COMMENTARY

Concord's Signals to Business Must Be Sterling

June 2005

By Donald J. Pfundstein*
for New Hampshire Business Review

Did you hear that big flushing sound? Unfortunately, that was the Defense Department sending $123 million in payroll out to sea on the Piscataqua tide.

Closure of the Portsmouth Naval Shipyard is a significant short-term economic loss, but a long-term planning and development opportunity. The good fight must be fought, as Governors Lynch and Baldacci and their respective congressional delegations have launched. However, I agree with those writers who recommend a simultaneous planning process for a post-shipyard economy.

One thing is absolutely certain — Concord must assure that its legislative enactments and its executive pronouncements send a sterling message to business. Simply put, our political infrastructure must send a signal loud and clear that New Hampshire is a business-friendly state. That we want your investment.

That our laws will protect your property interest in those investments. And that New Hampshire is a wonderful place to live, work and raise a family. This message should be repeated often.

A sterling message needs to be consistently delivered because it will take time — perhaps a decade or more — to replace the economic engine we are likely to lose as the result of the Defense Department's recommendation.

Pease International Tradeport is a great example of reasonable planning, excellent leadership and the hard work of both the public and private sectors. Without a sterling message, business will be reluctant to provide the economic stimulus and the good incomes that will need to be replaced in the post-shipyard era.

New Hampshire's Legislature is currently reviewing Senate Bill 104 which is designed to eliminate certain pollution control tax exemptions which will adversely affect and increase the tax liability of some of the state's more significant employers and taxpayers.

This is after investment decisions based in part on the value of the pollution control tax exemption have resulted in hundreds of millions of dollars being invested in New Hampshire as opposed to another state. Affected businesses pay substantial real estate taxes, some to local, county and state governments. Substantial jobs and local purchases are the norm. Yet SB 104 is designed to change the rules of the game on these businesses now that the investments have been made.

The Legislature should periodically review public policy. Where warranted, it should change that policy. However, changes adversely affecting multimillion-dollar investments should be made prospectively, not retroactively.

New Hampshire's word to business must be reliable. If changes in public policy are to be made, they should not purport to impair vested legal rights under existing statutes or abrogate terms and obligations of a contract. Focus prospectively.

New Hampshire's word to business must be sterling. If New Hampshire's collective word as memorialized in legislative enactments is not reliable to the business community, it will be enormously difficult to recreate the success embodied at the Pease International Tradeport.

Let's all do what we can to stop that flushing sound. Concord can assure that it send only a sterling message to business.

*Donald J. Pfundstein is admitted in New Hampshire.

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