where goes new hampshire? nh government finance officers may 2, 2008 dennis delay deputy director,...

Where goes New Hampshire?

NH Government Finance OfficersMay 2, 2008

Dennis DelayDeputy Director, NHCPPS

“…to raise new ideas and improve policy debates through quality information and analysis on issues shaping New Hampshire’s future.”

Anecdotal evidence from the Fed Bank of Boston, April 16, 2008

First District reports continue to be mixed, with most expressing concern about the near-term outlook.

Retail seeing activity slow, although some remain ahead of year-earlier sales levels;

Tourism is fairly robust in the region. Manufacturers mostly report revenue growth

and say they are uneasy with high costs and a slowing U.S. economy.

Real estate markets remain soft.

Help wanted advertising online has leveled off.

US Help Wanted AdvertisingIndex 2/2004=100

50.0

70.0

90.0

110.0

130.0

150.0

170.0

190.0

210.0

230.0

250.0

Jan

-00

Jul-

00

Jan

-01

Jul-

01

Jan

-02

Jul-

02

Jan

-03

Jul-

03

Jan

-04

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Jul-

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Jan

-07

Jul-

07

Jan

-08

Jul-

08

US Monster

Layoffs have moderated, compared to the beginning of the decade, but recent report is unsettling.

Source: NH Dept of Employment Security

Initial Claims for Unemployment Compensation NH

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000Ja

n-90

Jan-

92

Jan-

94

Jan-

96

Jan-

98

Jan-

00

Jan-

02

Jan-

04

Jan-

06

Jan-

08

The pool of unemployed is still uncomfortably large.


Continued Weeks Claimed for Unemployment Compensation NH

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000Ja

n-9

0

Jan

-92

Jan

-94

Jan

-96

Jan

-98

Jan

-00

Jan

-02

Jan

-04

Jan

-06

Jan

-08

Manufacturing suffered the worst job losses

NH Manufacturing Jobs

70000

75000

80000

85000

90000

95000

100000

105000

110000Ja

n-01

Jul-0

1

Jan-

02

Jul-0

2

Jan-

03

Jul-0

3

Jan-

04

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Jan-

05

Jul-0

5

Jan-

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Jul-0

6

Jan-

07

Jul-0

7

Jan-

08

Jul-0

8


Construction jobs soften with real estate woes

NH Construction Jobs

20000

22000

24000

26000

28000

30000

32000

34000Ja

n-01

Jul-0

1

Jan-

02

Jul-0

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5

Jan-

06

Jul-0

6

Jan-

07

Jul-0

7

Jan-

08

Jul-0

8


Consumers are still spending money at retail stores

NH Trade & Transportation Jobs

130000

132000

134000

136000

138000

140000

142000

144000

146000

148000

150000Ja

n-0

1

Jul-

01

Jan

-02

Jul-

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Jan

-03

Jul-

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Jan

-04

Jul-

04

Jan

-05

Jul-

05

Jan

-06

Jul-

06

Jan

-07

Jul-

07

Jan

-08

Jul-

08


… but tourism has stalled.

NH Leisure and Hospitality Jobs

50000

55000

60000

65000

70000

75000

80000Ja

n-01

Jul-0

1

Jan-

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2

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7

Jan-

08

Jul-0

8


Insurance, investment, banks, wither after significant growth

NH Financial Activities Jobs

33000

34000

35000

36000

37000

38000

39000

40000

41000Ja

n-01

Jul-0

1

Jan-

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6

Jan-

07

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7

Jan-

08

Jul-0

8


Business demand for technical services and employment agencies expands anew.

NH Professional & Business Service Jobs

46000

51000

56000

61000

66000

71000Ja

n-01

Jul-0

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6

Jan-

07

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7

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Jul-0

8


Demand for education and healthcare is relentless

NH Educational & Health Service Jobs

82000

87000

92000

97000

102000

107000

112000Ja

n-01

Jul-0

1

Jan-

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Jul-0

2

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5

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Jan-

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Jul-0

8


…and citizens turn to the Government for help.

