Issue Position: First in the Nation Plan

Issue Position

New Hampshire has a long history of leading the nation. Our state, then a colony, was the first to declare its independence from Great Britain, six months before the Declaration of Independence was signed. The first potato ever planted in America was done right up the road in Londonderry in 1719. The first free public library in the United States was opened in Peterborough in 1833. And, of course, the first American to travel to space was Alan Shepard from right here in Derry.

We obviously have also taken our role seriously as the first primary state in the nation. We have become experts at looking political leaders in the eye, taking the measure of them, and giving the rest of the country our wise advice as to who should lead us. We‟ve become so good at it that both parties have told the rest of the states to back off and let New Hampshire do its job of testing the candidates for the rest of America.

Sadly, however, the leadership that is inherent in our people hasn‟t made it to Concord. At a time when creating jobs is the most critical thing to get our economy moving again, the folks up at the State House seem content to focus their energies on burning through our money than on creating jobs.

And the problem starts at the top.

The evidence is overwhelming. Under John Lynch‟s tenure as Governor, New Hampshire has fallen into 50th place -- dead last -- in terms of having the highest business tax rate in the nation, according to the non-partisan Tax Foundation. Unsurprisingly, that group found that the Granite State ranks 49th, only ahead of Maryland, in term of the percentage of our workforce that have to leave the state for a job. Right now, one in six New Hampshire workers have to find employment out of state.

With over 80 tax and fee increases in the past two budgets, it‟s no surprise that employers wouldn‟t want to come here and grow their businesses. Now, we‟re facing many companies that are planning to leave the state and take their jobs with them. I have spoken to several businesspeople who have told me that it would save money to move to Massachusetts -- Massachusetts! -- and relocate.

Our neighbors are voting with their feet. Over the past three years, more people have moved out of New Hampshire than have moved here. Does that sound like an economy that is thriving?

Some point out that New Hampshire‟s unemployment is lower than the national average. However, given that so many of our workers have jobs out of state, does that speak well of our economy or the economy of other states? I challenge anyone who thinks that our economy is

strong to talk to some recent college graduates and ask them how easy it is to get a job. You‟ll learn a lot about exactly where we stand.

The reality is that we have been led astray by Governor Lynch. He has taken us down the road of higher taxes to pay for a bigger and bigger state government. The past two state budgets that John Lynch signed have grown by 25%. Has anybody here seen their income go up by that much over the same time?

The folks in Concord have squandered our leadership status as the first in the nation. The Governor has abandoned our "Live Free or Die" principles to avoid the tough job of cutting spending to keep taxes low. The people whom we have entrusted the responsibility of limiting government, protecting the New Hampshire Advantage and ensuring that our state was the shining beacon of opportunity have failed.

Today, the fight begins anew to take back our state, to make us the competitor that other states fear and to reclaim our pride so that people want to come here, not leave. Today, we proclaim to make New Hampshire the „first in the nation‟ state again. Today, we launch the restoration of our greatness.

To get there, we need a plan. We need to send a clear message of what we will stand for and what results we will deliver. New Hampshire simply cannot afford two more years of rudderless leadership that changes its mind depending on the political wind direction. The voters deserve to know what they will get and how the leaders will get there.

With that, I offer my First In The Nation Plan to get our state moving in the right direction again.

1. Create Jobs and Promote Economic Growth

Without question, making sure that we have an environment to create good, high-paying jobs is the most important job our next governor will face. We need to become a magnet for good employers, not repel them with high taxes and cumbersome bureaucracy. While we are not an employer-friendly state now, I will move heaven and earth to make sure that we become the most job-friendly state in the nation.

To jumpstart growth, we need to cut taxes that are strangling our small businesses. In addition to Governor Lynch‟s LLC tax, we also have seen many other taxes, like a massive increase in the unemployment tax and yet another jump in the rooms and meal tax. These have the effect of crushing opportunity, stifling growth and limiting job creation.

We should begin by eliminating the business enterprise tax on any company that loses money. Putting a tax on a company that is already down on its luck is a great way to force it out of business and eliminate jobs. It has to stop immediately.

We also need to lower our business profits tax if we are going to be competitive again in attracting employers here. That‟s why we will lower the BPT to the lowest in the region, so that companies make New Hampshire the first place they look to grow their business.

