3 sides of the nickel

Gov. John Lynch dismissed the last-minute tax cut proposal that was trumpeted by House leadership (see “Speaking of Gas Prices“). Lynch said he wouldn’t have to veto Senate Bill 78 because the Senate won’t pass this “political gimmick” that could chop an estimated $6.5 million out of the state’s Highway Fund, which is used for road and bridge construction and maintenance.

House Majority Leader Rep. D. J. Bettencourt (R-Salem) countered with enthusiasm, suggesting an economic development chain reaction would unfold if the measure passes. While New Hampshire already has the lowest gas tax and prices in the region, Bettencourt said, “Expanding this margin by another 5 cents would result in more out-of-state residents coming to New Hampshire to fill their gas tanks. While they are here, visitors will also take advantage of our low tax environment and purchase other goods, including cigarettes, liquor and lottery tickets. This will help to drive up state revenues, as will the business profits taxes of the local gas stations benefiting from the additional business.”

On the other hand, Senate Finance Chair Chuck Morse (R-Salem) told the Concord Monitor he wondered whether oil producers would benefit most from the gas tax reduction. The Senate also wasn’t ready to embrace the math attached to the House cigarette tax reduction bill (lower taxes = greater revenues) when it tabled House Bill 156 yesterday (see “The Price of Taxing Tobacco“).

Steps of the dance

While it may appear that the Senate is playing bad cop to the House’s good cop when it comes to tax cuts, this is a traditional legislative dance of differing assumptions and priorities. It can and does work both ways, as Sen. Lou D’Allensandro (D-Manchester) found out in 2010 when he managed to get an expanded gambling bill through the Senate — only to run into a wall of opposition and skepticism in the House.

The reality is that this stage of the game is nearly all political posturing. The tax cuts that have been passed by the House or tabled in both the House and Senate remain very much in play. It’s the final House-Senate conference committees, where the two chambers’ differences are worked out, that will reveal the Legislature’s final revenue priorities come June.

This Daily Briefing was written by Michael McCord.

If you’re in retail, we want to know: Do you see more business with lower taxes?

(Comments below, policy here.)

Rep. Rip Holden (R-Goffstown) sponsored three bills this term to do just that. They didn’t make it far, but a fourth bill, sponsored by Sen. Lou D’Allesandro (D-Manchester) is close to becoming law.

And the three-member Liquor Commission has found itself in the spotlight again. In February, Mark Bodi, the commission’s chairman, was placed on a paid leave of absence while the Attorney General investigates whether he interfered in an enforcement action against the Railroad Tavern in Keene. Meanwhile, Gov. John Lynch fired commissioner Richard Simard on April 19, following news that he was arrested for drunk driving and refused to take a Breathalyzer test.

“There’s no immediate checks and balance, and there is no balance, to my knowledge, from any branch, in the commission itself,” Holden says.

Commission Oversight

Holden’s House Bills 421 and 1504 called for an oversight commission to monitor the Liquor Commission’s enforcement division. The House voted both down, handily. House Bill 1503 would establish a board to review decisions about the revocation or suspension of liquor licenses and to hear related appeals. This was referred for interim study and will be taken up again next year.

Yet the Liquor Commission may still get a closer look. Senate Bill 181 has been passed by the House and Senate and now awaits Finance Committee approval and Gov. Lynch’s signature. It will repeal a proposed transfer of the Liquor Commission’s enforcement division to the Department of Safety, and establish a committee to study how the commission operates.

The transfer—soon to be repealed—was meant to save money, but the commission convinced lawmakers it would cost more than it would save, due to personnel replacements.

The study committee would look at ensuring the commission’s appeals process is impartial and the enforcement division avoids an “overly broad interpretation of its function.” The committee also will look at the commission’s organizational structure, including whether the commission should have a single “executive director.”

Currently, three full-time commissioners are appointed by the governor and approved by the Executive Council to head the commission. Their work includes oversight of divisions for marketing and merchandising; enforcement and licensing; and administration. The commissioners also manage appeals.

“I feel if there’s one commissioner, it’s too much power to give to one person,” says Joseph Mollica. He’s currently the lone active member of the Commission until Gov. John Lynch appoints someone to fill Simard’s vacancy. Mollica, of Sunapee, joined the commission in December 2009. He has 25 years experience in the restaurant business and has owned restaurants in New Jersey, Massachusetts and New Hampshire.

“It’s a position that requires a certain amount of business expertise and political expertise. It’s a very unique business and I don’t know if you’d expect a business to be overseen by one person.”

While Holden says any sort of study of the commission’s workings is a “step in the right direction,” he’s skeptical that the study committee will take an in-depth look at the commission’s operations.

Liquor sales are big business in New Hampshire. In addition to managing over 6000 licenses and permits, the commission oversees 78 liquor stores. In the 2009 fiscal year, total liquor sales reached $493.5 million, with $122.5 million in net profit.

