Legislative Alert / Rep. Bill Johnson

The House session on April 28 was both short, with only 11 bills on the regular calendar, and relatively devoid of serious debate. The one issue that received quit a bit of discussion should resonate with the citizens of Gilford. SB-406 prohibits any municipality or county from merging subdivided lots without the consent of the land owner. This issue was recently the cause of a great deal of debate in Gilford during our town’s elections earlier this year. One of the town’s residents had been fighting with the Gilford Planning Board over such a merger of two of her lots. She introduced a petitioned warrant article on the town’s ballot. The town planning board opposed the amendment citing problems with proper zoning management. The town voters sided with the Gilford resident and against the planning board.

The Gilford resident wasn’t satisfied, however. She persuaded a number of state senators and representatives to bring the issue to the Legislature, including a number of Belknap County legislators. The Senate passed the bill easily via a voice vote. The House committee, however, recommended that the issue be further studied to examine the ramifications of the governing rights of local government and problematic zoning issues. The opposition argued that involuntary mergers violated basic property rights of the owners. The opposition won out, defeating the committee’s recommendation and passing the bill by a substantial margin, 221-122. I voted on the prevailing side. Goes to show you what a single citizen can accomplish with perseverance and determination!

Perhaps of more interest to the voters in the district might be the discussions that took place in my Ways & Means Committee over the last couple of weeks. As previously reported, the House had received SB-450 from the Senate along with an amendment originated by the governor. The combination of both dealt with the pending $220-million hole in the current biennium budget with a combination of spending cuts, tax and fee increases, and some “creative” accounting and bonding gimmicks. The Ways & Means Committee was asked to examine the revenue issues in the amendment as well as additional revenue proposals brought by other legislators. These included new taxes on capital gains and nuclear power, as well as increases in the taxes on tobacco products, insurance premiums, and beer. The governor also has proposed the transfer of money not needed for certain state government operations from some dedicated funds to the general fund.

After public hearings and extensive work sessions, the committee narrowly recommended a number of these proposals to the Finance Committee, except for the taxes on nuclear power and beer. These failed to garner any support due to issues of unintended consequences, the targeting of a single energy source, and/or poor wording of the bills.

One proposal merits some additional commentary. A fellow member of the Ways & Means Committee brought an amendment that would shift the tax on electricity from the consumer to the generator. You can find the separate line item on your bill as the “electricity consumption tax.”

The rationale for the change was that New Hampshire generates more electricity than we consume. By taxing the generation of electricity, we are able to tax out-of-state residents and businesses who consume NH generated electricity. Further, because the marketplace for electricity is now a “buyer’s market” and, therefore, highly price-resistant, New Hampshire consumers may, in fact, see a cost saving with the tax shift. In other words, sellers of electricity might not be able to cost shift to the consumer. This latter benefit for NH residents will depend on the ability of companies who are both generators and transmitters, e.g., PSNH, to convince the Public Utilities Commission to allow them to raise rates based on cost. The tax shift would also raise an additional $5-6 million.

Initially, I was opposed to the tax shift proposal because of two concerns. One, as a former business owner, I was suspicious of government changes distorting the supply and demand of the electric marketplace. However, we heard excellent testimony on the workings of the New England electrical grid. The tax would be very small in terms of the total cost of electricity and, therefore, would not affect market price. My largest concern with the initial proposal was that it taxed all generators alike, regardless of the type of energy used, i.e., coal, oil, gas, or alternative and clean energy. I am strongly in favor of providing incentives to the creation and use of clean, renewable energy in this country and state, both for environmental and foreign relations reasons.

In the end, with my urging, the sponsor of the amendment changed the proposal to exempt generators of electricity using renewable energy sources, such as wind, solar, hydropower, etc. I voted to support the tax shift; but the proposal went to Finance without a committee recommendation, as the final vote was split 10-10.

Now, it’s up to the Finance Committee to decide what revenues they want to use vis-à-vis program cuts and creative finance. As my belief remains that NH has a revenue problem, not a spending problem, I hope they’ll choose the revenues. Further, the program cuts will fall on those most in need in the state; the revenues will primarily fall on those able to afford them. They’ll also have other proposals to add to the mix, such as another gambling amendment. We’ll know their decision in the coming weeks and be asked to vote on the entire package.

Perhaps, I should have introduced this piece as “the calm before the storm.” Stay tuned.

(Bill Johnson is a State Representative from Gilford representing Belknap County District #5 which includes Alton, Barnstead, Belmont and Gilford. He can be reached at billjohn4@metrocast.net or 524-8949.)