Growing the economy is a top priority at the federal and state levels of government, but NH faces some significant challenges that could impede that goal. Workforce constraints remain at the forefront of the minds of business leaders and state policymakers concerned with ensuring NH maintains a strong economy. The success of workforce initiatives such as the 65 by 25 program, which aims for 65 percent of adults in NH to have a post-secondary degree or certificate by 2025, depend on ensuring that children and adults are healthy and ready to learn to achieve their goals.
New Hampshire relies on federal funding for many programs that help low-income children and families access food and health care, but federal policy changes may impede progress in these areas. At the same time, NH faces a tight housing market that pushes prices out of reach of many, and the state struggles to maintain vital infrastructure. The state has critical decisions to make as to how to fund these areas.
Education and Health
With an unemployment rate at 2.7 percent, there is a focus in the state on expanding the pool of available workers. While the children being educated in local school districts now are our future workforce, investments in their education are often driven by the level of resources available in local communities.
The state’s adequate education grant starts at $3,636.06 per pupil for the current fiscal year, with increases for certain children based on poverty status, test scores or special needs. For the 2016-2017 school year, the Department of Education estimated school operating expenses were $15,310.67 per pupil, and that does not include transportation, building construction and certain other costs. Relatively low levels of state aid means property taxes drive local investment decisions. At the same time, public funding for higher education in NH, which falls behind levels in every other state, adds to financial pressures that may constrain the state’s workforce development efforts.
It is essential that NH families have enough food on the table to ensure that children are well-fed and ready to learn. It is also important that people maintain good health so they can achieve their goals, access economic opportunities and participate as productive members of the workforce.
New Hampshire relies heavily on federal funding to ensure that food and health care are available to low-income children and adults. Programs such as the Supplemental Nutrition Assistance Program (also known as SNAP or Food Stamps), the Children’s Health Insurance Program, and the traditional and expanded Medicaid programs may face federal funding changes that would limit the state’s ability to meet these needs. Expanded Medicaid, which more than 50,000 low-income NH residents currently rely on for access to health care, continues to be debated in the legislature. Policymakers should consider the broad, long-term benefits of continuing this program, which aids many low-income workers and remains an essential element in the state’s effort to address the ongoing opioid crisis.
Housing and Transportation
Housing availability is a critical issue that limits NH’s economic growth in both the near term and the long term. According to data from the NH Housing Finance Authority, rent increased about 4.4 percent from 2016 to 2017, and home prices increased by about 9 percent between June 2016 and June 2017. The primary driver of these increases is low housing supply; the vacancy rate for two-bedroom apartments statewide is 1.4 percent, while a healthier rate would be 4 to 5 percent. The development of more affordable housing would help to ease this strain, but the recent reduction in the corporate tax rate as part of federal tax reform may impact the Low-Income Housing Tax Credit Program.
These federal rate changes will likely make the tax credits less valuable and may result in a reduction in new development at a time when NH needs to increase the availability of housing that is affordable to everyone.
New Hampshire’s physical infrastructure has been hindered by underinvestment that creates risks for, and constraints on, the state’s economic vibrancy. The NH Department of Transportation reports that 1,172 miles, or 28 percent, of state-owned roads are in poor or very poor condition. The department projects the number of state-owned structurally deficient bridges will increase from 140 in 2017 to 159 by 2028 at current rates of repair and replacement.
Municipal roads and bridges also face challenges; approximately one out of every five municipal bridges were “red listed” at the beginning of 2017. Municipalities across the state are also challenged with how to address aging water systems and other infrastructure in need of repair or replacement.
AnnMarie French is interim executive director of the NH Fiscal Policy Institute, an independent nonprofit, nonpartisan public policy research organization based in Concord. Learn more at www.nhfpi.org.
Current Issue - May 2024