January 22, 2009
To the Editor;
In a recent letter I listed some of the many new and increased taxes and fees bills that are being presented to the NH Legislature. As a result a number of readers have inquired as to the fiscal state of New Hampshire, so I’ll offer this brief summery.
Revenues have fallen substantially in the past 15 months. Had we not increased the budget by 17.5% for the fiscal years 08 and 09 (ending June 30, 2009) we would have experienced a rather slight short-fall, but that is not the case. The deficit for this two year budget is estimated to be $245,000,000. Executive order cuts, increased taxes, bonding building aid, and a reduction bill, to be taken up by the House on January 28, 2009, will bring the deficit down to $65,000,000. This is an optimistic estimate. We have a Rainy Day fund of $89,000,000 that can be utilized; however a reduction in this fund will reduce the state bond rating. This will increase the cost of borrowing for the state, counties, cities and towns. As such it would be prudent to keep this substantial rainy day fund in tact. If so, the Governor and legislature must decide where we obtain an additional $65,000,000 in savings when there are only 5 months remaining in the biannual budget. We have already bonded roads and school construction aid rather than utilize our traditional practice of using general state revenues to pay for these projects. We simply can’t put more on the credit card.
Then there is the next two year budget that will start on July 1, 2009. If we simply repeat the current adjusted budget (July 1, 2008 to June 30, 2009), without considering any increases such as entitlements, and no revenue growth, the projected deficit will be $521,000,000 for the 2010 – 2011 fiscal term. So in order to submit a balanced budget to the NH House as required by law, substantial additional cuts will be needed.
The good news is that our state still ranks high among all other states. We are number one in the categories of a favorable tax climate, healthiest state, and standard of living. We are number two in the categories of lowest crime rate and child and family well-being.
If only we could return to our traditional fiscal prudence.
Robert H. Rowe,
Representative for Milford and Amherst