NH Government Jobs

70000

75000

80000

85000

90000

95000

100000Ja

n-01

Jul-0

1

Jan-

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Jul-0

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NH Real Estate Shifted Quickly

• Chart shows NH Residential Sales and Prices, Percent Change vs. the previous year.

• Sales declined by one third from 2004 to 2007.

• Sales declined another 27% so far in 2008, and prices are down 8%. -30

-25

-20

-15

-10

-5

0

5

10

15

20

2002 2003 2004 2005 2006 2007 08Q1

Units Sold Median Price

Source: NH Assoc. of REALTORS

Home Prices Had Increased Faster than Income

New Hampshire Personal Income vs Convential Mortgage Home Price

-4.0-2.00.02.04.06.08.0

10.012.014.016.0

99Q1

99Q4

00Q3

01Q2

02Q1

02Q4

03Q4

04Q2

05Q1

05Q4

06Q3

07Q2

Per

cent

Cha

nge

over

Las

t Y

ear

NH Personal Income Conventional Mortgage Home Price Index

New Hampshire affordability better than the 1980’s.

Sources: Census Bureau and Bureau of Economic Analysis

Ratio Median Home Value to Per Capita Income

2.00

3.00

4.00

5.00

6.00

7.00

8.00

1960 1970 1980 1989 1990 2000 2003 2004 2005 2006 2007

United States New Hampshire

Correcting the home price to rent ratio.

Ratio of Existing Home Price to Median Rent

1.00

1.20

1.40

1.60

1.80

2.00

2.20

2.40

1990

1991

1992

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1994

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1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

Ratio Average 1990 to 2003

Total New Hampshire

12% decrease in home pricesand 15% increase in median rent

General Fund and Property Tax

NH Taxes as % of Gross State Product

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

4.5%

5.0%

5.5%

6.0%

1966

1968

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1972

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1976

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1980

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1986

1988

1990

1992

1994

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1998

2000

2002

2004

2006

Year

Property Taxes

State General Fund Revenue

2007 NH General Fund Revenue Sources

Business Profits Tax20%

Business Enterprise Tax6%

Liquor Revenue9%

Interest and Dividends Tax8%

Estate and Legacy Tax0%

Insurance Taxes7%

Net "Medicaid Enhancement"

7%

Other Revenues6%

Meals and Rooms Tax14%

Board and Care1%

Utilities Tax0%

Real Estate Transfer Tax6%

Dog & Horse Racing Revenue

<1%Beer Tax

1%Court Fines & Fees

2%Securities Revenue

2%

Communications Taxes5%

Tobacco Tax5%

Total:$1,422 million

34

State is constantly ‘tinkering’ with revenue system.

NH General Fund Revenues (Current $)

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

1988

1989

1990

1991

1992

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1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

State Fiscal Year

Mil

lio

ns

of

Do

llar

s

Taxes and rates in place in 1988

Mediscam New taxes

Increased rates

$543

$1,058

$1,422

More Reliant on Property Taxes

State

Collections Per

Household RankCollections Per Capita Rank

New Jersey $6,110 #N/A $2,217 1Connecticut $5,405 1 $2,052 2New Hampshire $5,332 2 $2,034 3New York $4,800 3 $1,773 4Rhode Island $4,480 5 $1,706 6Vermont $4,245 7 $1,705 7Massachusetts $4,224 8 $1,608 9Illinois $3,984 9 $1,469 10Maine $3,969 10 $1,640 8

State and Local Property Tax Collections

Fiscal Year 2005

Per Household and Per Capita

Source: The Tax Foundation: http://www.taxfoundation.org/taxdata/show/251.html

More Reliant on Corporate Taxes also …

Sources of Revenue for State Government (US versus New Hampshire)

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

From Local andFederal

Governments

Property Taxes Sales Taxes IndividualIncome Taxes

CorporateIncome Taxes

U.S. Average

New Hampshire


Our tax burden remains lower ….

