Understanding and

Explaining The New

Hampshire State Budget

Charlie Arlinghaus,

Josiah Bartlett Center for Public Policy

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New Hampshire Operating
Budget
State Operating
Budget

Other funds:
Tax Revenues: •Highway
•General Fund •Turnpike
Federal Funds
•Education Fund •Fish and Game
•“Other Funds”

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New Hampshire State Budget
24 month budget
2 one-year components
Balanced Budget law
July 1 – June 30 Fiscal Year
Capital and Operating separate

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Balanced Budget Law
RSA 9:8-B
Each fund must be balanced
Expenditures for biennium balanced by
Estimated revenue
Money remaining from prior biennium
Bonding (debt) prohibited for “operating
expenditures”

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Education Trust Fund
Created in 1998
Response to Claremont case
Transparency re: tax increases
Not a real trust fund
Transfers to and from General fund
Statewide Property Tax
Separate or Combined?

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General and Education Revenues
Combined to Balance as if one fund
Diverse basket – 10 sources=81%
FY 2010 - $1,980M ($2,343M-$363M)
Business combined $611M=31%
Meals & Rooms; Tobacco; Liquor; Interest &
Dividends; RETT; Insurance; Communications, Lottery
Medicaid “Enhancement”

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“Unrestricted revenue”: $1,853M
(not including state property tax)

Other: Court fees, securities revenue, utility taxes, beer tax, utility state
property tax, racing, tobacco settlement
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Spending (44% of total)
Education: Trust fund ($958m) plus
Just the General Fund – 6 Categories

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Spending (100% of total)
The Six Categories (All Funds)

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This Fund and That Fund
Total $11.5 billion – Biennial Budget

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Employee costs
12,000 classified employees at $45,800
Wages approximately $600M
Benefits approximately $250M
Retirement approximately $50M

$900M = 15% of annual costs

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Local Aid?
2009 – Education 1.017B
2010 – Education 1.026B

2009 – Municipal $125M

2010 – Municipal $93M

Combined is 45% of GF/ETF Spending

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Spending Trends
How to Measure – 2 yr? Biennial?
Over Twenty years:
General Fund – 4.5% annual
Biennial increase avg. 8.7%
GF + ETF 10 yr avg. – 2.55%
Inflation 20 yr – 2.6%
1989 adjusted – $1,025,000

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Spending Growth 1989-2009
350%

300%
311%
250%

200%

150%
154%
100%

50% 74%
0%

Inflation General Fund GF + ETF

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23% equals $2.2 Billion

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How do we Balance?
Surplus Statement
Budget minus lapses (net approp.)
Unrestricted revenue
Fund balance plus ETF surplus
Two year total, not annually

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Rainy Day Fund
Revenue Stabilization Reserve Account
Surplus in, deficit out
When does it rain? RSA 9:13-E
Suspended last two budgets

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The New Legislature, 2011
Budge Submissions- October 1, 2010- November 1,
2010
Tentative Budget - DAS
Governor’s Address – February 15, 2011
6 weeks each: House, Senate, Conference
Starting point: $600-900M projected deficit?

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“The Deficit”
General and Education Funds
2010-2011: $887M “One-time”
FY2011 fast forward: $691M
$176.8 x 2=$353.7
Plus $337.4 temporary
$691 Million
Assume zero tax, zero spend (or+10.4)

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 Mind The Gap

5100
5058
5000

4900

4800
Expenditures
4700
Revenues
4600

4500
4473

4400 4419 4369

4300
2006-07 2010-2011

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Capital Budget and Debt
Operating v. Capital
$239 M
General Fund v. General Obligation
Self-supporting
Debt Issued offset by Debt retired
Growth $644M to $823M (28% - 4 yr)
Differing Opinions

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The $6.5 Billion Debt Mountain
Pensions: 3.55B +?
OPEB: $2.47 Billion
Other Health: $496 million
Judicial: $15.8 million

20 years ago – zero*

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Information where?
Monthly Revenue and Historical:
http://admin.state.nh.us/accounting/reports.asp
Budget Document (LBA)
http://www.gencourt.state.nh.us/lba/indexbudget.html

Treasurer: Bond Statement

http://www.nh.gov/treasury/Divisions/DM/DMdocs.htm

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