A new study on New Hampshire�s budget warns that state spending is outstripping state revenues, and the state�s budget reserves are nearly wiped out. The study comes from the non-partisan New Hampshire Center for Public Policy. New Hampshire Public Radio�s Doug McPherson reports.
The last time state revenues exceeded state expenses was in 1999. At the end of that fiscal year, the state held more than 188-million dollars in reserve accounts. Those include the state�s rainy day fund, its health care fund, and its education trust fund. Doug hall, the author of the report by the New Hampshire Center for Public Policy, says over the last four fiscal years, the state has balanced its books by using up all but 17-million dollars of its reserve.
TAPE Doug Hall: �you know, in essence, plan b was, we have a surplus in these accounts � we can always use the health fund, we can always use the rainy day fund. Now we don�t have that.� : 08
Now, nine months into its new two year budget, the state is in what hall calls a �precarious position.� In order to balance the current budget, lawmakers relied on �savings� that have yet to be realized, and on projected �revenues� that may or may not come in.
TAPE Doug Hall: �if the spending is 20 or 30 million dollars more than anticipated, then you add that amount in the shortfall in the revenue, and you get maybe a 40 or 50 million dollar deficit situation. Clearly if we only have 17 million of reserve funds left, a deficit of like that in the first year is huge. You�re left then with 30 million and you�re left then with that problem going forward into the second year of the budget.� :27
All of which means � there�s a good chance lawmakers will have to revisit the current budget sometime soon. If some taxpayers are surprised by the extent of the state�s budget woes � most lawmakers are not.
TAPE Sen. Green: �my reaction basically is, tell me something I don�t know.� :03
That�s Senate Finance Committee Chairman Richard Green, republican from Rochester. Green blames republican Governor Craig Benson�s refusal to look at some kind of increase in taxes or fees.
TAPE Sen. Green: �if i have a real problem with the governor, that�s where it is. You can�t keep looking just at the appropriation side. Now, if we got lucky and the economy turned around faster than most of us anticipate, and our revenues came higher, than i wouldn�t be interested in looking at revenues any further. As long as we can balance the budget. But right now this budget is not balanced.� :21
And Green says he sees no prospect that it will be.
On the House side, Finance Committee Chairman Neil Kurk, republican of Weare, sounds an almost identical note. Balancing the budget is always hard, Kurk says, and it should be hard -- to insure the people�s money is well spent. But without any reserves, it just got a whole lot harder.
TAPE Kurk: �without having a second source of money, so to speak, to balance the family budget, we need to look more carefully at what we�re spending, and obviously, look more carefully at raising revenue.�
Like Green, Kurk doubts the current budget can survive without increased revenues. Kurk says even greater challenges lie ahead next year, when the state tries to craft its next budget.
TAPE Kurk: �the governor is going to propose a budget for oh-6 and oh-7 that meets his criteria. If those criteria are no new taxes, than he will have some very significant expenditures to reduce.�
For his part, Governor Craig Benson says tax or fee increases are out of the question -- and cuts in spending aren�t necessary.
TAPE Benson: �I don�t think there needs to be cuts. What we need to do is find smarter ways to do things. And there�s plenty of smarter ways to do things.
For example, Governor Benson is seeking federal government permission to let the state save money by buying its prescription drugs from Canada.
TAPE Benson: �another example is, I�ve gone off and asked for a look at outsourcing some of our incarceration of prisoners. Is it smarter for us to house every single inmate we have, or is it smarter to put some in a separate system as Vermont does, and keep some ourselves? Those are some of the questions we have to ask, and we shouldn�t be afraid to ask questions. The worst that happens is that we do nothing different than what we do now, the best is maybe we find a better way of doing it.
Meanwhile, the Center for Public Policy is working on a new study � this one focusing on the current state budget � and its next one. For NHPR news, I�m Doug McPherson.
