After a fall in state revenue during the first part of the year, everyone in Concord was nervous about the state's budget running out of money. Then the MET court ruling seemed likely to undermine finances even more by striking down a crucial revenue source.
The picture looks much brighter now. June's revenue report was on target, and the MET lawsuit has been settled after hurried negotiations. Governor Hassan commented on the brighter picture, while politely pointing at the previous Republican legislature's tax changes to explain under performing revenue:
The picture looks much brighter now. June's revenue report was on target, and the MET lawsuit has been settled after hurried negotiations. Governor Hassan commented on the brighter picture, while politely pointing at the previous Republican legislature's tax changes to explain under performing revenue:
June and fiscal year revenues appear close to on-target, driven primarily by a strengthening economy that has helped the meals and room tax and the real estate transfer tax make up for the underperformance in other areas. We continue to see shortfalls in business taxes and the interest and dividend tax, which appear to be related, at least in part, to a number of changes in the state tax code in recent years, as well as to businesses beginning to apply various tax credits and carry forwards accrued during the recession.
Despite the challenges posed by the shortfalls in business taxes and the interest and dividend tax, we have worked to keep the state’s bipartisan commitment to a balanced budget. We provided stability to the state's budget by issuing a preventative, preemptive Executive Order and by passing our bipartisan legislation implementing the Medicaid Enhancement Tax agreement with 25 New Hampshire hospitals, while we also continued working across party lines to support priorities that are critical to our economy and high quality of life.
We must continue working together in a fiscally responsible manner in order to ensure that we protect the state’s budget, but the preliminary data reinforces that the bipartisan progress we have made on our shared priorities is keeping New Hampshire’s economy moving in the right direction.
The strong returns from the Business Enterprise Tax are a sign that New Hampshire businesses are creating jobs, and the Meals and Rooms Tax over performing for the month suggest the state’s summer tourism
season is off to a strong start. Both represent very good indicators for our recovering economy and they have helped to ensure revenues for Fiscal Year 2014 have come in almost exactly as estimated in the budget.
With revenues on plan, it is imperative that state agencies are meeting their spending and lapse figures to ensure the budget remains balanced and spending does not exceed the revenues we’ve collected. To that end, I am requesting that Fiscal Committee Chairman Wallner schedule a spending update from the Governor’s office for our next meeting to give us the opportunity to better evaluate the state’s financial picture heading into the second year of the biennium.
What's clear from these figures is that we don't have a revenue problem, we have a spending problem. Thanks to the realistic estimates put in place by Republicans, revenues are in line with the Senate's budget. The real problem is that the Hassan Administration can't control spending.
Maggie Hassan's budget team has already admitted that agencies will go over their Fiscal Year 2014 targets, but has not told the people of New Hampshire by how much. Chuck Morse is therefore right to request Fiscal Committee Chairman Wallner schedule a spending update from the Governor’s office.
Maggie Hassan has a responsibility to the people of New Hampshire to reveal her Administration's spending figures and explain what her plan is to fix the deficit she has created.
If Maggie Hassan is serious about addressing our fiscal problems, she should be transparent about state spending. She should immediately release figures on how much every department has spent above its budget.