The snowmakers are on full blast, and resorts are in an arms race to kickstart opening weekend. But as New Hampshire’s ski season gets underway, two words are dominating some Republicans’ minds in Concord.
A proposed bill by Democrats would extend the state’s existing meals and rooms tax to lift tickets at ski areas, adding a 9% tariff to anyone buying one-day, two-day or three-day tickets in the state.
The idea? Generate enough revenue to fill a college scholarship fund for the middle class – as well as vocational courses for inmates.
Backers of the effort say it’s an artful way to bring money to an important cause. But in a state whose ski industry is by some measures growing, it has hit a nerve with the Republican governor.
“If, God forbid, this bill were to reach my desk, I would veto it immediately, and I have no doubt it would be sustained,” said Sununu, who once ran a ski resort himself. The bill amounts to an imposition, Sununu said in an interview – “another example of extremism of this Legislature, trying to tax anything and everything they can get their hands on.”
Supporters of the bill argue that’s an oversimplification.
Rep. Craig Thompson, the bill’s sponsor, says the bill was prompted by a long-standing desire from constituents to reduce tuition costs. It’s a vexing problem for a certain population, Thompson says: People with not enough money to pay for college themselves but who make over the limit to qualify for significant financial assistance.
“We have to ask ourselves what can we do about it,” the Harrisville Democrat said. “One thing is to create a middle-class scholarship.”
New Hampshire already has a governor’s scholarship program, currently funded with $6 million over the next two years after September’s compromise budget. But Thompson says that amid high numbers of New Hampshire students leaving the state, that fund should be expanded and targeted.
According to draft language, Thompson’s bill would tax all ski lift tickets fromone to three days at 9%, but would exempt ski lift season passes. Much of that money would go to the governor’s scholarship fund, which would be expanded to include a separate fund for “a range of working families as determined by the office.”
The scholarships would specifically cover families who pay between $6,000 and $20,000 a year for tuition. Thompson says that’s by design.
“The bottom of the economic bracket is pretty well covered, and the high end has the financial wherewithal, but the middle class is asked to cough up a whole heck of a lot of money,” he said.
The bill would also dedicate at least $500,000 of the revenue collected to the Department of Corrections for the “funding of college and vocational courses for inmates in the state prison system.”
“The idea is to provide people who are incarcerated with the means to improve their lives when they’re in custody,” said Rep. Lee Oxenham, a Plainfield Democrat and a co-sponsor of the bill. “This is providing funds that could make that kind of training more available.”
But if the ends are worthy, the means have quickly come under fire. House Republican Leader Dick Hinch, of Merrimack, called it “an unprecedented attempt to single out an industry.” “It will be a cold, snowy day in hell before we let Democrats pass a ski tax,” Hinch said in a statement earlier this month.
The main objection, Hinch and others say: The bill would add one more barrier to an industry that has seen lift ticket prices rise even as skier participation appears to be growing.
Rep. Jack Flanagan, a Brookline Republican, said it would just drive up costs for out of state visitors who already face meals and room taxes during their stay.
“They’re renting rooms, you know they’re buying meals anyway,” he said. “It’s just making the cost that much more expensive.”
“Like a lot of things in business, consumers have options,” Flanagan said. “So if it starts getting more and more expensive in New Hampshire, they may go to Vermont, they may go to Maine.”
New Hampshire would not be the first state to impose a tax on lift ticket; neighboring Vermont attaches its 6% sales tax to lift tickets, along with other states. Still others, like Maine, exempt lift tickets from sales taxes, categorizing them as a “service” and not a good.
But assessing the impact of a potential 9% levy on New Hampshire lift tickets is hard to gauge. Ski areas are loath to give up revenue data. A spokeswoman for Ski New Hampshire, the industry group that opposes the proposed new tax, said that the organization could not release statistics on how much the industry brings in through lift ticket revenue. A spokeswoman for Vail Resorts, which now owns four ski areas in New Hampshire, also declined to release that information, calling it proprietary and pointing to Vail’s duties as a publicly traded company.
Another aspect of the bill is also hard to measure. Due to the structure, Oxenham argued, much of the tax burden would be carried by out of state skiers.
“The lovely part is by excluding the season pass, we’re avoiding getting the avid skier who is more likely to be a New Hampshire resident and we’re much more likely to get funds from out-of-state visitors,” she said.
But Ski New Hampshire and others don’t have numbers on the breakdown of purchasing habits for in-state and out-of-state skiers to verify that assumption. And the expansion of Vail’s nationwide Epic Pass into New Hampshire could make it even more difficult to determine where skiers are coming from.
One thing that is apparent: New Hampshire’s ski industry is growing, somewhat. In June, Ski New Hampshire said that attendance had grown 5% across the board in the 2018-19 ski season, hampered somewhat by reduced snowfall overall. Thompson says that provides an opportunity for a new revenue source in lieu of a broad based sales or income tax.
Opponents say it’s an indication that the formula should not be touched.
Asked if he’d seen the proposal, Sununu gave a deadpan reply. “Oh I’ve seen it,” he said during an interview.
The governor, formerly the CEO of Waterville Valley Resort, said it didn’t matter specifically how much the surcharge would be in practice. The practice of taxing at all would deter out-of-state tourists, he said.
“Of course it will,” he said. “You’re arbitrarily raising the prices on ski tickets on an industry that already has very thin margins, and where a couple bad rainstorms can really destroy all profitability, which has a direct impact to jobs and growth potential and capital investment. In the part of the state where you need to have the most financial flexibility. Usually the North Country and the Lakes Region.”
How the debate will play out in the Legislature in January – and how much support the tax garners from other Democrats – is up in the air. But some of the bill’s co-sponsors say the 9% imposition will have a minimal effect.
“I think they should be more concerned about the impacts of climate change on our ski industry than this issue,” Oxenham said of the bill’s opponents.
Thompson was even more direct.
“As far as I can tell, the Republicans think tipping a waiter at the end of a meal is a tax,” Thompson said. “You’re talking about a group who stand and yell ‘these are taxes, and taxes are theft.’”
He paused. “If that’s going to be the policy, then this is a nonstarter. ...That’s not the rhetoric of people who are trying to solve problems.”
(Ethan DeWitt can be reached at firstname.lastname@example.org, at (603) 369-3307, or on Twitter at @edewittNH.)