Tax, fee revenues $26m short

Kevin Landrigan reports in the Nashua Telegraph that state revenues at the end of September are short of the budget plan, but not as bad as they could have been.

Administrative Services Commissioner Linda Hodgdon said she took some solace September was a big revenue month, and the state’s revenue shortfall of $8.5 million was smaller than the one in July and August combined.

“We knew going into this we were going to see some negatives at the beginning of the year, and hopefully, we will see more positive going into the next calendar year,” Hodgdon said.

Senate Republican Leader Peter Bragdon, of Milford, said the shortfall will be a challenge for lawmakers but is smaller than had been feared to this point.

“We still take issue with the last minute decision when they put this budget together to raise revenue estimates by $75 million. I think we need to get later into the year to know for sure whether these estimates will hold up or not,” Bragdon said.

In the Concord Monitor, Shira Schoenberg says the state budget is showing some encouraging signs.

Colin Manning, spokesman for Gov. John Lynch, attributed the fall-off from predictions to the economy. "Revenue numbers from September show the economy continues to struggle, which is why we have to continue to watch revenues and spending very closely," Manning said.

But overall, the numbers were positive for the state.

Last month, Republicans raised alarms when revenue predictions fell $17 million short in a month that was expected to bring in just $111 million. But this month, even Senate Republican Leader Peter Bragdon was satisfied.

"Next month, October is supposed to be another high month and if that kind of performance can repeat, things will look on a better footing," Bragdon said. "It's certainly a very positive sign."

The 97% Solution

In the Nashua Telegraph, Kevin Landrigan reports that Republican lawmakers are asking Governor John Lynch to share the budget proposals he required department heads to submit last winter, which called for spending just 97% of last year's total.

Senate Republican Leader Peter Bragdon, of Milford, and House Republican Leader Sherman Packard, of Londonderry, asked Lynch to release state agency head work papers from last fall that assumed a 3 percent cut in state spending over the next two years.

"We need to come back; we need to make the cuts which we are asking for,'' Packard told reporters.

"We are asking for the governor to step up, call us back into special session so we can make the cuts necessary to make.''

The budgets that Commissioners craft in the winter are given to the Governor to help him prepare his budget address, but have not been made public. The Josiah Bartlett Center has requested access to these 97% budgets for months, to no avail. We're pleased that Governor Lynch is now willing to share with the public the same information he had when putting together his budget proposal to the Legislature.

Fiscal Committee examines Lynch waivers

(CONCORD) The Legislative Fiscal Committee yesterday got its first look at the 352 waivers that Governor John Lynch made to his own Executive Orders instituting a hiring freeze, a ban on out of state travel, and limits of equipment purchases.

Administrative Services Commissioner Linda Hodgden answered the Committee's questions about the report, which shows 352 exceptions to the Governor's budget controls in Fiscal Year 2009, totaling $6.2 million in spending. Hodgden says her office estimates that Executive Order 2008-01 resulted in $13.3 million in savings since Lynch issued it in February 2008.

Under the Order, Lynch retained the power to waive any of the three spending restraints if Department heads requested an exception in writing. Hodgden says she's headed up a Waiver Committee at the Department of Administrative Services which carefully reviews each request before singing off. She credits her fellow Commissioners for limiting their waiver requests to only their most pressing needs, but says not all requests were granted.

The Josiah Bartlett Center has asked to see all department requests for budget waivers. At Hodgden's suggestion, we will submit a formal request under RSA 91-A, the New Hampshire Right to Know Law. Hodgden says that her committee has worked diligently to make sure only the most urgent staffing and equipment needs receive waivers, and that she tries to delay filling vacant positions as long as possible in order to maximize savings in the budget.

Committee Chair Marjorie Smith (D-Durham) took issue with several waivers granted for expensive equipment purchases, including 17 flashlights for the Department of Corrections costing $110 each, bullet-proof vests for the Liquor Commission, and five fax machines each costing $350. Representative Neal Kurk (R-Weare) thanked Hodgden for complying with the reporting requirements of the Order, but asked why it took nearly 18 months for Fiscal to receive its first Exceptions Report.

Hodgden responded that her office reported on exception granted in FY08 last year, and has submitted three separate updates on the impact of the Governor's Executive Orders since March.

Senate Minority Leader Peter Bragdon (R-Milford) asked about one trip that caught his eye, a one-day journey to San Juan, Puerto Rico. Hodgden explained that a state worker had been dispatched to retrieve a juvenile runaway, and not on a long Caribbean vacation.

