As the numerical designations of these two bills would show, these initiatives are top priority in the eyes of the Senate leadership this year.  SB 1 reduces (or might we say "deflates"?) the Business Profits Tax to 8% by 2018; SB2 reduces the Business Profits Tax to .675 by 2018.

You may recall from reading The Telegraph's story last week that covered our Chamber's Legislative Symposium showed that the state's business climate is not exactly what you would call rosy (read a recap of our Legislative Symposium here). As Charlie Arlinghaus of The Josiah Bartlett Center told the Symposium attendees, we need to face up to the fact that "it is no longer 1984 and we are not Texas" (job growth has been over 11% in Texas in the past few years; in New Hampshire, it has been less than 1%). Charlie, for one, has been recommending that a reduction in business taxes is one of the most significant ways to get the economy moving. Prime Sponsor Senator Jeb Bradley pointed out that we are ranked #48 among the states as far as our corporate tax is concerned.

On the other side of the coin, however, is the obvious concern that a reduction in the BET or BPT will mean a reduction in revenue to the State at a time when there are many demands on that revenue. Jeff McLynch of the New Hampshire Fiscal Policy Institute said that in his view it will be impossible to meet the challenges in education and other areas if there is a reduction in BPT and BET revenues. The Governor also has made it clear that she has some strong concerns because of the revenue issue.

The sponsors of these bills, though, seem quite confident that the bills will be revenue neutral because the reductions would reduce revenues at a rate that is at or below a 3% growth in business taxes each year, an amount that seems realistic to assume can be achieved. So if SB1 and SB 2 work as intended, they will be an important statement that the state is attempting to really be open for businesses and jobs. The Chamber supports these bills as an important component of an overall strategy that New Hampshire can no longer rest on its laurels. As we have been saying, it is time for us to get the defense off the field, and start playing offense.