Interview With John Stephen, Republican Candidate for Governor in New Hampshire

Dustin Siggins: So, I guess my first question, it’s a pretty simple one- you’ve run for Congress in the past, and this is a very pro-Republican/pro-conservative year in Congress. Why run for governor? Yes, the tide is anti-incumbent, but New Hampshire has a tendency to buck trends, and Governor Lynch has won by two huge margins in his last two election runs.

John Stephen: Well, you know, my background and experience suits me well for running for governor. You know, I ran the largest state department, Health & Human Services, and was able to run it with fiscal discipline and return $143 million over four years, and kept my budget flat each year, and when you deal with Health & Human Services spending, you’ve gotta make sure that you take care of the people in need, but yet, if you can return value to the taxpayers, and be more efficient, that’s what people expect. And then I was also at the Department of Safety as Deputy Commissioner. I was the first Homeland Security Coordinator, and I’ve done a lot, you know, and I was Assistant Attorney General, prosecutor, Assistant Attorney General- appointed by Governor Gregg, and then appointed by Shaheen, who’s a senator, a U.S. Senator- she was governor at the time- a Democrat governor. Then I was appointed by Republican governor Craig Benson, and I’ve had governors on each side come to me and appoint me to positions.

In the last two years- roughly two years- I’ve been working as a health care consultant for a firm in Boston called The Lucas Group, and I have private companies I consult with, to help them grow, and to help them achieve success in terms of the bottom line, and I do a lot of consulting with venture capitalists, and things like that. It’s been a tough economy, as you know, but yet we’ve been working hard with private business. But then I also had the opportunity as head of our government team at The Lucas Group to work with three governors over the last couple years and help them save, in one case, in two cases, over a billion dollars, putting them on a road to savings of a billion dollars or more. And just by coming up with ideas that I know well in terms of efficiency. I started out in my mom and dad’s restaurant business, washing dishes, mopping floors, so I started out with a small business perspective- watching budgets, making sure we controlled spending. So I took that conservative- that fiscal conservative- thought process and values, the values I share, all the way to the government positions that I’ve held. And running for governor, is like, you gotta make sure you run it like a business. I helped other governors do that, but problems in Washington have come to New Hampshire. High taxes and spending, here in New Hampshire, are choking jobs, they’re hurting small businesses. We had this governor, in the last four years, has passes 84 new taxes- 84, in small New Hampshire? A 24% increase in spending? At the same time, I was working with other governors- one a Democrat in Illinois, with his Taxpayer Action Committee, and also Governor of South Carolina, helping re-engineer his state government. Employment commission and also helping the governor of Rhode Island get a health care waiver that saved millions of dollars for his state.

I had my hands in savings opportunities and seeing these governors in other states cut spending, seeing what’s coming ahead, knowing that you can’t tax your way out of a recession. At that point, a number of folks from the New Hampshire State Republican Committee contacted me, and I have two young daughters here, and I live here, I love this state, I was born in this state. This is not the same New Hampshire I was born and raised in. And I was contacted by folks from all over the state to take that experience that I’ve garnered, or gained, over the years, and bringing value to taxpayers, to come back to New Hampshire and do the same thing again, ‘cause now’s the time. We need to stop the spending, stop the out-of-control spending in New Hampshire, stop the excessive taxation that’s hurting our culture and our New Hampshire way of life, and you know- coming from Littleton, Dustin- New Hampshire’s a low-tax, limited-government state. Live Free or Die. We were the first state to declare its independence from Great Britain, the first colony, and we always pride ourselves on being first in the nation, well- I’m running so we can get back to the first in the nation, and showing the entire United States what it’s like being from New Hampshire. Independent, cutting spending, and also returning value to taxpayers.

DS: Which is great. My only question is, that’s what the guy ran on in 2006. I forget the guy’s name off the top of my head- he ran on a similar platform. I interviewed him for my campus paper [DS: Correction. I organized an event on my campus for the candidate, one Jim Coburn, and a campus news reporter interviewed the candidate. I apologize for my bad memory.] He got shellacked. Governor Lynch won a record re-election in the state. It was something like 74, or 76, percent. [DS: 74%-26% was the margin between Lynch and Coburn- I guess my memory improved.] And obviously now, it’s 2010, it’s a different year, different political culture. How do you plan on taking this and saying to New Hampshire, “Hey, the guy you voted for three times in a row isn’t the right guy?” And a lot of people, you know, 84 taxes, it’s hard for people to grab onto what that means-