The Committee also questioned a discrepancy between two DAS reports relating to the Executive Orders. The 60-day report, issued in July, stated that Administrative Services had processed $7.1 million in savings, and was on track for the original estimate of $8 million. But the waiver report, written two weeks ago, showed $13.3 million in savings.

Hodgden explained that the two estimates were generated by separate teams within her own office using different methods. She claimed the August report, with the higher savings figure, was more accurate as it was compiled using more recent and detailed data. The report itself did not describe how DAS arrived at its estimate. The Josiah Bartlett Center has asked for more information on the Department's methodology.

While the report includes $6.2 million in waivers granted by the Governor, Hodgden told the Committee that the full cost has not yet been felt. Several positions were filled by waivers late in the year, so no paychecks have yet been issued. Those costs will show up in FY10.

Earlier in the meeting, the Fiscal Committee officially accepted over $100 million in federal funds under the American Recovery and Reinvestment Act (ARRA). The bulk of the funding is directed at the Department of Health and Human Services. These funds were anticipated in the budget adopted by the Legislature in June.

On several items, Kurk questions state officials on whether the federal money would expand benefits and services to individuals not currently receiving them. He worried that the "free" money would boost the state's budget baseline, and put "tremendous pressure on the Legislature" to replace the federal funds with state dollars once the ARRA funding expires in 2011.

WMUR covers JUA Fallout

Channel 9 interviews Governor John Lynch, Senator Peter Bragdon, and Josiah Bartlett Center President Charlie Arlinghaus about what's next for the state budget following Wednesday's ruling agianst the state in the JUA Lawsuit.

VIDEO

But Lynch said budget challenges are nothing new.

"All budgets are subject to unanticipated events," he said. "This won't be the only event that occurs over the next couple of years, and we'll talk with legislators on how to manage it."

Governor Lynch says this outcome was unanticipated. Perhaps, he should find better sources of budget coverage.

$8 million per job

John DiStaso reports in the Union Leader on New Hampshire's spending of federal stimulus funding, and calls for more transparency:

Deputy Attorney General Bud Fitch, who heads the Governor's Office of Economic Stimulus, said yesterday the state's goal is to report the key figures of private sector job creation to Gov. John Lynch and the Executive Council at their Aug. 19 meeting. The federal government will not issue its national or state-by-state reports until October or November, he said.

Fitch responded yesterday to questions raised by state Senate Republican Leader Peter Bragdon of Milford about what Bragdon viewed as a lack of transparency on job creation details at the OES. (more)

Yesterday, the Union Leader reported that so far the state has received $413 million to create 50 jobs, 34 of them full-time. That would over $8 million per job created, if you believe that government spending creates jobs, rather than destroying jobs in one area to create them elsewhere.

Peter Bragdon: The State Budget is Doing Less with More

Senate Minority Leader Peter Bragdon publishes his thoughts on the newly enacted state budget on the editorial page of the Union Leader:

Have you heard the latest spin by the tax-and-spenders who control state government these days? The Democrats say the new budget passed by the House and Senate and signed by Gov. John Lynch is "lean." They say we are doing more with less. And they say spending is reduced.

Don't believe a word of it!

At a time when 50,000 Granite Staters are out of work and paring their home budgets to fit declining incomes, government spending continues to grow at breakneck speed. Total spending in the new budget (including federal money) is up more than $1 billion -- that's billion, with a "b" -- according to the Legislature's nonpartisan Office of Legislative Budget Assistant, a 10.5 percent increase. I don't know many families that have increased their spending 10.5 percent in the last year or two, do you? (more)

New Hampshire Budget: Pro and Con

Two leading New Hampshire Senators debate the merits of the recently approved state budget, in dueling op-ed pieces.

First, Senator Maggie Hassen defends the two-year budget in the pages of the Portsmouth Herald and its sister papers:

On the day we passed the budget, demonstrators with competing messages chanted in front of the Statehouse — some demanding more cuts in spending, others urging us to restore service cuts. The scene was a perfect commentary on this year's intense and unprecedented budget dilemma. While everyone acknowledges that we are in extraordinarily difficult times, living up to the call for shared sacrifice and hard choices is very difficult.

While far from perfect, this compromise budget is balanced, tough and responsible. And, in contrast to the last 10 biennial general fund budgets, which averaged increases of 13.7 percent, the general fund spending in this budget is essentially flat — we are doing more with less.