Because so much money and power is at stake, Holden believes an oversight committee is needed to ensure the commission deals fairly. A representative for 10 years, he also has worked in restaurants for 25 years, currently as a waiter in Boston.

Appealing Enforcement

Holden says license holders have approached him with concerns about the “overstepping” of the enforcement division and a lack of appeal options. He couldn’t offer specific examples, though, stating that the licensees were “so intimidated that they wouldn’t speak to me on the record.”

“I want (business owners) to feel comfortable going to somebody without fear of retaliation,” Holden says.

Licensees can appeal decisions by the commission, but those appeals must be filed with the commission itself. Holden says liquor license holders are reluctant to come forward with any grievances about the commission because “the commission holds their livelihood and they’re very intimidated.”

If the enforcement division finds a licensee has violated one of the state’s liquor laws, the first step in the hearing process is a sort of pre-trial hearing, in which the licensee will meet with the enforcement division to arrange a settlement. If a settlement agreement is reached, the settlement goes before the three liquor commissioners, who can either approve or deny it.

If an agreement is not reached, a full hearing with the commission is scheduled. The chief of the enforcement division acts as the prosecutor, and the licensee can provide evidence and witness testimony in his or her defense.

Licensees can ask for a re-hearing if they believe the commission violated its own rules during the hearing or overlooked important evidence. The commission then decides if a re-hearing should take place; if not, the licensee can appeal to the state Supreme Court.

“When you have a business or organization or agency of a state that is dealing with a (half-)billion dollars in revenue, it only lends itself to oversight,” Holden says. “For any one of the commissioners to say they don’t need oversight … and to have other branches of that commission say, ‘We don’t want oversight,’ why don’t you want oversight?” he asks.

Eddie Edwards, chief of the commission’s enforcement division, says that it’s natural for anyone to feel a certain level of intimidation when dealing with a regulatory body like the Liquor Commission. However, he says, the commission works closely with licensees to keep them in compliance—which, in turn, keeps them in business and keeps revenue coming into the state. Intimidating licensees would run counter to that mission.

Last year brought 29 cases in which licensees over-served a customer, according to Edwards— a relatively small number. “We can’t have this heavy-handed approach and be coming down on everybody … when you see the statistics don’t line up for that. If that was overwhelming energy in (the) alcohol industry … then you’d see more violations,” he says.

Edwards adds there are plenty of avenues for licensees to air grievances. “The enforcement division is overseen and regulated by the Police Academy, the Attorney General’s office, the Liquor Commission itself, and the Legislature,” he says. “With the commission, their boss is the governor and the Executive Council.”

While “oversight is always a good thing,” Mollica says, an oversight committee would slow down the commission’s ability to do business and bring in revenue for the state. He added that the commission’s operations are “very transparent” and pointed out the commission’s meetings are open to the public and its financial records readily available.

“I don’t feel the commission has anything to hide as a business. We are a public entity working for the good of the people of New Hampshire,” he says, adding that the appeals process is fair and the oversight of the enforcement division is “very good and very thorough.”

Holden, meanwhile, expects that, in light of Bodi’s leave of absence and Simard’s arrest, other legislators will come around to his point of view. “We’re down to one commissioner who was just recently appointed,” Holden says. “I don’t understand how anybody could say, ‘Oh, things are fine.’”

Other News

Any hopes that gambling might expand or small amounts of marijuana might be decriminalized were dashed last week by the House and Senate, respectively. Gov. Lynch indicated he would have vetoed both bills if they made it to his desk.

The House voted to kill Senate Bill 489, which would have opened the door for casinos and video slot machines in the state, with a 212-158 vote. The Senate had passed the bill in March 14-10.

Meanwhile, the Senate killed House Bill 1653, which would have reduced possession of a quarter-ounce of marijuana to a violation.

© 2008-2010 Niles Media “Front Door Politics” all rights reserved.

While the House and Senate decide whether to bring slot machines into New Hampshire to fund the state’s budget, smoke shops in the Granite State may be getting a new card up their sleeves. House Bill 392 creates a new liquor license, and it has passed both chambers.

In 2007, New Hampshire tightened its public smoking ban by adding bars and restaurants to its list of forbidden places to smoke. But, if HB 392 is signed by Gov. John Lynch, cigar bars can start serving their stogies with a swig, starting in 2010.

Rep. Edward Butler (D-Hart’s Location) co-sponsored HB 392 with Rep. John Hunt (R-Rindge). Butler doesn’t think it challenges existing policy. “There are many cigar bars … in states where smoking is banned in most public accommodations,” he says.

For the record, Butler says he is not a cigar smoker, but he thinks the bill is business-friendly. He’s not sure, however, how many shops will take the state up on its offer. “It’s a narrowly defined bill,” he says.

