2015.01.16 legislative symposium presentation ic 2

Welcome to theLegislative Symposium

January 16, 2015

Greater Nashua Chamber of Commerce

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Seminar 1: A General Overview on NH’s competitive advantage versus our Neighboring

States Time: 1:00-2:15pm

Mr. Steve NortonExecutive Director of the NH Center for Public Policy


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Tailwinds to Headwinds to ...


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3rd Highest Median Age in the Country

Why?


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6


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Astounding Growth

700,000

1968

1.3 million

2013


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Projections: Limited GrowthTen Year Percent Change in New Hampshire Population by Decade End

8.5%

13.8%

21.5%

24.8%

20.5%

11.4%

6.5%

3.3% 3.8%

1.1%

1950 1960 1970 1980 1990 2000 2010 2020 2030 2040

ActualForecast


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Productivity

GDP Per Job


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At the Economic Macro Level?

$-

$1,000,000

$2,000,000

$3,000,000

$4,000,000

$5,000,000

$6,000,000

$7,000,000

New Hampshire Total Compensation Paid by Selected Industries(Thousands of Dollars)

Manufacturing

Healthcare

Retail Trade

Finance

Construction

Education

Real Estate

Government

Hi-Tech


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Virtually all our public policy is based on a

picture of ourselves and trends that are not really

true any longer


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What’s Next?


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Cultural and Natural Resources

• State spending on natural resources per person

• Percent of tree cover in urban areas

• Domestic tourism spending per capita

• Creative Economy Jobs Concentration

• Voter turnout rate• Volunteering rate


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Education, Labor and Workforce• Change in 35-44

population share, 2000 to 2010

• Percent of adult population with an associate degree or higher

• Percent of population in Science and Engineering workforce

• High school graduation rate

• Student debt per person

• Rate at which high school graduates go on to post-secondary institutions

• Percent of children aged 3 to 4 years old enrolled in preschool


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Fiscal Policy• State Business

Climate Tax Index• Top Marginal

Corporate Tax Rate • Public Health,

Welfare, Hospital Spending per Person in Poverty

• State Debt per Dollar of Personal Income

• Public Government and Administration per Dollar of Personal Income


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Energy• Industrial Electric

Prices • Natural Gas Prices

in Dollars per Million BTUs

• Energy Consumption

• Expenditures Per Capita

• Energy Efficiency Rank


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How Does NH Rank?


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Working Age Population Will Decline in Every County

1%

-7%

-3%

-5%

-6%

-6%

-9%

-8%

-11%

-14%

-14%

-26%

-30% -25% -20% -15% -10% -5% 0% 5%

United States

New Hampshire

Strafford

Hillsborough

Rockingham

Sullivan

Merrimack

Belknap

Cheshire

Grafton

Carroll

Coos

Declines in Working Age Population 2010-2030


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Educating Our Own?

HS Graduation Rate? 4th in the Country

24th in the country in HS Grads going on to

a degree granting institute


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Workforce Development?

• Educate our own better …. ? • Make NH a place in which a new

generation of diverse, urban dwelling, millennials …. ?

• Narrow our economic focus to specific geography or industry?


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Building on Assets: For its size, the Nashua-Manchester Corridor is in the top 10 with fastest growing companies


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Merrimack – Hillsborough Corridor is Growing


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Hillsborough County … 2010 - 2020

2.5% 1.7% 2.7%

-0.1%

10.4%

38.9%

12.3%

24.5%

6.3%

0.9%

-5.0%

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

45.0%

Annual Job Growth by County 2010 to 2013, Share of Total Job Growth


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“The Young and Restless—25 to 34 year-olds with a bachelor’s degree or higher level of education—are increasingly moving to the close-in neighborhoods of the nation’s large metropolitan areas. This migration is fueling economic growth and urban revitalization.”http://cityobservatory.org/ynr/


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What’s the Goal?


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Converting Headwinds to Tailwinds: Workforce

• Workforcei. Better educate our own to support economic

activity ii. Ensure that we are a place that young

professionals want to move to and stay• Solutions

i. Support businesses in creating training feeder systems?

ii. Increase state spending on USNH & CCSNH?• But what is the return on investment?

iii. Scholarships to keep graduates in state?• Would these reach intended targets?

iv. Overall K-12 curricula, including STEM, etc?• How does this align with needs of future economy?


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Business Climate• Goal: Continue to be (improve our status as

a) business-friendly place• Solutions

i. Lower costs?• Health care• Energy• Real Estate

ii. Reduce business taxes?• What are unintended consequences for state budget?

iii. Reduce regulation?• How does NH really compare to other states?

iv. More aggressive recruiting and incentives?• Do these work? i.e. Smokestack chasing?


