By Todd I. Selig
New Hampshire’s budget crisis isn’t the result of an economic downturn or unexpected calamity—it’s the foreseeable outcome of deliberate policy choices. Chief among them: a decade of business tax cuts that have drained state revenues without delivering the promised economic boom.
We were told that cutting the Business Profits Tax (BPT) and Business Enterprise Tax (BET) would attract businesses, grow the economy, and create jobs. What we got instead is an underfunded university system, strained schools and counties, struggling low- and moderate-income residents, and towns forced to absorb the cost of the state’s growing disinvestment.
Since 2015, reductions in BPT and BET rates have cost New Hampshire between $795 million and $1.17 billion in forgone revenue, according to the New Hampshire Fiscal Policy Institute. And yet, the return on that investment has been negligible.
Let’s look at the facts:
- Slower Revenue Growth: From 2015 to 2023, NH business tax revenues grew 124%. In that same period, Maine and Vermont—states that kept corporate tax rates stable—saw 167% and 166% growth, respectively. Nationally, the increase was 192%, and among New England states (excluding NH), 172%.
- Minimal Economic Impact: Each dollar spent on business tax cuts generates only 34 cents in economic activity. In contrast, food assistance yields $1.61, and federal aid to states and municipalities brings in $1.34 per dollar.
- No Jobs Boom: NHFPI analysis shows no statistical link between BPT cuts and job creation. Large corporations—especially multinationals, which make up 60% of BPT revenue—benefit most. Local communities and families are left to absorb the consequences of reduced state investment.
Now, with the New Hampshire House finalizing a two-year budget, proposed cuts reflect the painful consequences of this shortfall. These aren’t just belt-tightening measures—they’re deep, structural wounds.
Among the most damaging proposals is a 33% cut in state aid to the University System of New Hampshire (USNH)—a staggering $50 million reduction. Already the least-funded public university system in the nation, USNH plays a vital role in our state’s economic engine. The flagship campus, UNH, generates $1.3 billion in economic output annually, supports nearly 9,000 jobs, and contributes over $74 million in state and local tax revenue. UNH alumni alone pump another $1.1 billion into the economy through wages and spending.
But these numbers don’t fully capture what’s at stake. As an R1 research university, UNH attracts $260 million in federal funding each year, tackles critical issues like PFAS contamination and space innovation, and sustains over 2,300 jobs. It’s a lifeline to 15,000 students—19% of whom are first-generation college attendees—many of whom stay and contribute to our workforce after graduation. Undermining this system now is like a farmer selling her tractor to save on fuel: short-sighted and counterproductive.
The proposed budget also freezes Rooms and Meals Tax distributions to municipalities at $137 million per year. This amounts to a de facto $11 million cut over two years. For towns like Durham, Concord, Plymouth, Manchester, Nashua, Lebanon, Derry, and Salem it means raising property taxes or cutting services—another example of the state offloading its responsibilities onto local governments and local taxpayers.
We need solutions rooted in pragmatism, not ideology. Here are two steps lawmakers should take now:
- Restore Business Tax Rates: Reinstating pre-2015 BPT and BET rates could generate up to $1 billion in revenue—funds that could stabilize USNH, restore municipal aid, and support key services like Medicaid expansion and the arts.
- Pause New Spending: Delay all new programs and initiatives unless they demonstrate clear cost savings, improved efficiencies, or long-term economic benefit. The Governor’s Commission on Efficiency (COVE) could play a leading role in identifying these opportunities.
New Hampshire residents pride themselves on common-sense decision-making. We invest in what works, fix what’s broken, and pivot when policies fall short. The business tax cuts have not delivered. Clinging to them out of political convenience only prolongs the damage.
This budget crisis is not inevitable. It’s the direct result of legislative choices made over the last decade. Lawmakers must now choose differently—for the sake of our communities, our students, and our shared future.
About the author: Originally from Laconia, Todd Selig is the longtime Town Manager in Durham, where he lives with his family.
