Legislative Leftovers for 2021

While lawmakers crammed more than 300 pages of bills into the last legislative session, they left even more bills in cold storage. Many of those bills had some form of bipartisan support. Here are policy proposals legislators will likely revive in 2021:

Affordable Housing Incentives
Legislators introduced several 2020 bills that would create incentives for developing affordable housing. Some bills would expand economic development or community revitalization tax credits for affordable housing. Another proposal would decrease the real estate transfer tax for first-time home buyers. None of these proposals survived the legislative shutdown due to coronavirus. Instead, legislators passed a bill to add protections for renters facing eviction.

Paid Family and Medical Leave
Gov. Chris Sununu and Democrats support a paid family and medical leave program, but disagree on how to implement the program. The Democrats’ proposal would charge employers 0.5% of wages per employee and provide up to 12 weeks of paid leave for all workers. Gov. Sununu proposed a privately run program, based on a pool of state employees, with varying premium payments depending on circumstances. At this point there is no sign of a compromise, but the concept is popular enough that it will probably get another look in 2021.

Protections for Pregnant Workers
Sen. Jeb Bradley (R-Wolfeboro) introduced a bill that would require employers to provide accommodations related to pregnancy and childbirth. The bill unanimously passed the Senate but was not included in any of the final “omnibus” bills of 2020.

Road Usage Fee
As drivers switch to fuel-efficient vehicles, NH has seen a decline in gas tax revenue. One possible response is to supplement the gas tax with a road usage fee. Drivers would pay the fee annually based on their car’s miles per gallon or miles traveled.

Legislators have proposed multiple road usage fees over the past few years with varying levels of bipartisan support.

Opponents argue that drivers are already overtaxed and/or the state shouldn’t punish people for driving fuel efficient vehicles. With the state facing a revenue shortfall, however, a road usage fee may gain traction in 2021.

Renewable Energy Programs
New Hampshire requires utilities to obtain a certain percentage of electricity from renewable energy sources each year, peaking at 25% in 2025. This past year legislators considered bills to increase those goals through 2040. As 2025 gets closer, expect more bills to extend this program.

Legislators will also probably revive proposals to expand eligibility for net metering. That program compensates small energy installations for the electricity they generate (think solar panels on a roof). Legislators have passed several versions of essentially the same bill, so it seems likely they will try to expand the program again in 2021. Sununu vetoed all the bills so far because he believes they will increase costs for low income ratepayers.

Capital Gains Tax
There were proposals in 2015, 2017 and 2019 to extend the interest and dividends tax to capital gains. The most recent proposal was linked to an increase in school funding, which will be a big debate in 2021 as there is a lawsuit over the current funding scheme, and a commission is working on a new funding plan. With tax revenues plummeting during the coronavirus, there is a good chance lawmakers will contemplate a capital gains tax in 2021 to help fund schools.

Cigarette Tax Increase
In 2020, the NH House considered a couple bills to raise taxes on tobacco products. None survived the coronavirus shutdown.

While NH has the lowest tobacco tax in New England by 20 cents, legislators are hesitant to increase a tax that primarily affects low income families. Low income residents are far more likely to smoke than higher income residents, and they spend a larger share of their income on cigarette taxes.

Now that NH is projecting a budget shortfall around $500 million, legislators are going to be hunting for revenue.

Marijuana Legalization
New Hampshire’s projected revenue shortfall may also persuade some legislators to reconsider legalizing and taxing marijuana. The state legislature votes on marijuana legalization almost every year, and 2021 should be no exception.

Anna Brown is director of research and analysis for Citizens Count in Hampton. For more information, visit CitizensCount.org.