Crafting a responsible budget for NH
By approving a $11.3 billion two-year budget, the NH Senate took an important step to grow New Hampshire’s economy and provide vital services to those most in need.
The first step in determining our budget priorities is figuring out how much money we will have to spend. Estimating state revenues more than two years into the future is always uncertain, and it is crucial that we be conservative in our estimates. We saw how painful this mistake could be, when in 2010, rosy revenue estimates failed to materialize, forcing a special session to cover a budget deficit of nearly $300 million.
The estimates on which we based this budget project 2 percent annual growth over the next two years in state General Fund revenues. It would be tempting to count on higher revenues in order to justify higher spending. We certainly hope the economy picks up speed, but you can’t spend hope.
The governor’s budget planned on an additional $110 million in tax increases, on everything from small businesses to cigarettes to car registrations. Our budget contains no tax increases.
In fact, we were able to afford a modest reduction in business taxes, and businesses need the relief. As Massachusetts, Rhode Island, and other states lower taxes in order to attract new business, New Hampshire could soon have the highest business taxes in New England. We already rank 48th in the country.
Tax rates will go down for businesses that employ 95 percent of New Hampshire's private sector workforce, leaving entrepreneurs with more money to reinvest. It will also serve as a beacon that after four years of tepid economic growth, the Granite State is again open for business.
We’re also proud that this budget more than doubles the state’s Rainy Day Fund to $21 million. Rebuilding our fiscal reserve helps our bond rating and provides a cushion against an unexpected economic downturn.
Ultimately, budgets are about priorities, and our top priority was restoring funding for programs aimed at those most in need.
Within the Department of Health and Human Services, we were able to fully fund developmental disabilities and the waitlist, fully fund Meals on Wheels, and restore funding for ServiceLink, which helps connect seniors to the programs they rely on.
Faced with a growing crisis of opioid and substance abuse, we were able to stand up the alcohol fund by dedicating proceeds from the Liquor Commission for the first time in over a decade. We also ensured that the 10-bed crisis unit at New Hampshire Hospital will open without delay, and restored
Governor Hassan’s cut to nursing homes and home health care providers, also providing a rate increase for home health care providers for the first time since 2006.
The Senate budget lifts the cap on state adequacy grants, providing an additional $4 million to local schools, and increasing state support for charter school students. It increases the state’s investment in the community college system, triggering a two-year freeze on tuition, and increases funding for the university system.
The Senate budget prioritizes road and bridge construction by targeting more money to municipal construction projects, increasing state aid from $60 million to $70 million over the biennium. By restructuring our Highway Fund debt through a federal pilot program, we’re able to use more money on highway construction and maintenance, and less on interest payments.
We’ve restructured our public safety programs to ensure sustainable funding without raiding the Highway Fund. By dedicating funds for Homeland Security, adding positions and overtime at the Department of Corrections, funding the Department of Safety Detective Bureau, and increasing pay for courthouse security, we are meeting the Legislature’s commitment to protecting the public.
Sen. Jeanie Forrester, R-Plymouth, chairs the Senate Finance Committee. Sen. David Boutin, R-Hooksett, chairs the Senate Ways and Means Committee.