House Rules Committee Democrats blocked action on a bill to prevent tax hikes on New Hampshire businesses.

In a 6-4 party-line vote, the committee shot down a Republican effort to eliminate triggers currently in place that will increase the state Business Enterprise Tax (BET) and Business Profit Tax (BPT) because of all-but-certain budget shortfalls due to the coronavirus lockdown.

Democrats insisted on the triggers as part of a budgetary compromise with Republican Gov. Chris Sununu last fall.

After Sununu vetoed a Democrat-passed budget that raised business taxes, he agreed to tie business taxes to state revenues. Under the agreement, a 6 percent revenue shortfall relative to projections would trigger a 12.5 percent increase in the BET and a 2.5 percent increase in the BPT beginning January 1, 2021.

When the compromise was made, few believed a revenue shortfall of that size was likely. One GOP legislator told NHJournal, “The economy would have to s*** the bed for that to happen.”

Now, the COVID-19 pandemic and corresponding economic lockdown have all but ensured the tax hikes will be triggered.

Americans for Prosperity-New Hampshire State Director Greg Moore did not mince words about what these tax hikes mean for the state’s economy.

“It’s tragic that the House Rules Committee did not take the opportunity to protect employers, particularly small businesses, from a counterproductive tax increase that creates even more obstacles to get our state back to work,” he said in a statement Wednesday.

“The Speaker and Majority Leader said that they believe this is not urgent, and can wait until 2021. My message is that we cannot wait. Our businesses cannot wait, “ said House GOP Leader Rep. Dick Hinch (R-Merrimack). “The rate is scheduled to change on January 1, well before legislation could be fast-tracked through the House and Senate.

“Businesses are making decisions now and will be through the rest of this year based on the prospect of that rate change,” Hinch said. “This affects their hiring decisions this year. This affects their ability to purchase capital equipment this year. To ask businesses to ‘wait and see’ if the legislature does something in seven months doesn’t make sense.”

House Majority Leader Doug Ley (D-Jaffrey) pushed back, calling the Republican bill a “tax break for large, out of state corporations.” By pursing the measure, “Republicans are saying they would be fine with cuts to meals on wheels, substance use recovery programs and other social programs that Granite Staters depend on,” Ley said.

Former Republican Speaker of the N.H. House Bill O’Brien says the House Democrats’ decision in the Rules Committee was politically motivated.

“My sense is that the Democrat-dominated committee killed [the bill] because they don’t want members to have to take a vote on it and remind the people of N.H. that increasing taxes is more important to them than a strong economy,” he told NHJournal Wednesday.

At a news conference Wednesday afternoon, Sununu expressed “amazement” at Democrats’ refusal to even consider the Republican measure.

“The worst time to kick someone when they’re down, when they’re business is struggling — the worst thing you can do is raise their taxes. It shows a completely callous or ignorant attitude toward what drives a strong economy.

“The fact that the Democrats in the legislature don’t even want to talk about it is amazing to me. It’s a terrible approach and just another sign that Democrats didn’t want to work across the aisle,” Sununu said.