Next, we should have rooms and meals tax holidays in off-peak times of the season to promote tourism and extend the New Hampshire Advantage. This is a great way for the restaurant and lodging industry to help move people from part-time to full-time status.

We also need to establish a job creation tax credit. If employers are growing, we should give them a tax credit against their business taxes as an incentive to expand here and add new workers. This is a sure-fire recipe to reduce the risk of adding new jobs for New Hampshire companies.

One of the greatest problems that I have heard from a number of businesspeople is that difficulty they have had in dealing with regulation and state agencies to get projects moving. As a former department head, I know that there needs to be a clear direction from the top that we need to work with companies and property owners in a consultative manner to achieve success, not take a heavy-handed approach. I did it as Commissioner of Health and Human Services and, as Governor, I can assure everybody that there will be accountability in making sure that state government does not become an impediment to economic growth and that our permitting process is reasonable.

We need to do a better job of using the resources of our wonderful colleges and university to become an incubator for growth. We have excellent research schools, like Dartmouth and UNH, and we need to tap into that knowledge to promote scientific research to create jobs.

As the former Chair of the New Hampshire Veterans Count Club, I know that we have a terrific pool of resources in our veterans, especially those returning from deployment, who can help our economy. We need to facilitate this process by having the state set up a clearinghouse, partnering with the federal government and the private sector, for veterans looking for work.

One of the most important roles that I will have as Governor will be to become the Salesman-in-Chief for New Hampshire to recruit new employers here. We have outstanding workers, outstanding resources and with a better business environment, we will have the best case to make to bring companies and jobs here. I want the traffic jams to be coming into New Hampshire every day because we have too many jobs so that people from other states are coming to work here, not having our workers leave every day.

Finally, the people here in Derry know that the artery that feeds the heart of our economy is I-93. We need to make its expansion a clear priority of our transportation system statewide.

2. Cut Spending

State government needs to be put on a diet after the spending binge of the past four years. We cannot continue to subsidize the out-of-control growth in Concord to pay for an ever expanding state government. New Hampshire must start following the lead of states across the country and

start becoming more efficient and using the best practices of others in both the public and private sector.

Upon taking my oath as Governor, one of my first acts will be to sign an Executive Order to balance this year‟s deficit, without tricks or borrowing.

Next, I will direct all state agencies to prepare budget plans to reduce state spending by 10% for the upcoming biennium.

To do this, we will initiate a top-down management review of each state agency to ensure that every area of government is utilizing best practices of other states and the private sector. While I know it is fashionable to say that someone is doing zero-based budgeting and then continue to do business the exact same way, I know as a consultant who has worked with both private business and other state governments we can find inefficiencies and fix them, because that‟s exactly what I have done the past two years.

One example of this is in our state‟s Medicaid program. Over 40 states nationally have a Medicaid managed care program, leaving New Hampshire far behind in bringing best practices here. A report by Anthem showed that by bringing to Medicaid the same types of care systems that most workers already have, we could save the state nearly $300 million a year, and this was a conservative estimate.

We also should follow the lead of states like Wisconsin and New York, who are successfully consolidating back office functions to enhance the value to their taxpayers.

One change that I will absolutely fight to deliver is to pass a constitutional amendment to add a line-item veto to New Hampshire‟s budget. 43 states nationally have this common sense tool to rein in government and we need one now.

3. Cut Taxes and Fees

The impact of tax and fee increases on the working families of New Hampshire has been devastating. From new fees to register cars, to new taxes on beer and wine, to taxing gambling winnings and even requiring a license to go salt water fishing, there seems to be no end in sight to the ways the folks in Concord will try get into our wallets. We will repeal some of these taxes and fees on New Hampshire citizens passed over the past two budgets so that people in the State House know that nickel and diming the citizens of New Hampshire is not an acceptable practice.

To ensure that this process of chasing every last dollar to continue to grow government does not repeat itself, we will protect the state‟s taxpayers by putting in place a constitutional amendment to require a 3/5th supermajority to raise taxes in the future. The big spenders will know that they cannot simply add new taxes on the backs of New Hampshire residents.

I will also today make my absolute commitment to veto an income or sales tax that comes to my desk. Not now, not ever, would I consider signing a broadbased tax. It‟s wrong for our economy and it‟s wrong for our values.