Secondly, Senator Peter Bragdon blasts the argument that this budget controls spending at Red Hampshire:

Have you heard the latest spin by the tax-and-spenders who control state government these days? The Democrats say the new budget passed by the House and Senate and signed by Governor Lynch is “lean.” They say we are doing more with less. And they say spending is reduced.

Don’t believe a word of it!

At a time when 50,000 Granite Staters are out of work and paring down their home budgets to fit declining incomes, government spending continues to grow at breakneck speed. Total spending in the new budget is up over $1 billion dollars – that’s billion, with a “b” – according to the legislature’s non-partisan Office of Legislative Budget Assistant, a 10.5% increase. I don’t know many families who have increased their spending 10.5% in the last year or two, do you?

Senate set to tackle $11.6b state budget

In the Nashua Telegraph, Kevin Landrigan sets the stage for today's budget debate in the Senate:

Senate Republicans vow to try and remove three tax hikes and restore $50 million in aid to cities and towns when the state Senate votes on a proposed, two-year $11.6 billion state budget today.

Senate Republican Leader Peter Bragdon, of Milford, said the plan would preserve a business tax credit for profit-making corporations, pay for $50 million in aid to cities and towns and eliminate increases in existing taxes on cigarettes, meals, car and hotel room rentals.

To carry it out, the Senate GOP calls for across-the-board cuts in state spending totaling $245 million or about 8 percent.

Lynch Calls for Spending Restraint, Green Jobs, and Federal Stimulus

By Grant Bosse
January 8, 2009

(CONCORD) In a speech filled with applause lines, but short of specifics, New Hampshire Governor John Lynch delivered his Third Inaugural Address in the New Hampshire House Chamber this afternoon. The Hopkinton Democrat warned the Legislature of a “budget challenge of unprecedented dimensions”, but did not set out his preferred solutions, either in terms of new revenues or spending cuts.

Republican lawmakers warned Lynch and Democratic budget writers two years ago that the revenue projections used to justify spending increases were unrealistic. But Lynch repeatedly pointed to the national economic climate as the reason for New Hampshire’s budget woes, rather than the 17.5% increase in state General Fund spending over the past two years.

“The national recession is having a dramatic impact on our state budget,” Lynch stated. “New Hampshire and states across the nation have seen significant shortfalls in revenue as this recession has deepened.”

Lynch called on Congress to quickly send aid to struggling states in the form of a stimulus package, drawing the first standing ovation of the afternoon from Democratic lawmakers.

“We need national solutions to this crisis. I urge the new Congress and President-elect Obama to act quickly to pass a stimulus package that will create jobs for our workers now,” Lynch said.

Senate Ways and Means Committee Chairman Lou D’Allesandro is also counting on Washington to help close New Hampshire’s budget gap.

“Clearly, the federal stimulus is an important ingredient in the package, and it’s incumbent on the Congress of the United States to work with the incoming President to get that done sooner rather than later.”

Former Republican Governor John Sununu will likely be the next Chairman of the Republican State Committee. He wanted Lynch to take more responsibility for the problems facing New Hampshire, rather than turning to Washington.

“I’m just surprised and disappointed that our principle strategy for dealing with the deficit is to wait for the federal bailout. I was hoping that we’d hear some specifics on reductions and so on, but there weren’t any,” Sununu said.

While not mentioning the size of the current budget gap, nor the structural deficit expected in next year’s budget, Lynch argued “this next budget cannot be balanced by tweaks and minor adjustments.” He promised to “examine every area of spending, look at every program, and say ‘no’ more often that we would like.”

Lynch also echoed his opposition to either a state sales or income tax, drawing his most enthusiastic response from Republican lawmakers. Senate Minority Leader Peter Bragdon led the only GOP-backed standing-O of the speech.

“We like the idea of no sales or income tax. We like the Governor’s idea of having to say no. We wish that we had said no to things in the last two years,” Bragdon said. “I’m disappointed though to hear that there’s no exclusion of other new taxes, and no exclusion of raiding the Rainy Day Fund to pay off the overspending of the last two years.”

While Lynch’s call for fiscal restraint meant with muted applause from the Democratically-controlled Legislature, it was his new spending initiatives that received the warmest response. Lynch unveiled a “Green Jobs Initiative” to be paid for from the proceeds of the Regional Greenhouse Gas Initiative. The program would increase energy efficiency in state buildings, increases worker training programs, and create a low-interest revolving loan fund to assist New Hampshire businesses with energy efficiency or alternative energy projects.