JS: Well, first of all, when Governor Lynch ran against those other two candidates, we didn’t have the environment. Like you said, 84 new taxes and fees. We didn’t have an environment of a 24% increase in spending in four years. We didn’t have an environment where our limited liability companies in New Hampshire- which are the bedrock of New Hampshire’s small businesses- received an income tax passed by Governor Lynch during the deepest recession of our time. I mean, times have changed. And another thing is, Governor Lynch is running for an unprecedented fourth term. That’s unheard of in New Hampshire history. He’s had his chance, and we can’t afford two more years- and the people are responding. In the latest Rasmussen poll, the poll showed that 47% are supporting him on re-election. And that number is going down. He’s had 70% approval a little more than six months ago, so we’re starting to get our message out, and today- or as of the latest poll- he’s at 51% approval, which tells you, Dustin, his support is diminishing. What you had said was absolutely correct- those candidates, during those times, the message didn’t work, the fact is that people weren’t paying as much attention to what was going on in Concord, the liberal spendthrift agenda was starting to percolate, but it hadn’t come to the point where it actually was hitting their wallets and their pocketbooks.

Today, ask any person in New Hampshire that has legally registered a car how much they had to pay. Ask the guy from Rochester that has to go to work in Boston every day, how his toll prices have gone from five hundred dollars to $1,500 in four years. Ask Andy Crews, who owns AutoFair in Manchester- car dealership- who, he had some extra money a year ago to buy another dealership a year ago, and his accountant told him because of the LLC tax, not to buy the dealership. He would have been able to grow jobs- create jobs- and ask the 50,000 people in New Hampshire that are out of work today if they like what Governor Lynch has done the past few years. You know, it’s all about government being fiscally responsible and creating an environment- because government doesn’t create jobs- creating an environment so that small businesses can flourish and create jobs. And that’s what our campaign’s gonna be about- low taxes, limited government, creating an environment to grow jobs by having tax cuts on employers- and those are the things that Governor Lynch does not support. Those are ideas that Governor Lynch does not support. He has shown his penchant for big government, and so there is going to be a very stark contrast in New Hampshire now- believe it or not- and I don’t like to say this, but it’s true, according to the Tax Foundation, has the highest business tax rate in the country. Now when we start telling people en masse about this issue in New Hampshire, I believe strongly this is the last term of Governor Lynch.

DS: When I left New Hampshire, the spending was just starting to increase- I left in 2008. And I talked to Corey Lewandowski from Americans for Prosperity-

JS: Yes, Corey’s a good guy.

DS: And he explained to me how the LLC tax is only going to go on for a year, I believe- that it was only going to go on for a year, and it was going to be dropped because of opposition from New Hampshire citizens.

JS: Correct.

DS: So that’s at least a good thing, that that tax is going away. What would you say- and just briefly, I only have a couple more minutes with you- briefly, what’s the one tax that you would eliminate, and also, what’s a program you would cut to offset the revenue lost from cutting that tax? What’s a program you would cut or streamline?

JS: Well, first of all, I’m gonna be putting out a plan on Monday with a number of ideas, but I would definitely work to restructure and modernize state government. And one big area I would move forward on is managed care for Medicaid. And Anthem did a report a few months back that indicated we could save $300 million in New Hampshire a year- now, Dustin a year!- if we were able to have what 40 states have in this country- a Medicare managed-care product; which means, mainly, that the 150,000 (roughly) lives that in New Hampshire are on Medicaid- the people, that are on Medicaid- that they have to go through a gatekeeper, like we do for health insurance, like everyone else. Right now there is no gatekeeper. They go to emergency rooms if their child has a cold, or, you know, there’s no program like that. So that alone is one area. Then there are other areas where can consolidate functions- backroom functions- every department has HR, every department has business office, every office has attorneys- we are going to look at doing a lot of things that the private sector is doing in terms of efficiency. And I would work to eliminate the Business Enterprise Tax, which is hurting a lot of small businesses. And I would eliminate it for those businesses that pay taxes after their year-end shows a loss. Even if they lose money, they pay taxes in New Hampshire, which is just unconscionable, as far as I’m concerned.

Many of the other taxes that passed, most of them need to be looked at. And one that- I mean, there are many that I would roll back and repeal. But I would want to have a tax holiday for rooms and meals. We increased the rooms and meals tax by 12% under Governor Lynch just last year. I’d want to go back to no rooms and meals tax, zero, no tax, during certain periods of the year when we want to increase tourism during the slow periods. And I would be the first governor in this state to basically stand up and say, “No rooms and meals tax.” We’re going to look at restricting the tax code on businesses as well.

