Steve Norton- Executive Director, NH Center for Public Policy Studies
Norton says the primary dynamic in New Hampshire's budgets is that we've spent more money than we've raised. He shows that General Fund spending under HB 1 has increased by an average of 9.2% each biennium since 1990. That represents the amount the Legislature intended to spend, rather than the amount actually spent.
He says the General Fund budget is not always the best indicator of what's actually being spent. He says looking at Total Funds is a better barometer. That has increased by 14% per biennium since 1990.
Norton says revenues have declined considerably while spending has increased. He says the budget hole in the next biennium will likely require hard choices.
Norton says that New Hampshire government is just above the national average in state employees per capita, but fourth lowest in per capita state spending. He breaks down state spending by function, with most going to education and health and human services, followed by Justice, General Government, and Transportation.
He says is the Legislature wants to get a handle on rising costs, it has to address education, health care, and the pension system. He says there are real ways to reduce spending, such as eliminating programs, and not so real ways, such as reducing appropriations in areas where the spending is mandated by law, such as HHS caseloads.
Norton outlines some of the drivers of state spending. He says New Hampshire prisons spend slightly more than the national average per prisoner, but the state corrections system spends less than the New England average. He says the state is reaching a decision point on whether to build a new prison.
On Medicaid, Norton says New Hampshire's expenditures have risen more slowly than the rest of the country. He says New Hampshire is slightly less generous in granting Medicaid eligibility, and reimburses providers at the national average. He says the real cost driver is that New Hampshire spends much more per beneficiary than the national average.
He says the NH Retirement System has been hit hard by stock market losses, and has funded just 67.8% of the system.
On education, he says New Hampshire spends slightly more than average per pupil, but that the Claremont Lawsuit has caused New Hampshire's state education spending to grow at the fastest rate in the nation.
He says the way to control spending is to follow Executive Orders put in place to cut down on last year's budget, claiming that the state saved $200 million from what it had planned to spend.
Norton says there are ways to address Medicaid, Retirement, Corrections, and Education, and those are the major cost drivers in the New Hampshire budget. He says the state does not measure how much it spends on a monthly basis, and that you can't manage what you can't measure.
He says lawmakers should ask what is the price of government, what outcomes they want to achieve, and how well they are delivering them.