$500 million problem

Steve Norton, our counterpart at the left-leaning New Hampshire Center for Public Policy Studies, briefed House and Senate budget writers yesterday on the enormity of the pending deficit facing New Hampshire:

Norton estimated the state could face a $500 million revenue shortfall over the life of the next two-year budget that begins July 1.

Norton said the federal government helped states in 2001 by temporarily increasing the federal share of the Medicaid program. He said a similar boost is under discussion and could mean as much as $75 million a year in additional federal aid.

Governor John Lynch delivers his Inaugural Address later this morning. We'll see if it contains specific requests for spending cuts or tax and fee increases.