DS: And would that lead to an imbalance in the budget? I mean, I believe New Hampshire’s Constitution says it has to be a balanced budget, and so if you obviously cut taxes without cutting appropriate spending- you mentioned $300 million a couple of minutes ago- cutting all of these taxes, would you still have a balanced budget?

JS: Absolutely. Absolutely. Not only will- these tax cuts will stimulate job growth, they’ll help employers make more profit to give to their communities, employees, and the state, for the business profits tax. And what it will also do is start to create an environment where, overall, we’ll have more and more job growth through creation of new lines of business. People will start coming into this state. I think that’s important. But we’ll no longer have the highest business tax rate in the nation. We’re going to turn it around and have one of the lowest in the Northeast. That alone will stimulate job growth. And what will happen is people who are working outside the state will start thinking about coming back here, and more people will be working in New Hampshire, and that leads to more revenue. But also, you’ve got to control spending. Yes, the spending can be controlled. You absolutely can make reductions, even across the board. We’ll keep spending in check, balance the budget, and begin to restore the Rainy Day Fund. And when New Hampshire companies are going to Massachusetts- which I heard, throughout this campaign trail- they’re going to Massachusetts to do business rather than in New Hampshire, that’s a problem. And once you fix that problem, and you create jobs, New Hampshire will, once again, be the envy of the nation.

DS: Well, I guess I have one last question for you, and it’s not economics-related at all. The conflicts and the wars in Afghanistan and Iraq- as the governor, you’re in charge of the troops from New Hampshire, correct?

JS: That is correct.

DS: Do you support being in Iraq and Afghanistan, until at least the July 2007 deadline [DS: Clearly, I meant the 2011 deadline…I have no idea why I said “2007.”] and beyond that, if necessary? Do you believe that’s a worthy cause for New Hampshire citizens to be fighting over and dying for?

JS: As the Commander-in-Chief for the state, I’m gonna support the decisions made in Congress.

DS: Even despite the federalism that is allowed to you?

JS: I mean, first of all, I’m a big supporter of the 10^th Amendment, and I believe strongly that we also need to have a strong national defense. And, you know, I’m going to work alongside and with the federal government to make that we follow the lead of the United States federal government in terms of national forces.

DS: Okay. Thank you very much

New Hampshire Businesses Are In Trouble

Being a former New Hampshireite, I try to follow state news fairly regularly. This past Tuesday, I was fortunate enough to see a column by former State Commissioner of Health and Human Services John Stephen of Manchester, a health care and government solutions consultant, regarding the state budget, which the majority Democrats have grown outrageously in the last few years, and apparently plan to do again next year.

Unfortunately, being Democrats, Governor Lynch and his friends in the state house aren’t going to seriously cut budgets, though to Lynch’s credit he did stand up to the state employees union, which rejected a compromise with the governor to save jobs. Instead, they want to, and have passed, a five percent tax on LLCs in the state, according to Stephen.

This is really bad- there are over 10,000 businesses that fall under this category, including my father’s general contracting business (soon to be my brother’s). When former Governor Benson held strong on a budget veto, he also created a state budget surplus. Lynch, meanwhile, proposed to raise taxes his first year in office. That has not stopped, and continues with this bill, HB 2.

Fortunately, the people can still voice their opinion. Thanks to the New Hampshire chapter of the Americans for Prosperity, this information was sent to me: “Mark your calendar for December 16, 2009 and promise yourself that you and others will take the time to testify at the only public hearing for the 5% Tax on LLC?s and Partnerships which the Department of Revenue Administration (DRA) plans to hold at 10:00am at their Concord office on 109 Pleasant Street.”

The New Hampshire Advantage is at risk, and so are thousands of small businesses. I say small businesses because Wal-Mart and other big businesses will not be hit by this tax, as they are not LLCs. Thus, the party of the little guy is showing its true colors as the party of Big Business- note, not free markets- and is willing to crush the backbone of New Hampshire’s economy to brown nose to Big Business. Realtors, restaurants, and many other industries are going to be hit hard by this. Of course, given how the Democratic-controlled New Hampshire government passed a minimum wage raise in 2007, something Big Business loves, and passed a law essentially banning payday lenders in the state, this is no surprise.

New Hampshire citizens, this is on your shoulders. Make your voices heard. Good luck.