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1 Understanding and Explaining The New Hampshire State Budget Charlie Arlinghaus, Josiah Bartlett Center for Public Policy.

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Presentation on theme: "1 Understanding and Explaining The New Hampshire State Budget Charlie Arlinghaus, Josiah Bartlett Center for Public Policy."— Presentation transcript:

1 1 Understanding and Explaining The New Hampshire State Budget Charlie Arlinghaus, Josiah Bartlett Center for Public Policy

2 2 New Hampshire Operating Budget State Operating Budget Federal Funds Tax Revenues: General Fund Education Fund Other funds: Highway Turnpike Fish and Game “Other Funds”

3 3 New Hampshire State Budget  24 month budget  2 one year components  Balanced Budget law  July 1 – June 30 Fiscal Year  Capital and Operating separate

4 4 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”

5 5 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?

6 6 General and Education Revenues  Combined to Balance as if one fund  Diverse basket – 10 sources 81%  FY $1,980M ( )  Business combined $611M – 31%  Meals and Rooms; Tobacco; Liquor; Int/Div; RETT; Insurance; Communications, Lottery  Medicaid “enhancement”

7 7 “Unrestricted revenue”: $1,853M (not including state property tax)  Business Taxes - $504 – 27%  Meals and Rooms - $232 – 12.5%  Tobacco - $244 – 13%  Liquor - $120 – 6.5%  I & D - $84.5– 4.5%  Real Estate Transfer – $84.5 – 4.5%  Insurance – $87 – 4.5%  Communications - $80 – 4.3%  Lottery - $66 – 3.5%  Medicaid Enhancement - $118 – 6%  Other: Court fees, securities revenue, utility taxes, beer tax, utility state property tax, racing, tobac. settlement

8 8 Spending (44%)  Education: Trust fund ($958m) plus  Just the general fund – 6 Categories General Government - $324M – 21% Justice $227M – 15% Resources $41M – 3% Transportation $1M – 0.1% (highway, turnpike funds) Health and Social $765M - 49% Education $201 – 13% (plus education fund)

9 9 Spending (100%)  The Six Categories (All Funds) General Government - $555M – 10% Justice $691M – 12% Resources $344M – 8% Transportation $566M – 10% Health and Social $2087M - 36% Education $1502 – 26%

10 10 This Fund and That Fund  Total $11.5 billion – 2 years General Fund - $3.2B* – 30% (was 31%) Federal Funds - $ % (was 29%) Education Fund - $1.9B – 17% (was 17) Other “Other Funds” - $1.9B – 17% (15) Highway Fund - $627M – 5.4% (5.4) Turnpike Fund - $155M – 1.5% (1.5) Fish and Game - $27M – 0.2% (0.2)

11 11 Employee costs  12,000 45,800  Wages approx. $600M  Benefits approx $250M  Retirement approx $50M  $900M = 15% of annual costs

12 12 Local Aid?  2009 – Education 1.017B  2010 – Education 1.026B  2009 – Municipal $125M  2010 – Municipal $93M  Combined is 45% of GF/ETF Spending

13 13 Spending Trends  How to Measure – 2 yr? Biennial?  Over Twenty years:  General Fund – 4.5% annual  Biennial increase ave. 8.7%  GF + ETF 10 yr ave. – 2.55%  Inflation 20 yr – 2.6%  1989 adjusted – 1,025,000

14 14 Spending Growth

15 15 23% equals $2.2 Billion  Recent Growth – Two Biennia  01: 819M-1102M (+283) (+34%)  02: M (+529) (+62%)  03: M(+218) (+22%)  04: M (+63) (+6%)  05: M (+872) (+26%)  06: M (+248) (+9%)  Total: (+2211)(+23%)

16 16 How do we Balance?  Surplus Statement  Budget minus lapses (net approp.)  Unrestricted revenue  Fund balance plus ETF surplus  Two year total not each

17 17 Rainy Day Fund  Revenue Stabilization Reserve Account  Surplus in, deficit out  When does it rain? RSA 9:13-E  Suspended last 2 budgets

18 18 The New Legislature, 2011  October 1, 2010/ November 1  Tentative Budget - DAS  Governor’s Address – February 15  6 weeks: House, Senate, Conference  Starting point: $ M?

19 19 “The Deficit”  General and Education Funds  : $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)

20 20 Mind the Gap

21 21 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

22 22 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*

23 23 Information where?  Monthly Revenue and Historical:  Budget Document (LBA) Treasurer: Bond Statement


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