4. Balance the Budget with Honesty, Fiscal Responsibility and Transparency

Over the past two budgets, Governor Lynch has led efforts to cover his budget deficits through borrowing, hoping for federal bailout money and using accounting gimmicks. The time has come to deal with our citizens honestly and openly about the people‟s budget.

The state must begin by stopping using accounting tricks, inflated revenue figures and attempts to raid private property as a means to continue to spend more for a growing government. We also have to stop borrowing from our children‟s future to pay for operating expenses today. No family can survive by using its credit card to pay the electricity bill, and the state should try to do the same.

The state must stop asking our department staff, those who know the most about their budgets, to produce only "maintenance" budgets to continue to do business the same way in perpetuity. All departments should be given the chance to make reduction ideas as well so that they are constantly looking for new ways to do business more efficiently.

Through the budget process, the state must make the public know exactly where their tax money is being steered by making the entire process transparent by placing effort on line with all relevant documents available to the public.

Finally, once the budget is passed, the state must engage in "Truth-in-Budgeting," a quarterly review comparing revenues and spending relative the budget plan and mandating adjustments to ensure that deficits are nipped in the bud.

5. Provide Leadership

The credibility of government derives from its leaders. If the public does not trust its leaders, the state cannot maintain its moral authority to deliver services effectively.

As Governor, I will project leadership by letting the public know exactly the direction that the state should go, and then putting my energies in taking New Hampshire down that path. This means keeping one‟s word about what one will do, making tough decisions with certainty and being accountable for the actions of state government. The public deserves no less, and I consider it a bare minimum for anyone who would call himself or herself a leader.

6. Defend New Hampshire

States like New Hampshire face a seemingly never ending assault on their rights by an ever encroaching federal government. We must stand up to Washington and let them know they may not run New Hampshire the way they have mismanaged their level.

One of my first acts as Governor will be to direct the Attorney General to have New Hampshire join the 22 other states that have filed suit against the federal government to block the Obamacare overreach into states‟ rights. We simply cannot and will not accept the outrageous mandates from Washington that this bill presents -- over $1 billion in cost shift to state taxpayers over 10 years. That‟s unacceptable and we will not lie down and get steamrolled by the federal government.

We will also join with other states to stop the growing efforts to regulate states through mandates and micro-managing state and local functions like health care, education and law enforcement. We need to remind Congress and the Administration that there is a 10th Amendment and that we expect them to follow it.

7. Support Education and Demand Results

The discussion about New Hampshire‟s educational system has focused on financing for the past decade. It‟s time to shift the spotlight back where it belongs -- the quality of what our children are learning. My wife is a career counselor at Londonderry High School and I have two teenage daughters, so this is a critical issue for me.

No discuss of quality can begin until we can restore local control of our schools by passing a constitutional amendment to get the judges out of setting educational policy. Historically, education has always been a local issue for New Hampshire, so we should let the voters have a chance to restore the value of education within our communities.

With a constitutional amendment in place, the state still needs to have a role in targeting aid to communities in need. However, this will be done without a statewide property tax, without donor communities and without massive interference in local school policy.

The state has an important responsibility to ensure transparency by encouraging local communities to make clear their specific educational goals and to make sure that each parent has an opportunity to get information online so that they can make the most informed decisions possible.

The state should work hard to foster competition that increases school performance and ignores special interests. No parent should be forced to send their child to a bad school.

To accomplish this, the state will work to break down barriers and regulations for home schools, charter schools and other forward thinking educational environments. Our world is evolving rapidly, with tremendous use of technology, and we need to make sure that New Hampshire is in the forefront of using all these tools to create the best options and alternatives for parents to ensure that their children are getting excellent opportunities to learn and grow.

We also must make sure that our children have the chance to take advantage of post-secondary education here in New Hampshire by ensuring that tuition for UNH, Plymouth State and Keene State, as well as our community college system is kept affordable. We need to make sure that we require the same management techniques of a top-down review of these schools to ensure that

they are running as efficiently as possible. Everyone must pull together to ensure that our high school graduates have the chance to gain valuable skills to enter the workforce.