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Focus more effectively where we have a comparative advantage

i. Recognize regional variation in economic ecology and assets.

• Limit focus to geographic clusters?– Manchester: Hi-tech Millyard– Portsmouth: Build off UNH energy– Upper Valley: Dartmouth as incubator– Nashua: Extending high tech north

ii. Industry• Aerospace• Bio-tech• Travel tourism


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The Long View of State Spending

2.85%

2.35%2.22%

2.06%

0.89%

-0.19%-0.50%

0.00%

0.50%

1.00%

1.50%

2.00%

2.50%

3.00%

3.50%

Health andHumanServices

Admin ofJustice andPublic Prtn

ResourceProtection andDevelopment

Education GeneralGovernment

Transportation

Annualized Change in Per Capita Inflation Adjusted State Spending (Total Funds) 1990 to 2015


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New Hampshire Center for Public Policy Studies

Want to learn more?• Online: nhpolicy.org• Facebook: facebook.com/nhpolicy• Twitter: @nhpublicpolicy• Our blog: policyblognh.org• (603) 226-2500

Board of DirectorsWilliam H. Dunlap, Chair

David Alukonis

Eric Herr

Dianne Mercier

James Putnam

Todd I. Selig

Michael Whitney

Daniel Wolf

Martin L. Gross,

Chair Emeritus

Directors Emeritus Sheila T. Francoeur

Stuart V. Smith, Jr.

Donna Sytek

Brian F. Walsh

Kimon S. Zachos

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


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Seminar 2: NH’s Budget Overview

Time: 2:30 PM – 3:30 PM

Mr. Charlie ArlinghausPresident of The Josiah Bartlett

Center for Public Policy


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General Fund 2000-2015

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

1000000

1100000

1200000

1300000

1400000

1500000

1600000

Apples to Apples "general fund"15 year Average = 1.99%


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Priorities: 2012 vs. 2006$1,302M

General Fund*(-1.4%)

$629.3MHHS

(+4.4%)

$174MDD & BH(+34%)

$455MOther HHS

(-3.8%)

$565.8MNon-HHS(-10.9%)

$106.9MDebt Service

(+29.7%)


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Priorities: 2015 vs. 2013$1,470.6M

General Fund*(+9.8%)

$681.2MHHS

(+5.7%)

$215.7MDD & BH(+16.6%)

$465.5MOther HHS(+1.4%)

$668MNon-HHS(+14.4%)

$121.4MDebt Service

(+9.1%)


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Debt Balloon 1993-2013

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 $500.0

$550.0

$600.0

$650.0

$700.0

$750.0

$800.0

$850.0

$900.0

$950.0

$1,000.0

NH General Obligation DebtAnnual Growth 93-07: 0.67% -- 07-11: 9.5%

Debt


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No Such Thing As Average

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

-12.0

-8.0

-4.0

0.0

4.0

8.0

3.2

-2.9

3.3 3.6

8.7

5.56.3

1.0

-10.5

-3.6

-2.0

1.7

3.6

0.8

Average Tax Growth 2001-2014 = 1.3%not including rate increases or SPT, MET


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Two Major Modern Reforms

• 1970: Business Profits Tax

• 1993: Business Enterprise Tax


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Business Taxes Volatile 1978-1993

Growth Swings in 83 Point Range

60.7%

22.1%

-1.9%

-8.8%

39.1%

-9.0%

40.6%

9.0%

0.4%

34.5%

-8.9%

4.8%

-22.5%

0.9%

-18.2%

40.5%

-30.0%

-20.0%

-10.0%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993


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Lessened Volatility 1994-2010

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

-30.0%

-20.0%

-10.0%

0.0%

10.0%

20.0%

30.0%

Growth Swings in 44 point Range


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A 14 year Lost Decade

• 1981-2001: 50.8% Job Growth• (81-91: 27.5%; 91-01: 18.2%)• 2001-2011: 4.9% Job Growth

• If Ifs and buts were candy and nuts:i. 27.5% - 169,000 extra jobs.ii. 18.2% - 105,400 extra jobs


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Everything’s Better in Texas

Job Growth Since the Recession:

2008 2009 2010 2011 2012 2013 2014 2015

-10.00%

-5.00%

0.00%

5.00%

10.00%

15.00%

-0.11%

11.75%

0.44%

New Hampshire Texas US, less TX


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Another Look: Since 1983

1983 1988 1993 1998 2003 2008 20130.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

