Cut Taxes, Add Jobs?

Cutting the state's insurance tax by one point could mean attracting more insurance companies to the state, adding 2,700 to 3,400 jobs to the state's economy and generating $100 million to $125 million in economic activity. All that, and the state would still increase revenues from the previous year.

Those are the conclusions reached by a recent report compiled by Charles Arlinghaus, president of the Josiah Bartlett Center for Public Policy in Concord. "This is exactly the right time [for such a tax cut]" Arlinghaus says. "While New Hampshire has been attracting some financial services jobs, we're losing insurance jobs."

Arlinghaus states that a report on the 21st Century Economy conducted a few years ago for Network NH identified the financial services industry as one of the key components of NH's new economy. "The financial services sector, which promises to be one of the faster growing sectors of the economy, offers both high wage jobs and entrylevel training jobs, takes advantage of New Hampshire's natural advantages, and is quite friendly to our environment and infrastructure," Arlinghaus states in the report.

Arlinghaus points out that in the past few years, four NH companies moved their headquarters and jobs to other states, three of which went to lower-tax states Nebraska and South Carolina, which have insurance tax rates of 1 percent and 1.25 percent versus the 2 percent rate in NH.

Ohio is also attracting insurance companies with a 1.4 percent rate.

"Without a rate reduction, New Hampshire will continue to see companies and jobs leaving the state for lowertax destinations," Arlinghaus explains. "If we cut the tax now, we'll lead the pack and won't be playing catchup. We will be dramatically lower than anyone east of Ohio and north of Carolina."