“The Green Jobs Initiative will help create jobs for our people now, and make New Hampshire’s economy stronger for the future,” Lynch said to a chorus of applause. “Let’s help New Hampshire workers and businesses keep their competitive edge, and let’s keep good paying jobs right here in New Hampshire.”

Lynch did not say how much the Initiative would cost, though New Hampshire could receive $25 to $35 million a year based on the current cost of carbon dioxide allowances. Senate President Sylvia Larsen admitted that she hasn’t yet seen the details of the Green Jobs Initiative, but welcomes the approach.

“I think that was one of the highlights of his speech, and one which has potential both for people who might be out of work, but also for young people who are graduating who might see an opening for a career ahead of them,” Larsen commented.

House Minority Leader Sherman Packard also expressed interest in the program, providing that its cost doesn’t land on New Hampshire ratepayers.

“Anyway that we can get away from importing oil, and sending money overseas, to South America and Russia, is a great idea,” Packard argued. “But I’d have to see how he plans on paying for this, whether it’s on private people who would do this, or whether he plans on putting state money into this.”

The final third of Lynch’s address concentrated on education, congratulating New Hampshire for mandating public kindergarten in every community, and for defining an adequate education. Lynch also renewed his support for a Constitutional Amendment that would allow targeted aid to needy communities, but stopped short of lobbying the Legislature to put such an amendment on the ballot.

“I also recognize that there has not been a consensus in the Legislature on a Constitutional Amendment that would allow for that approach. I believe the discussion should continue, but we also need to meet our education responsibilities and build on the progress we have made,” Lynch added.

Lynch’s comments on education were just one area where Deputy Minority Whip Andrew Renzullo says the Governor has failed to govern.

“He was congratulating himself on the definition of an adequate education. Unfortunately, that’s a $100 million hole in the budget. What does he plan to do about it? Does he plan to come and say that we need a more reasonable definition of an adequate education?” Renzullo asked.

Republican leaders argued that Lynch’s address was another in a long line of speeches calling for bipartisan cooperation and problem solving, but lacking any clear direction. Packard says it’s time for the three-term Governor to step up.

“We still need to hear the details on how he’s going to solve the problem. This is the party in power. He’s the Governor. And we’re certainly willing to work with him, but it’s incumbent on him to bring forward his ideas on how we’re going to solve these problems,” Packard said.

Republican Representative David Hess didn’t think the speech lived up the moment.

“In these difficult times, unprecedented in the last 70 or 80 years, it’s disappointing that the Governor didn’t have any specifics about what the state can and should do to alleviate the economic conditions, to keep the unemployment rate as low as possible,” Hess argued. “These are extraordinary times, and they call for an extraordinary Inaugural Address.”

But Democratic leaders defended the speech, arguing that while it may not have contained specifics, it did set out Lynch’s priorities.

“The roadmap he presented was one which we will work to preserve the safety net for our most vulnerable citizens, and to recognize the importance of maintaining public safety,” Larsen said. “In a time when we’re cutting other programs, those are critical needs that we’re going to work to protect as we look to cut back in state government.”

Larsen said Lynch struck a balanced tone between the somber economic times, and the ability of New Hampshire to rebound.

“Through green job growth, as well as job retraining, we can hopefully grow a new economy that is perhaps not exactly the same as in the past, but one which is forward thinking and moves towards new forms of energy, alternative energy, and jobs that relate to energy savings,” Larsen said. “I thought it was an upbeat message considering the economy we’re facing.”

D’Allesandro said he could easily summarize the Governor’s message.

“What he said was ‘Listen, we’ve got a problem, but we’ve got a great country. We’ve got a great state. And if we work together, we can keep these things going and we can bring success to the down economic situation,’” D’Allesandro concluded.

State Senate Leadership

Brian Lawson at PolitickerNH.com reports on the State Senate leadership elections:

The state senate elected state Sen. Sylvia Larsen (D-Concord) for another term as senate president...

State Sen. Peter Bragdon (R-Milford) was also elected to be the Senate Republican leader. A week after the election the state senate Republican caucus nominated Bragdon to lead the caucus. Bragdon's nomination was a surprise as many observers expected state Sen. Ted Gatsas (R-Manchester) to continue serving in that role.

The senate also voted today to reappoint Tammy Wright as Senate Clerk, Robert Buchholz as Assistant Senate Clerk and Carleton "Kit" Marshall as Sergeant-at-Arms.