It’s a license to serve liquor, not to sell it for carry-out. Eligible shops would have to make at least 60 percent of their quarterly sales from cigars or cigar-related paraphernalia like humidors, cigar cutters, lighters and ashtrays.

Online and mail-order sales would not count for the 60 percent threshold, and neither would loose tobacco or cigarettes. Cigarette smoking and food service would not be permitted. “Minors” would also not be allowed in the bars, but exactly what minimum age that entails will be decided if the bill becomes a law. Finally, all job applicants at the establishment would have to receive a health warning about the dangers of second-hand smoke.

“I don’t see where it helps me any,” says Dave Ladisheff, owner of Dave’s Cigar Shop in Dover. “The way they’ve written the whole thing, it looks like they’re the ones making out,” he says. He points to the $840 annual liquor license and imagines purchasing his new stock from state liquor stores.

Ladisheff’s own customers have told him they wouldn’t be likely to buy a drink when they come in. That may make it easier for Ladisheff to keep the business dry. “I worked in night clubs for years,” he says. “Dealing with the public and alcohol is a nightmare.”

Adding insurance costs and the stress of liability, selling booze does not equate to a promising new business model for Dave’s. He does know some colleagues who are looking into expanding their business, however.

Happy Jack’s in Laconia has been in the tobacco business since 1945. Owner S. Peter Karagianis says that his current location is too small to entertain the idea of selling liquor, but he likes the law.

“They’re very gracious to let us operate our business the way we’d like. If you get my gist,” he says. Whether it relates to business or health, Karagianis says, he doesn’t like others thinking they know best.

death penalty study

Gov. Lynch is reportedly likely to sign a bill to study the death penalty in New Hampshire. House Bill 520 establishes a 22-person commission to examine capital punishment’s effectiveness in deterring crime, to measure its “decency” and the fairness with which it’s applied, to examine its costs, and to explore alternatives.

All this comes after quite a year for the topic. Two capital murder cases were tried in New Hampshire in 2008, resulting in one sentence of life imprisonment and one death sentence—the state’s first in 50 years. Five bills on the matter were considered in the current legislative session. HB 520 is the only one that passed both the House and Senate.

The very similar HB 512 also would have established a study commission, but suspended executions in the meantime. HB 556 would have repealed the death penalty altogether, and HB 557 would have banned the death penalty for cases in which the defendant pleads guilty. Still another, HB 37, provided for death by firing squad for anyone found guilty of killing someone with a gun in the act of a felony. Current practice would be lethal injection.

Rep. Jim Splaine (D-Portsmouth), who sponsored HB 520, says he worked closely with Attorney General Kelly Ayotte to strike the right balance of members on the commission. They include designates from the AG and public defender offices, law enforcement associations and the N.H. Mental Health Council.

A majority of commission members would represent relatives of murder victims and organizations concerned with the death penalty. Thirteen seats are to be appointed from the public by Gov. John Lynch, House Speaker Terie Norelli, and Senate President Sylvia Larsen.

Despite his support for the death penalty, Gov. Lynch has said he welcomes the study. Splaine says he’s hopeful the governor “will sign the bill with the good faith that it has been offered.”

Splaine also invites people “who have broad background on the pros and cons of the current death penalty laws (to) bring their talent and experience to the work of the Commission.” Anyone interested in serving on the commission, he says, is invited to contact Lynch (271-2121), Norelli (436-2108, terie.norelli@leg.state.nh.us) or Larsen (271-2111, sylvia.larsen@leg.state.nh.us).

Is allowing liquor sales in cigar bars hypocritical? 
Or should businesses be able to sell whatever they’d like? 
Share your thoughts below. 

And remember, our online learning center and a complete list of proposed laws for 2009 is available here at Front Door Politics: from the State House to your house.

A pack of smokes with that bottle of booze? One NH bill up for public hearing next week proposes selling tobacco at certain state liquor stores. Meanwhile, a cluster of insurance laws are lined up together: If you can be charged more for bad credit, can a good education earn you a discount? Also, reinstating the stack, who pays for medical bills, and a would-be change in a law on public hearings gets changed in its own public hearing.

And there’s no shortage of public hearings these days in Concord, as state committees plunge into their legislative season. A total of 66 are scheduled for next week—61 in the House and 5 in the Senate.

Following is a short selection of them, with bill titles, prime sponsors, status or hearing dates, assigned committees and analysis. A comprehensive database of legislation is available on the 2009 Bills page.

HB 71 “relative to increasing the dollar limit for requiring public hearings on issuance of local bonds.” Betsey Patten (R-Moultonborough)
In Committee, House Municipal & County Government Committee

As previously reported, HB 71 would change the dollar amount that triggers a required public hearing on local bonds. But, its own public hearing last week may have changed the bill, itself.

