How will tax reform affect local businesses?

  • The Monadnock Paper Mills have been in business for nearly 200 years, and executives say that they hope new tax reform will continue to propel them forward for years to come.  —Courtesy photo

  • A view of the Monadnock Paper Mills. —Courtesy photo

  • Monadnock Paper Mills has been experiencing a boost from the improved market, which executives project will continue under the new tax reform. (Ashley Saari / Monadnock Ledger-Transcript) Staff photo by Ashley Saari—Monadnock Ledger-Transcript

  • —Courtesy photo

  • Machinery repair and installment is a major expense of manufacturing, including at Monadnock Paper Mills in Bennington, which may benefit from changing tax laws under Trump’s Tax Reform and Jobs Act. —Courtesy photo

  • Machinery repair and installment is a major expense of manufacturing, including at Monadnock Paper Mills in Bennington, which may benefit from changing tax laws under Trump’s Tax Reform and Jobs Act. Courtesy photo

Monadnock Ledger-Transcript
Monday, January 22, 2018 5:38PM

One of the main aims for President Donald Trump’s corporate tax reform is to stimulate business, particularly with the aim to create jobs. For Monadnock Paper Mills, the company is already seeing benefits of a strengthened economy, something they hope that the tax reform will only bolster.

The past year for Monadnock Paper Mills has been one of growth – a trend officials only see as continuing with upcoming tax reform.

“We have seen a general uptick in business in the last six to twelve months,” said Bill Peterson, vice president of human resource at Monadnock Paper Mill in Bennington. “So much so that we’ve added approximately 12 people.”

Monadnock Paper Mills employs about 100 unit employees, plus an additional 60-70 salaried employees. The mill is also associated with a mill in Pennsylvania that produces acoustical insulation which employs another 85-90 people. The Paper Mill is an S-Corporation, and the  Pennsylvania mill is a Limited Liability Corporation. 

Those jobs were added throughout the company, said Peterson – the majority in production, but also some in product development and sales.

Peterson and Andrew Manns, the mill’s chief financial officer attribute the growth to a general improvement in the economy, as the growth has been mainly in domestic sales within North America, though the mill sells specialty paper both locally and abroad.

One benefit that could be a growth booster for manufacturers such as Monadnock Paper Mills is a provision in the tax code that allows businesses to write off capital investments in the same year they make them, as opposed to over several years as it is now.

“Obviously, as a manufacturer, we’re capital intensive,” said Manns. “We spend many millions of dollars on new equipment and maintaining the equipment that we have.”

But while capital expenditures are a regular part of the manufacturing industry, Monadnock Paper Mills does not have any plans to increase capital expenditures beyond what was already planned, or add additional capacity, which was a hopeful aim of the changes.

With no planned new capacity, and the recent hires filling the production gap to meet the more robust market, Peterson said that Monadnock Paper Mills has created all the positions it needs to meet the current demand. If that changes, he said, the company will re-assess.

“Right now, we’ve staffed to what we see in the pipeline,” said Manns. “If that pipeline increases, we’ll have to address that, but for the moment, we’re staffed to produce what we believe our customers want us to make this year.”

For some of America’s largest corporations, such as Walmart, which has a location in Rindge, workers will start to see the benefits of the savings from tax reform, even before the company begins to reap them when the reform goes into effect in 2019.

In an announcement this month, company CEO and President Doug McMillon has promised that effective next month, all United-States based Walmarts and its associated brands will be raising their starting hourly wage by $1, from $10 to $11 per hour, and providing one-time bonuses ranging from $200 to $1,000 for employees, based upon their length of employment with the store.

The company will also be making benefits changes to expand its paid leave police to include 10 weeks of paid maternity leave and six weeks of paid parental leave, and includes adoptive parents into that benefit.

McMillon specifically credited the tax reform allowing the company to accelerate Walmart’s investment plan.

Small Business

The president of a Peterborough based full-service biomass contract company said on the surface recent slashes to federal taxes look like a boon to his business.

“We’re probably going to pay a little less and that will be beneficial,” Mark Froling said in an interview with the Ledger-Transcript on Friday. “We will have a little less tax burden and we might be able to put a little more away in investments.”

Dig a little deeper though and there’s more to it than that, Froling said.

His company sells boilers that use wood chips and wood pellets, which are deemed renewable energies. He said the current administration has put an emphasis on the fossil fuel industry while simultaneously reducing awareness about renewables.

That has dried up state money that was once available for renewable projects that Froling tapped into in the past.

“It’s obviously nice to have less of a tax burden,” Froling said. “But these taxes also fund programs.”

By the time all is said and done, he said it’ll likely be a wash.

“We’ll probably be net neutral all in all,” he said.

Froling said he also recently spent a week in Europe because his company uses the country’s technologies. Froling said trade agreements between the two countries are “a little tenuous at the moment.”

“The people I talked to really felt like there is not enough stability to pursue these partnerships,” Froling said of the current U.S. administration’s isolationist behavior.

“It seems like we’re not aligned at the moment,” Froling said of his business and the federal government.