Jim Roche: For the business community, NH is at a crossroads
The recent announcement by advanced manufacturer Sturm, Ruger to expand operations into North Carolina rather than New Hampshire was not a surprise to most business leaders to whom I spoke. New Hampshire, once undoubtedly the friendliest place for business in the otherwise expensive, sometimes business-hostile northeastern United States, has lost some of its advantage.
To be sure, New Hampshire’s quality of life and natural environment are among the nation’s best. And legislators and the governor deserve praise for recent pro-business initiatives, such as strengthening the state’s research and development tax credit, updating New Hampshire’s business statutes governing corporations and limited liability companies, enacting job training programs, supporting higher education and more.
Nevertheless, sophisticated advanced manufacturers and high technology companies — on which this state depends more than any other type of business for jobs, compensation, wealth generation and stimulus throughout our economy — weigh dozens of factors when determining where to grow, including business taxes, environmental and labor regulations, energy costs, health care quality and cost, access to STEM-educated and workplace-ready employees, a state’s right-to-work status and more.
New Hampshire does not compare well on some of these factors. Electricity costs are sixth-highest in the nation. Health care costs are equally expensive. Our corporate income tax (the business profits tax) at 8.5 percent is one of the highest in the country. Environmental regulations and the permitting process are sometimes more time consuming and expensive than in neighboring states. And we’re not a right-to-work state (which most employers prefer).
In addition, advanced manufacturers and high technology companies commonly lament a lack of STEM-educated, workplace-ready young people able to fill an increasing number of vacancies caused by our aging workforce.
Clearly, two bright New Hampshire advantages are the absence of income and sales taxes. These, combined with our high quality of life and beautiful natural, historic and cultural resources, make New Hampshire a great place to live and raise children. Increasingly, however, these advantages are not enough to convince existing New Hampshire companies to expand here or out-of-state companies to expand in New Hampshire. That’s not to say it doesn’t happen. It is to say it is happening less than it should.
Advanced manufacturers and high technology companies have never been more mobile than they are today. They are no longer rooted in place by buildings and equipment. As head of New Hampshire’s statewide chamber of commerce, I consistently hear from my members about growth they are undertaking (such as new investment in jobs and equipment) elsewhere, outside of New Hampshire.
The New Hampshire Center for Public Policy Studies published a report several months ago titled, “Tailwind to Headwind: NH’s Shifting Economic Trends.” That report, combined with Sturm, Ruger’s well-publicized decision to expand elsewhere, should serve as notice to public policy makers that New Hampshire is at a fork in the road.
One road leads New Hampshire toward becoming just another expensive, business-hostile, northeastern U.S. state. The other road, if public policy makers choose to embrace it, will lead New Hampshire to stand alone in the Northeast as a place where advanced manufacturers and high technology companies thrive, adding new, high-paying jobs; investing in technology and equipment; and stimulating our economy like no other sector. In the Northeast, that’s the road less traveled. But it’s the one that will make all the difference for New Hampshire.
Jim Roche is president of the Business and Industry Association.