How Does New Hampshire Do It? An Analysis of Spending and Revenues in the Absence of a Broad-based Income or Sales Tax
New England Public Policy Center
Research Report No. 11-1
by Jennifer Weiner
This report seeks to understand how New Hampshire has avoided a broad-based income or sales tax by examining the factors that drive the state’s lower-than-average per capita spending and the revenue sources the state relies on to pay for that spending in lieu of an income or sales tax. It presents comparative data for the six New England states and discusses some of the impediments faced by other states in the region interested in emulating New Hampshire's fiscal model.
The author finds that New Hampshire's below-average spending is due to a combination of policy choices and favorable circumstances that the state faces, such as a relatively low poverty rate. States with needier populations or higher input costs may need to spend more than New Hampshire does to provide a given level of services. On the revenue side, New Hampshire state and local governments collectively rely more heavily on property taxes than any other New England state. However, the state government's revenue system is more diverse than those of its regional counterparts and possesses several unique features, such as the business enterprise tax.
This report does not advocate for a particular fiscal model. However, by illuminating how and why New Hampshire differs from its neighbors, it aims to inform policymakers’ discussion in states across the region and nation as they grapple with how to provide services in fiscally challenging times.
- Related research
- Presentations
- Appendices
The Fiscal Capacity
of New England 
by Matthew Nagowski
NEPPC Policy Brief 07-4
Measuring
Fiscal Disparities Across the U.S. States: A Representative
Revenue System/Representative Expenditure System Approach,
Fiscal Year 2002
by Yesim Yilmaz, Sonya
Hoo, Matthew Nagowski, Kim Rueben, and Robert
Tannenwald
NEPPC Working Paper 06-2
To review other Center research about state and local public finance, please visit our research index.
How Does New Hampshire Do It? An Analysis of Spending and Revenues in the Absence of a Broad-based Income or Sales Tax
New Hampshire Forum on the Future (April 21, 2011)
Webcast: Presentation of research, summary of main findings 
(April 12, 2011)
Comparing Expenditure Levels Among New England States: Is New Hampshire's Low Spending a Matter of Choice or Lucky Circumstances
Lincoln Institute of Land Policy and NEPPCs Economic Perspectives on State and Local Taxes (January 21, 2011)
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