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8/7/2019 Budget 101- NH Budget
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Understanding the State
Operating Budget andShortfall
Charlie Arlinghaus,
Josiah Bartlett Center for Public Policy
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New Hampshire Operating Budget
State OperatingBudget
Federal FundsTax Revenues:•General Fund•Education Fund
Other funds:
•Highway•Turnpike•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 balancedby
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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Smokes and Liquor At The Track
A Different Basket of Revenue
0.00%
20.00%
40.00%
60.00%
80.00%
100.00%
1967 2010
Other
Tobacco
Liquor
Beer
Racing
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“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, beertax, utility state property tax, racing, tobac. settlement
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Ten-year Average = 3.0%
Regular Taxes 2001-2010 (no SPT, MET)
2.7
5.75.1
3.1
3.9
8.3
5.3
2.1
-9.1
2.9
-10
-8
-6
-4
-2
0
2
4
6
8
10
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
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This Fund and That Fund:Total $11.5 billion – Biennial Budget
9
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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%
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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)
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Employee costs – all funds
Wages approx. $700M
Benefits approx $250M
Retirement approx $50M
$1,000M = 17% of annual costs
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Local Aid is 45% of spending
Transfers to Towns and Schools
(millions 2010-2011)
$178.30
$2,049.70
$0.00
$500.00
$1,000.00
$1,500.00
$2,000.00
Municipal Aid School Aid
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Spending in Three Parts
Budget Components
Local Aid,
2,459,018
Debt and
Retirement,
555,664
StateGovernment,
2,255,527
-730,000
270,000
1,270,000
2,270,000
3,270,000
4,270,000
5,270,000
Components
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Spending Growth 1989-2009
74%
154%
311%
0%
50%
100%
150%
200%
250%
300%
350%
Inflation General Fund GF + ETF
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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 each
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Rainy Day Fund
Revenue Stabilization ReserveAccount
Surplus in, deficit out When does it rain? RSA 9:13-E
Suspended last 2 budgets
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How Deep is the Hole
The 2012-2013 Budget Shortfall
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Mind the Gap
Mind The Gap
4419
5058
4473
4369
4300
4400
4500
4600
4700
4800
4900
5000
5100
2006-07 2010-2011
Expenditures
Revenues
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Temporary Revenue: $597m
Federal
Stimulus,
$351
Other One-
time, $90
Borrowing,
$156
$0
$100
$200
$300
$400
$500
$600
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An $820 Million Hole
2011
OperatingShortfall,
$348.5
Debt, $91.8
Retirement, $83.6
Education Increase,
$141.2
Building Aid,
$92.5
Local Aid $62.4
$0.0
$100.0
$200.0
$300.0
$400.0
$500.0
$600.0
$700.0
$800.0
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Solving the Problem
Revenue growth?
3% annual growth = $154 million
Only $666 million to go
12.6% cut?
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The 4.5% and 5% Solution
Economic Growth of 4.5%
Cut Departments by 5%
4.5% revenue growth = $232 million
5% except local aid = $113 million
Only $475 million to go
475/2255 = 21%
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Caps and Cuts
Revenue at 3% average
Adds $154 million
Education Aid at 2011 Saves $141.2 million
Local Aid at 2011
Saves $82 million
Only $443 million to go
443/2255 = 19.6%
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Information where?
Monthly Revenue and Historical:http://admin.state.nh.us/accounting/reports.asp
Budget Documents (LBA)http://www.gencourt.state.nh.us/lba/indexbudget.html
Treasurer: Bond Statement
http://www.nh.gov/treasury/Divisions/DM/DMdocs.htm