Current law requires a public hearing on proposed local bonds over $100,000, and Rep. Patten proposed hoisting that up to $1 million. But, she can understand that some people are uneasy with such a big jump, so she plans to bring an amendment to the committee’s executive session set for Jan. 20. The revised bill would increase the dollar amount to somewhere between $200,000 and $300,000, instead.

Patten is also looking at allowing towns to set their own trigger points for the public hearings, within parameters set by the state, because what makes sense for a small town doesn’t necessarily fit a bigger city.

The $100,000 limit has been in effect since 1885, Patten says. Adjusting for inflation, that amount would equal well over $2 million in today’s currency.

HB 184 “authorizing the liquor commission to sell tobacco products at state liquor stores located on interstate highways.” Ken Hawkins (R-Bedford)
Tuesday, Jan. 20, Local & Regulated Revenues Committee

The state may add tobacco to its liquor business, if Rep. Ken Hawkins has anything to say about it. He has sponsored HB 184, which would allow certain state liquor stores to sell smokes, too.

Only the stores “located on interstate highways” would be allowed to sell tobacco—an important caviat for Hawkins. He made the provision out of concern for private enterprises, like convenience stores, whose revenue Hawkins says he’s not out to steal. Money the state would make from tobacco sales, as with profits from liquor, would go into the general fund.

But, one group’s convenience could weigh on an agency’s workload. The Liquor Commission points out that space would have to be made for the new products, and extra help would be needed to maintain the new stock.

Would it be worth it? The bill’s impact on the state budget cannot yet be determined, according to the Liquor Commission.

Hawkins, who’s been a smoker since the 8^th grade, said that he’s not heard from the anti-smoking crowd … yet. He may be hearing from Ed Miller of the American Lung Association. “We need to have fewer places where cigarettes are available, not more,” Miller said about the bill.

The Association’s annual report, released last Tuesday, gave New Hampshire a grade of “C” for its tobacco control policies.

The law would take effect 60 days after its passage.

“There’s been a definite trend whereby the scales of justice have tipped against the individual” in consumer-insurance legislation in recent years, says Rep. David Nixon.  Four of his bills relating to car insurance are up for hearing next week. “These bills are an attempt … to balance the playing field a little bit.”

However, the insurance industry had their own reasons to lobby for some of the rules that Nixon is now hoping to change. The industry argues that its rates are set according to current law, so changing the rules would force them to charge more. 

HB 200 “permitting the stacking of medical payments coverage under motor vehicle liability policies purchased by members of the same household.” David Nixon (D-Manchester)
Wednesday, Jan. 21, House Commerce & Consumer Affairs Committee

Current law does not permit many cases of “stacking” insurance coverage. Take for example a family of four insured drivers. If one driver were in an accident, that person’s policy may cover a certain dollar amount for medical payments—let’s say $10,000.

Until the late 1980s, according to Nixon, the family would have been able to “stack” each person’s medical payments for the sake of the one person injured for a combined $40,000. Such stacking is no longer allowed, but HB 200 would reinstate it.

If passed, the law would take effect Jan. 1, 2010.

HB 202 “relative to provisions in insurance policies limiting payment of full benefits.” David Nixon (D-Manchester)
Wednesday, Jan. 21, House Commerce & Consumer Affairs Committee

Automobile insurance includes medical payments in case of physical injury. Health insurance policies, of course, pay for medical care. But, when a person who pays for both car and health insurance is in a car accident, that person can only redeem coverage from one of those policies. To redeem both, the insurance industry says, would be “double recovery.”

Whether car insurance or health insurance pays the medical bills is something the companies work out on their own. However, coming to an agreement is not quick, Nixon says, and in the meantime the victim’s charge is left unpaid. Under HB 202, insurance companies would not be allowed to sell policies that only let the customer recover one of the two claims.

If passed, the law would take effect Jan. 1, 2010.

HB 101 “prohibiting the use of credit reports for certain insurance purposes.” Karen Hutchinson (R-Londonderry)
Wednesday, Jan. 21, House Commerce and Consumer Affairs Committee

Currently, a customer’s bad credit rating may be used by insurance companies as a reason to charge higher prices for car or home insurance—as long as the bad credit isn’t the only reason for the high rates. This bill would make it illegal for the companies to charge more based on credit scores—period.

If passed, the act would take effect Jan. 1, 2010.

HB 75 “prohibiting the use of information concerning education level to underwrite insurance coverage.” William A Hatch (D-Gorham)
Wednesday, Jan. 21, House Commerce and Consumer Affairs Committee

State law already spells out a number of unfair insurance practices. HB 75 would add to the list requesting information about education level and using it to set prices.

Got you thinking?  Share your comments or questions below to get a conversation started.

And remember, our online learning center and a complete list of proposed laws for 2009 is available here at Front Door Politics: from the State House to your house.

© 2009 Niles Media “Front Door Politics” all rights reserved