Charlie Arlinghaus- President, Josiah Bartlett Center for Public Policy
Arlinghaus looks at the spending pressures within the New Hampshire budget. He breaks down the state budget in federal funds, tax revenues including the General Fund and Education Trust Fund, and dedicated funds such as Highway, Turnpike, and Fish and Game Funds.
He says inflation over the past twenty years has been 74%, General Fund spending has gone up 154%, and adding the Education Trust Fund means spending has gone up 311%.
He says the current budget problem has resulted from revenues coming in short of expectations, a shift of ARRA funds from 2010 to 2009, and the probable loss of $110 million from the JUA Lawsuit. He says the likely problem will be $208 million.
But Arlinghaus argues the budget hole in the next biennium starts out at $627 million, once the state stops getting stimulus money and restores one-time spending reductions. He says that assumes the Legislature addresses the current budget hole of $208 million.
He quotes Governor Lynch's argument that the state could grow its way out of its budget problems with 4% annual growth. But Arlinghaus says that rate of growth would only produce an additional $92 million per year. He says if taxes and spending both grow at the same rate, the problem gets worse.
He says there are two strategies for cutting spending; Hunt and Peck or Directed Management. He says the Legislature should find small ways to save money like cutting the Film Commission, But he says the large savings comes when the Legislature directs Commissioners to find better ways to provide services at lower costs. Arlinghaus recounts the experience of Governor Walter Peterson, who asked his department heads to come up with savings. He says the Commissioners who came back with realistic program cuts were on his side, and those who proposed cutting the most popular programs are not being helpful.
Arlinghaus argues that the way to control spending is to put pressure on state agencies to spend less, build coalitions for lower spending, and take every dollar in savings every time we can, no matter how small. He says victory is at the margins. Since the economy and budgets are like a roller coaster, the Legislature has to be strict in supporting its Rainy Day Fund and pass a better Balanced Budget Bill. He says transparency is a great way to get the public on the side of smaller government, and says the Josiah Bartlett Center will be working to put the state's budget, spending, and revenue information online for the public to see.