of the good reputation of its work force and because of the favorable business climate. New Hampshire is a small mirror of what America used to be," is the way the head of one company put it after his firm moved to New Hampshire in 1975. New Hampshire people (among them Governor Meldrim Thomson who just won a third term) believe one reason for success is strong local control. In fact, local governments as a group throughout the Granite State raise and spend more money than does the state government. I have a friend who has a framed motto above his desk that reads, "No man's life, property or liberty are safe when the legislature is in session". Maybe the fact that New Hampshire's state house of representatives pays its members only $200 each per term and meets every other year has something to do with the state government's low level of spending. Governor Thomson, who campaigned against imposing broadbased taxes, sometimes refers to neighboring Massachusetts as "Taxachusetts". This may rankle some of the Bay State's legislators, but it must have some basis of truth, for new residents flow steadily into New Hampshire from Massachusetts. Will success spoil New Hampshire? Some worry that the newcomers will expect more from government, thus forcing taxes up, but I have a hunch that that famous New Hampshire sense of self-reliance will win out. This is Ronald Reagan. Thanks for listening. |
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