NH Revenues: January 2008 Archives
Article Date: Monday, January 28, 2008
Governor Lynch managed to paint a rosy picture about the future of New Hampshire in his State of the State address before the legislature last week. And while we agree that New Hampshire is, "a strong state, with a solid foundation upon which to build," there is still much work to be done to prevent the financial crisis that Republicans have been warning about since last spring.
The governor needs to realize that Republicans are more than willing to reach across the aisle and work together with him to erase the growing state deficit, but first the he must be willing to admit that the problem we are facing is much larger than the one he talked about in his address.
By admitting to a $50 million deficit last week, Gov. Lynch took an important first step, but he did not nearly go far enough. The problem is more like a $150 million problem. In fact, even his own department heads, appearing before the House Ways and Means committee, predicted revenue shortfalls of anywhere between $140 million and $195 million for the biennium. As far back as last spring Rep. Norm Major, a veteran of the House Ways and Means Committee and former chairman, was warning of a "Perfect Storm" should the Democrat-controlled House accept the inflated revenue projections in support of the state's first $10 billion budget-projections that he believed then were overly optimistic and unsustainable.
To compound the problem, in June revenue estimates were artificially raised by close to $40 million, to give the appearance of a balanced budget. Rep. Major's warning fell on deaf ears, the inflated revenue figures were accepted, the General Fund expenditures were increased by 17.5 percent, and now the state is facing a real crisis.
The governor would have you believe that economic forecasters were not predicting the severity of the situation that the nation is currently facing at the time the state budget was being crafted. However, there were clearly a number of economic indicators that were identified last spring by Rep. Norm Major that supported the prediction that revenue streams would continue to falter, setting the state up for a financial crisis.
The governor would also have you believe that revenues for the first six months of the fiscal year are coming in close to their projected levels. What he failed to tell you was that his figures ignore $18 million in one-time money, $5 million in funds not dispersed, and $5.7 million due to the timing of January securities receipts. Projecting the current deficit out to the end of the biennium could result in a deficit as high as $165 million. Despite these facts, he still holds to the belief that the budget shortfall is $50 million.
By recognizing that there is a deficit and by pledging to withhold support for any future spending bills, the governor has taken an important first step. We are ready to work with Governor Lynch to take the next step and make the necessary moves to eliminate the potential deficit of at least $150 million and put the budget back into balance. It is time to face reality and deal with the larger deficit before the taxpayer of this state has to suffer further.
State Rep. Mike Whalley is House Republican Leader. He lives in Alton.
FOR IMMEDIATE RELEASE
Date: January 16, 2008
603-225-9341 office, 603-520-5450 cell
NH GOP CHAIR FERGUS CULLEN ON LYNCH SPENDING ANNOUNCEMENT
NH GOP Chairman