Lynch - Show us the money? Spending more than you have?

Lynch Continues to Ignore Financial Crisis

Appearing today before the House Finance Committee, Governor Lynch has proven once again that he is “out of touch” with the real financial crisis facing the State of New Hampshire and continues to ignore the fact that the State’s first $10 billion budget was based on inflated revenue projections.

“You build a budget around revenues, you don’t build revenues around a budget, which is how this budget was crafted” said Republican Leader Mike Whalley.  “‘The “Perfect Storm’” predicted last spring by Rep. Norm Major is becoming a reality that the Democrats continue to ignore.”

The governor today also told the Finance committee that the budget was “put together with sound revenue projections,” when in fact, as early as April, 2007, Rep. Norm Major, former Chair of House Ways & Means, had cautioned that, “the projections are irrationally exuberant and far too high.”  In an April press release (4/11/07) Major predicted that, “Democrats would need hundreds of millions of dollars to support their 16% increase in spending.”

While pointing out that the first six months of the fiscal year has seen revenues come in close to their projected levels, the governor ignored $18M in one-time money, $5M in funds not dispersed, and $5.7M due to the timing of January securities receipts.  Projecting the current deficit out to the end of the biennium would result in a deficit of $165M, according to Major.  Earlier today, appearing before the House Ways & Means committee, agency department heads predicted that we will be facing a revenue shortfall of anywhere between $140M and $195M.

Gov. Lynch also explained to the Finance committee that when the budget was originally crafted, economic forecasters were not predicting the severity of the situation that the nation is currently facing.   In reality, there were a number of economic indicators that were identified last spring that supported the Republican belief that revenue streams would continue to falter, setting the state for a financial crisis in New Hampshire.

“Ultimately it will be the taxpayer of this State who will have to suffer,” said Rep. Gene Chandler, Republican Policy Leader. “Last winter we urged the passage of a reasonable budget and one that was based on accurate revenue projections and economic forecasts.  Now we will have to wait and see whether the governor intends to increase taxes and fees or propose major cuts in spending to correct a problem which could have been avoided,” he added.