70.00%

80.00%

90.00%

Nation NH TX


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Comme Ci Comme Ca• Current Hole: $29.8 million• Quasi-balanced base• 2 years ago: $57**m surplus• 4 Years: $800m nightmare• Uncertain 2016-2017

i. Medicaid Enhancement Taxii. Dedicated Funds (16M)iii. Rainy Day Fund


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Fiscal Year 2006

State of NH

NH General Fund$72.9M

FederalGovernment

NH Hospitals+/-0

Tran

sfe

r to

G

F$72.9

M

DS

H

Paym

en

ts$72.9

M

MET

Reven

ues

$145.8

M

DS

H M

atc

h$72.9

M


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State of NH

NH General Fund$74.8M

FederalGovernment

NH Hospitals-$50.2M (-$126.1M)

Tran

sfe

r to

G

F

$74.8

MD

SH

P

aym

en

ts$24.6

M

Gro

ss M

ET

Reven

ues

$175.3

M

DS

H M

atc

h$24.6

M

Pro

vid

er

Paym

en

ts$

75

.9M


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Charlie ArlinghausJosiah Bartlett Center for Public Policy

[email protected]


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Seminar 3: Energy in the Granite StateTime: 3:45 PM – 4:30 PM

Mark Bailey Donna GamacheFacilities Engineering ManagerBAE Systems

Director, Governmental AffairsPublic Service of New Hampshire


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MARK BAILEYFacilities Engineering Manager

Energy in the Granite State


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Electronic Systems footprint

11,300 Employees$4B Revenue25 Locations


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Electronic Systems origins


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Our Missions


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Energy Prices in NE

New England needs AFFORDABLE & RELIABLE energy


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Historical Electricity Prices Increases

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 20134.04.55.05.56.06.57.07.58.08.59.09.5

10.010.511.011.512.012.513.0

Average U.S Electricity Prices by Sector

ResidentialCommercialIndustrial

Cent

s per

kW

h

Residential: consists of living quarters for private householdsCommercial: consists of service-providing facilitiesIndustrial: consists of all facilities and equipment used for producing, processing, or assembling goods.


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Site Electric Rates

ATX ENY FWA GNY PTP LEX MER NCA NHQ TNJ WNJ0.000

0.020

0.040

0.060

0.080

0.100

0.120

0.140

0.160

Electricity Prices (FY 2013)

$/k

Wh

Average Rate = 0.1053


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Performance Trends

2009 2010 2011 2012 2013

En-ergy

305.026139955451

306.542108991794

290.385770790152

283.023246800703

272.080359232122

255

265

275

285

295

305

ES Energy

Mill

ion

kWh

2009 2010 2011 2012 2013

Water 234.580368 159.14712 122.360304 105.626136 93.19992

25

75

125

175

225

ES Water

Mill

ion

Ga

llon

s


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BAE Actions to Stabilize Our Energy Future

• Conserve:Sustainability & Strategic Energy Programs(Real Estate Optimization, Energy Policy, ESA, UCT, MOE,

UBM & Supply Side Consulting)

• Learn:Stay current with energy market conditions & legislation

• Lead:Provide leadership by having a public voice


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DONNA GAMACHEDirector, Governmental Affairs

WORKING TO PROVIDE NEW HAMPSHIRE WITH ENERGY SOLUTIONS


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RESIDENTIAL ENERGY RATES ARE RISING

PSNH Unitil Liberty NH Electric Coop0.00

2.00

4.00

6.00

8.00

10.00

12.00

14.00

16.00

18.00

20.00

9.90

8.40 7.70 9.00

0.66

7.10 7.80

2.60

2014 Price Recent Price Change

10.56

15.50 15.50

11.60

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Non-Gas Power Plants Are Retiring:


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Energy Solutions for New Hampshire


PSNH’s fleet of power plants continue to run efficiently protecting customers from today’s volatile energy market

Grid Reliability Projects will improve reliability and add capacity to accommodate ongoing economic growth in the region

Northern Pass will bring 1200 MW of clean hydro power to the region

Access Northeast is expected to increase natural gas supply by 1 billion cubic feet per day


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BOB DUNNDirector of Legislative and Governmental Affairs, Devine Millimet

OVERVIEW OF CHAMBER ADVOCACY EFFORTS

Thank You for AttendingThere will now be a reception in the Ashwood Court

January 16, 2015


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Our Upcoming Events

Date: Wednesday, January 21, 2015Time: 12:00 PM – 2:00 PMLocation: Courtyard Marriot, Nashua

Date: Thursday, January 22, 2015Time: 8:00 – 9:30 AMLocation: Educational Outfitters, Nashua

Date: Wednesday, February 1, 2015Time: 5:30-7:30 PMLocation: Massage Envy Spa, Nashua

Date: Wednesday, February 18th, 2015Time: 7:30 – 9:00 AMLocation: Courtyard Marriott

Economic Outlook

Luncheon

TD Bank Networking

Series at Educational Outfitters

February Business

After Hours

State of the City: A Conversation with Our Mayor Donnalee Lozeau

News & Politics

2015.01.16 legislative symposium presentation ic 2