Economic expert warns of impact of global competition on New Hampshire
CONCORD -- New Hampshire's low-tax and low-cost reputation
as a place to do business is not enough to succeed in a
global economy, a leading New England economist told legislative
budget and tax bill writers Tuesday.
The new legislative leaders in charge of writing the next
two-year budget -- and finding the money to pay for it --
got this sobering forecast from Ross Gittell, vice president
of the New England Economic Project.
"Low taxes, low real estate taxes and relatively low
costs, except for energy, that's been a source of economic
advantage for some time," Gittell began.
"We are now competing, not just with Vermont and Massachusetts,
but with China and India. We can't rely on a low-cost advantage
to sustain a high-income, high quality-of-life economy."
The House and Senate Finance and Ways and Means Committee
hosted the first of three days of extensive background sessions
as lawmakers began their 2007 legislative efforts.
The Democratic takeover of the Legislature for the first
time in more than a century has its leaders working overtime
on economic and budget briefings.
Today, Stephen Norton, executive director of the New Hampshire
Center for Public Policy Studies, will unveil a report on
state budget trends for the past 10 years.
Administrative Services Commissioner Donald Hill will speak
on the effort to overhaul the state budget, and financial
reporting known as the Enterprise Resource Planning project.
Attorney General Kelly Ayotte will speak on the school
finance case and lawsuits regarding a former prison guard
charged with sexual harassment.
Since the early-1990s, New Hampshire has led the region
on job growth, low unemployment and high per capita income
of its residents.
But, Gittell said, over the next three to five years, the
entire Northeast will slump and New Hampshire will lag behind
the nation on economic growth.
"New Hampshire is a leader in New England, arguably
in the whole Northeast. This part of the country is lagging
behind the U.S. growth, and the country's growth has moderated,"
Gittell said.
The slump in the real estate market seems headed for a
"soft landing," Gittell continued, but all bets
are off if the Federal Reserve raises interest rates.
New Hampshire's employment will only grow about 1 percent
a year through 2010, and Gittell said there's a silver lining
to that.
"Some people see this a relatively good news because
there were concerns in the 1990s that New Hampshire was
growing too fast and developing problems with sprawl and
over-development," Gittell said.
"Some of this moderate growth gives the state time
to set policy."
Robert Tannenwald, with the Federal Research Bank, said
the American middle-class is "tapped out" in consumer
debt again and the nation has enjoyed an economic recovery
that had little job growth.
"We have a jobless or even job-loss economy,"
he said.
2%
economic growth seen in '07