State revenues off by $38 million

The Union Leader reports on state revenues through October, which have come in below expectations, and added $38 million to the state's fiscal problems.

A monthly report from the Department of Administrative Services shows the state took in $204 million in taxes and other revenues last month, $12 million short of the month's budget target.

Through the first four months of this fiscal year, the state has taken in $585 million, instead of the $623 million the budget was built to have at this point. The figures include $97 million in revenue to the Medicaid program from the federal government.

The DAS report shows that overall, tax revenues this fiscal year are below last year's levels by $4.6 million, less than 1 percent. October is a major revenue producer because of the concentration of business taxes that are paid. December is the next big month on the tax calendar.

State Revenues not recovering

Our colleagues at the New Hampshire Center for Public Policy Studies report that state revenues are not rebounding, at least not yet.

For the twelve months preceding September 2009, New Hampshire revenues destined for the General Fund and Education Trust Fund were 6% less than for the twelve months ending a year earlier. The decline in state revenues is broad based, affecting all revenue sources, whether from business, consumer spending, or gaming.

In December 2007, when the latest national recession started, state revenues were growing by 7% annually, but the rate of growth in state revenues started to slow. By October 2008, total state revenues were decreasing compared to the previous 12 months.

The state government is funded mainly by specific taxes on meals and rooms, beer, tobacco, business profits, lottery sales, liquor sales, interest and dividends, and real estate transactions, to name just a few sources. Each revenue source has shown a unique pattern, but all are declining.

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."

A growing hole: Sad state budget numbers

The Union Leader editorial page notes that state revenues for August were $17.6 million lower than expected.

That doesn't mean we should make state historians history right now. It's only August; the fiscal year is still new. However, identifying places in the state budget where we could save a few tens of millions of dollars would be a great idea.

Of course, that is always a great idea. But somehow legislators and the governor seem to come around to it only when there's a recession.

Republicans are hollering that the August numbers show that the Democrats' revenue forecasts were intentionally too rosy.

It's far too early to tell if revenues will meet their targets for the year. It is clear that the Department of Revenue Administration, which calculates the month to month revenue estimates after the Legislature sets the yearly targets, is still adjusting to a new Commissioner and a lack of institutional memory. September will likely tell the tale as quarterly business tax payments are due.

State revenue falls behind

Shira Schoenberg reports in the Concord Monitor on the dismal revenue figures from the month of August, as well as an explanation from the Lynch Administration.

Department of Administrative Services Commissioner Linda Hodgdon said part of the reason for the shortfall is economic, and is due to the way the projections were developed. The yearly revenue projections were set by the Legislature, working with commissioners and economists. Once the budget was passed, state agencies made the monthly projections.

Hodgdon said the monthly estimates were based on three-year averages, and the economy has worsened over those years. Because she did not know when the economy would recover, Hodgdon made the estimates as if the economy would remain the same throughout the year. That means revenues might be lower than expectations now, but could exceed expectations if the economy rebounds. "I didn't assume that by a particular month that's the month the economic recovery will happen, and more heavily weight revenue in that period," Hodgdon said. "There's no one right way to do it because no one can tell you exactly when economic recovery's going to happen."

August bad month for state revenues

Tom Fahey reports in the Union Leader that August revenues are down, way down, from the budget forecast.

State revenues came in almost 16 percent lower than expected in August, although liquor and tobacco sales are well ahead of last year's performance.

The state collected $94 million during the month, compared to $111.5 million it hoped to collect.

Net liquor revenues and tobacco taxes produced a combined $33 million for the month, well over the $9 million that business taxes produced. In the first two months of this fiscal year, liquor revenue is up 14 percent over last year, and tobacco taxes, which went up 45 cents a pack on July 1 are 41 percent ahead of last year.

However, tobacco still missed its budget target for the month by $2 million and liquor was $1.2 million short of what needed to keep the budget in balance.

Fahey notes that August is traditionally a low revenue month, so missing the projections is less crucial. September brings in quarterly payments of the state's business taxes, and will go a long ways towards determining whether this budget will meet its revenue expectations.

Rep. Steve Vaillancourt had his analysis on the revenue report up yesterday, and offers a tax by tax rundown on the revenue shortfall over at Red Hampshire.

Worst. Revenue Estimates. Ever.

Kevin Landrigan takes up most of this Sunday column in the Nashua Telegraph covering politics, which is fine if you're interested in that sort of thing. Towards the end of the column, he reports on some budget analysis from State Representative Steve Vaillancourt on how far off the state's revenue estimates were for the last two years.

Off estimates

Let's hope legislative revenue experts are more accurate in their relatively conservative forecasts for the next year than they have been in the last one.

Rep. Steve Vaillancourt, R-Manchester, gives an assist with analysis.

Taxes and fees came up a stunning $307 million short in fiscal year 2009 for a 12.2 percent shortfall.

That's the worst estimating job the state has seen going back at least to 1998, the next biggest disappointment when the slippage was $543 million or 2.7 percent. (more)

Defenders of the disastrous 2008-2009 budget now claim that the national economic downturn is solely to blame for the revenue shortfall, but that's not true. The economy certainly hurt revenues throughout 2009, but this budget never had a chance of being balanced. Revenues were going to be far short of estimates before the ink was dry on the budget.

2009 Revenues Lag to Finish Line

The Union Leader posts the Associated Press story on New Hampshire's lagging 2009 revenues:

The latest revenue report for June shows the fiscal year ended $292 million below the estimates developed two years ago. Receipts for June were $33 million below estimates, thanks mostly to poor business tax receipts.

The state received $2.2 billion over the year.

Revenue Shortfall is $306.8 Million!

Rep. Steve Vaillancourt has done some number crunching on the state's year-end revenue figures. It's not pretty:

The final numbers are out for the fiscal year, and the revenue shortfall for New Hampshire is $306.8 million. That does not include another $11.1 million shortfall in the highway fund.

NH's revenue picture still bleak

Norma Love of the Associated Press reports on New Hampshire's revenue reports. To use a technical term, it ain't good:

Revenue Commissioner Kevin Clougherty told Senate legislators Tuesday that business tax receipts so far were 17 percent behind collections for the same time last April. Clougherty said he expects more tax returns will be filed before the end of the month, but doesn't anticipate a big turnaround in the state's tax income or the economy overall.

April is one of the state's best months for business tax collections, which produce nearly one-quarter of New Hampshire's general tax revenue. The Senate Finance and Ways and Means committees will study the month's receipts before producing a revenue forecast and the Senate version of the state's two-year budget, beginning July 1.

Earlier this month, the House passed an $11.5 billion budget based on spending cuts, federal stimulus money, new taxes and increases in existing taxes. During debate in the House, Finance Chairwoman Marjorie Smith, D-Durham, said she hoped the Senate would improve the House version after lawmakers have additional information on tax receipts.