To that end, we must also work to keep our best and brightest here in New Hampshire. We see too many of our most talented students leave the state, never to come back. To encourage them to stay here and attend our fine USNH schools, we will establish and fund the Granite State Scholars program, a merit-based scholarship program to get the leaders of tomorrow to remain right here.

8. Reduce Health Care Costs

Our businesses and residents are struggling today with the high cost of health care. These expenses are costing us jobs and making New Hampshire less competitive. Many of these problems can be fixed without a massive government takeover of the health care system, but it takes a willingness to tackle the real problem in health care -- the lack of transparency and competition.

Any discussion about reducing health care costs has to begin with empowering consumers to make their own decisions. The more that people know about the costs, effectiveness and alternatives of the various health care options, the better, and less expensive, decisions they will make to rein in expenses.

To lift the veil on health care costs, the state should expand and simplify the information available on its website to make pricing and effectiveness information as easy to access as possible. Once we can get this data out, people can begin to take advantage of its value.

We should also expand competition by allowing New Hampshire residents to purchase health insurance from anywhere in the United States, so that the public can shop around and drive down costs. According to a recent survey by an insurance trade group, the average cost of a health insurance policy in Wisconsin in less than half of what it is here. If our employers and residents could buy insurance from there, it could mean more money in the pockets of working families here.

Of course, part of the reason our health care costs are high is because of the enormous mandates that we have placed on insurance here. We need to provide relief from these regulations to allow our insurers here to compete as well. There‟s no reason that if you want to buy a car, you should be forced to buy a Cadillac.

While increasing transparency and portability will help to drive down costs, New Hampshire also needs to do a better job of eliminating frivolous medical lawsuits.

Finally, New Hampshire should join the other states in passing the Health Care Freedom Act to protect individuals‟ rights to participate or not in any health care system without fear of government fine or penalty. Passing laws in Washington should not mean that New Hampshire should give up its right to defend our residents.

9. Modernize State Government

New Hampshire residents deserve a government that is open, accountable and transparent. The more that people know about how the state does business; the less influence special interests will have over how government works. Empowering our citizens is a critical tool to delivering government that is truly representative.

The Internet is a powerful tool for disinfecting state government by bringing more sunlight to how business is done. The state must take greater advantage of online tools to open up government to the public.

The state should start by immediately and readily posting budget, audit and expense data online. The State of Louisiana is a model for this by allowing people to sort through any check over $5,000 that the state writes. That‟s a good place to start, but we should also put contracts that the Executive Council will vote on online as well.

We also need to improve connectivity to local communities, so that many more state functions can be accomplished online, such as car registration, license renewal and state permits. The technology currently exists for this; it‟s just a matter of having the will to implement it.

One of the greatest untapped resources in state government remains our state employees. They have an extraordinary amount of knowledge to make government work more efficiently and effectively. We need create a forum to empower these workers to bring forth their ideas. As Commissioner of Health and Human Services, I set up a council of employees to offer this venue. As Governor, I will do the same.

One of the best things that Woodrow Wilson ever said was that it was "more blessed to repeal than enact" in government. He was surely right and we need to take his advices at the state level.

This means that we should immediately begin cost-benefit analyses for the various boards, commissions and committees to remove those whose usefulness has run its course. However, we should not stop there, but continue to analyze state laws to see which no longer make sense and eliminate them.

Another area where we can get tremendous value is by setting up a "Lend a Leader" program with the private sector. This would involve businesses lending top staffers to state government for a period of time to use their knowledge to assist state employees in bringing private sector solutions to state government. This is a program that other states have implemented successfully and New Hampshire should take advantage of this opportunity as well.

10. Support Local Government

I believe that the best government remains the one closest to the people. That‟s why we must stand up for our local communities and give them the flexibility and tools to succeed.

This means that the state must stop downshifting costs to state government, as Governor Lynch did this past budget by scaling back revenue sharing and rooms and meals tax revenue to pay for more state government. This is robbing Peter to pay Paul, and we need to stop this immediately.

The state should also pass a law to allow local communities to pass ordinances to cap spending. The voters have indicated in these cities and towns that they want a mechanism to cut spending, and the state should support these citizens.

Together, these ideas will return New Hampshire to the path of fiscal responsibility and will result in more jobs here. I am thrilled to have a chance to share them here today and will be even happier to put these ideas in place.

Thank you

John Stephen

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