The New Hampshire advantage

By Matthew Gagnon

New Hampshire and Maine are very similar in many ways. They are both rural in character, with populations of around 1.3 million people, and both are filled with rugged, hard-working people with a distinct culture. 

Yet for all their similarities, Maine and New Hampshire are also different in many ways, most notably in the political culture that has developed in each.

Never has that been on display more than in the period of time surrounding the pandemic, as Gov. Chris Sununu and Gov. Janet Mills — and their respective legislatures — have pursued very different approaches to managing the public health challenge presented by COVID-19. 

Generally speaking, Sununu and New Hampshire lawmakers favored a lighter touch, and seemed slower to institute restrictions, while insisting on the participation and collaboration of the elected legislature, which returned to work last June. 

Maine’s instinct, by contrast, seemed to be far more cautious and restrictive on everything from mask wearing, to crowd size limitations, and travel restrictions. And, of course, Maine lawmakers adjourned last March for nearly the whole year, content to allow Mills to run the state via emergency powers. 

Those different reactions ultimately stem from the very different philosophies of the people of each state. Where does this difference come from? For my part, I look back to the early 1970s. 

In 1971, Maine considered a referendum that asked citizens whether or not they wanted to repeal the income tax, which had been created at the behest of Gov. Ken Curtis in 1969. In the end, voters chose to reject the attempt to repeal it.

In New Hampshire, by contrast, something interesting happened in 1972. That year a little-known politician named Meldrim Thomson was attempting to win a race for New Hampshire governor, and was seeking a way to stand out from the crowd. He decided to try a new approach, making his primary message one of antipathy toward taxes, coining the term “ax the tax” and asking candidates for office to join him in taking a pledge to “practice economy and frugality.” 

At the time, there were many calling for New Hampshire to adopt an income tax, as Maine had, to raise more revenue for the state and provide more services to citizens. Unlike Maine, however, the anti-tax message caught on and Thomson was able to defeat the incumbent Republican Gov. Walter Peterson in a primary, and then win the governorship that November.

As New Hampshire grew more economically prosperous, politicians and voters in the Granite State came to see the difference in their state as “The New Hampshire Advantage,” and fiercely defended their approach as a selling point for economic development in their state. 

This month, though, the differences between the two states grew even more stark as each moved toward passing their respective state budgets. 

In Maine, spending continues to grow, while in New Hampshire they have actually cut — yes cut — General and Education Trust Fund spending by $172.5 million. New Hampshire also eliminated the tax on interest and dividends, which actually makes the state completely income tax free for the first time. They also cut business tax rates and cut the statewide property tax. In addition New Hampshire pursued major reforms, such as the creation of Education Savings Accounts, which will radically increase choice in education for students and parents.

But most amazingly of all, inside the new New Hampshire budget, lawmakers agreed to language that would grant the state legislature more authority during states of emergency. Legislators have now limited the governor’s powers, requiring a session of the Legislature be called after 90 days of an official state of emergency. Once in session, it would be up to lawmakers, not the governor, to uphold or end the emergency declaration. 

Maine prides itself on its motto, “the way life should be.” I have a suggestion, though, for our neighbors in New Hampshire. Consider a new motto of your own: “The way government should be.” 

Gagnon of Yarmouth is the chief executive officer of the Maine Policy Institute, a free market policy think tank based in Portland.