Envy thy neighbor

From Kittery Point to Rhubarb Pond on the Canadian border, Maine and New Hampshire share a 157-mile border. It’s Maine’s sole physical connection to the rest of New England.

Yet, it’s as if an invisible fence emerging from the Piscataqua River north to the Androscoggin separates these two mostly rural states. Our governing processes, our tax philosophies and our economic profiles — Maine’s and New Hampshire’s — are vastly different.

Politicians and bureaucrats love to cherry-pick data and statistics that support pet projects and ideologies. It’s human nature. However, governing must be accountable and must produce results that benefit the governed year after year.

This past May, the nonpartisan Hassenfeld Institute for Public Leadership compiled state rankings reports drawn from 12 public policy institutions. The Hassenfeld summary goes into depth on the many litmus tests that define each state’s strengths and liabilities. The report imparts context to the surveys and collected data without the spin common to press releases. We are presented with an unblinking verdict identifying what public policy, tradition and government decisions have actually produced.

The compilation data is stunning.

In many of the selected reports, Maine lagged far behind New Hampshire for competitiveness for new industry, tax burden, cost of doing business, workforce education, infrastructure, regulatory environment and labor supply. New Hampshire came in, nationally, as the 15th best state in terms of business climate and taxation — the best in New England, by a long shot. Maine’s average score designated our state the 34th best for business climate, trailing every other New England state except Connecticut.

Geographically, southern New Hampshire (Nashua, Manchester and Concord) is the economic engine. Connected, as it is, to Massachusetts, the southern reach fuels the whole state. Similarly, Maine’s two southern counties — York and Cumberland — with their proximity to northern Massachusetts, also provide the horsepower to propel a portion of Maine’s economy. In other respects, Maine and New Hampshire are nearly identical: rural, aging populations, low population density, waning woods products industries, older housing stock, safe, small communities.

But the rub becomes apparent when one studies the data. While the populations of the two neighboring states are nearly the same (1.3 million), Maine’s population is spread out over four times the land mass. With no sales tax and no income tax, New Hampshire residents get to keep more of their own money; with the median income level at $70,936 a year — a full $20,000 more per year than Mainers — that’s a lot of money to use even if New Hampshire property taxes are higher than Maine’s.

The New Hampshire data reflects a national trend: states that don’t assess income taxes or sales taxes have more robust economies than the states that do. Citizens want local control of taxes. When states leverage high income and sales taxes for pet programs, citizens have little say in where and how the money is are spent. While property taxes are the bane of many, and can be misused, property taxes are the most controllable of any taxes levied — because these are the taxes that are approved at the municipal level, not at the statehouse. In most towns, the citizens themselves approve the property tax burden at their annual town meetings. In larger towns and cities, elected councils set the budget — but they do so locally. It’s direct democracy. The word itself is a compound of two Greek words: “demos” is “people” and “kratos” translates “power.” In a democracy, the power belongs to the people.

The New Hampshire General Court has 400 representatives and 24 senators, slightly more than double Maine’s legislative body. Yet these representatives have created a climate of success that has eluded Maine’s Legislature. When studying the comparative data from credible sources, Maine isn’t playing the same game. It’s not even the same sport, let alone being on the same field as New Hampshire when it comes to business climate and economic success.

Let’s look over the fence at our neighbor and learn some lessons.

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