Average Tax Burden in NH and the US

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

1970

1972

1974

1976

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

NH Tax Burden

Average State-Local TaxBurden


Work Focused on Local Government

Financing Local Government (Data Book) Elderly Property Tax Exemptions Update Aging and Government Services

• Implications of aging on human service expenditures (and county LTC system)

The Shifting Burden of Government Services? • Education• Long Term Care System• Retirement System• Juvenile Services

Services by Type of Service

What We Did

Surveyed available data on towns Collected the only consistent source of

information on taxation, appropriation, revenues and expenditures by major type of service (municipal, county, school) funded by cities and towns.

Provide analysis of general trends in local government for the state.

Provide each town with 5 years of data, available on the web.

The highest municipal valuations are in the Merrimack Valley, Seacoast and the Lakes Region (metro centers and tourism related)

Municipal valuations per person have grown the fastest in areas around the Lakes (second home and tourism related?)

Rising property values had let towns reduce tax rates.

NH Equalized Property Value and Tax Rate

0

20

40

60

80

100

120

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160

180

200

1978

1979

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Bill

ion

s

$0

$5

$10

$15

$20

$25

$30

Property Value Tax Rate

Property Values (left scale)

Tax Rate (right scale)

Falling home prices will mean falling property values.

NH Equalized Property Value and Home Prices

$0

$20

$40

$60

$80

$100

$120

$140

$160

$180

$200

1978

1979

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2007

Bil

lio

ns

0

100

200

300

400

500

600

Property Value Home Price Index

Property Values (left scale)

OFHEO home price index, 1980=100 (right scale)

Doing this work helped the Center refocus the mission.

Local Government – Enhancing the understanding of where the burden of government services is born and how it is changing is important. In addition, it is important that the Center continue to expand the information on city and town functions that is available.

Northern New England Scores Well

Northern New England Economic Scoreboard for 2007-2008Ranking among the 50 states(Rank of '1' is best; for example 1 is lowest tax rate, highest income, etc.)

ME NH VTCategories Rank Rank RankFavorable Tax Climate (by burden on income, 2005) 45 1 41Standard of Living (by poverty rate 2004-2006) 26 1 3Most Livable State (CQ Press, 2008) 20 1 8Safest State (CQ Press, 2008) 2 1 4Child and Family Well Being (Annie E. Casey Foundation, 2007) 15 2 6Education – High School Degree or better (2006) 18 3 10Healthiest State (CQ Press, 2008) 4 2 3Per Capita Income (2007) 35 8 23Education – College Degree or better (2006) 25 10 7

A full proof economic indicator!

New Hampshire Boat Registrations and Payroll Employment (000's)

60000

65000

70000

75000

80000

85000

90000

95000

100000

105000

1990

1991

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2007

400

450

500

550

600

650

700

NH Boat Registrations NH Payroll Employment

All of our reportsare available on the web:

www.nhpolicy.orgwww.nhpolicy.org

New Hampshire Center New Hampshire Center for Public Policy Studiesfor Public Policy Studies

Board of Directors

Donna Sytek, Chair

John B. Andrews

John D. Crosier

Shelia T. Francoeur

Chuck Morse

Todd Selig

Stuart Smith

James Tibbetts

Brian Walsh

Kimon S. Zachos

Martin Gross

Staff

Steve Norton

Dennis Delay

Ryan Tappin

“…to raise new ideas and improve policy debates through quality information and analysis on issues shaping New Hampshire’s future.”

where goes new hampshire? nh government finance officers may 2, 2008 dennis delay deputy director,...

Documents

income slide

property tax slide

type of service slide

relentless source

nh real estate

property taxes source

nh residential sales

employment agencies