Steve Norton thought the news was bad when he released a report last month on the upcoming New Hampshire budget. The bottom line: Heading into the 2010-2011 budget cycle, with state revenues slumping and education costs expected to rise, lawmakers face a hole of $150 million to $500 million.
But since then, the director of the New Hampshire Center for Public Policy Studies has taken a lot of critical calls, he said. "People on both the right and the left believe that I was overly optimistic about revenue," Norton said.
State government is girding for difficult times. Gov. John Lynch has instructed department heads to construct two preliminary budget requests for 2010, expecting either level-funding or a 3 percent cut from current spending levels.
Still, legislators say its too early to know what they'll face next winter and spring. Until the November elections, it's unclear who's in charge in either Concord or Washington, D.C. More broadly, they say, no one knows for sure whether the economy will revive or continue to sink, conditions that will influence business and real estate taxes, along with the host of fees that fund state government.
"This is an extraordinarily difficult thing to try to estimate right now because the economy is having fits," said Rep. Susan Almy, a Lebanon Democrat who chairs the House Ways and Means Committee.
But no one sounded optimistic about a budget year that will be difficult for a variety of reasons. Fuel and health care costs are up. State education aid could rise as much as $100 million by 2011 under a preliminary plan legislators approved last spring.
Personnel costs are also rising fast: A new state contract gives workers a 5 percent pay raise in 2010, and the state's pension costs are expected to rise nearly 40 percent. As the economy contracts, more people may seek Medicaid or other state-funded help. Meanwhile, there are questions about how much money the state can rely on from two sources: the federal government and its own auditing department.
"Everybody knows that there's trouble in the bubble," said state Sen. Lou D'Allesandro, a Manchester Democrat who chairs the Senate Finance Committee. "Nobody expected $4 a gallon gas and $5 a gallon fuel oil. There are a series of things . . . which we can't control."
While legislators are anticipating a difficult winter of budget talks, there's still the matter of balancing the current budget. Last spring, Lynch made more than $80 million of cuts to keep the 2008-2009 budget balanced, with more expected. Legislators and the governor have predicted that the current $10.3 billion budget could fall as much as $225 million short of original revenue expectations.
The books have closed on fiscal year 2008, which ended June 30, but the final reports won't be finished until the end of the month, said Linda Hodgdon, the commissioner of the Department of Administrative Services.
As part of a series of measures intended to close the gap, the Legislature authorized the governor to take out as many as $40 million in bonds to pay for school building aid in each fiscal year, 2008 and 2009.
"I think as I sit here we're not going to need to do any of that bonding in 2008," Hodgdon said. "I think we're going to need to do all of the bonding for 2009."
The fiscal forecast will get a little clearer in October, when Hodgdon prepares an outlook of the revenues for the current fiscal year, 2009, and the two years to come.
Charlie Arlinghaus, of the Josiah Bartlett Center for Public Policy, is preparing a prediction of his own. He foresees the gap between spending trends and revenue trends as around $300 million. "I think I'm going to call it 'Starting in a Hole,' " he said.
Here's a look few at some of the factors that could drive the state budget. (next page »)
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Comments
Tax and Spend, Tax and Spend
By Dick Pender - 09/17/2008 - 4:57 amPeople, remeber this, the Government does not PRODUCE anything, they jsut take our money and spend it as they will. The Government is not part of the GNP.
Since the Government os so large now, and us working people are a small group , its time that the Government build a CASINO and offer this service to bgring in more money and stop taking it away from us. I don't care if people get addicted, that is their problem. Lets start tapping into those busses that go to CT everyday and keep those foxwoods dollars in NH, not CT.. The time has come, bring on the gambling houses, we need the revenue.
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Casino
By Originalist - 09/15/2008 - 10:44 pmI would support that and would probably never go near it. You have to fight liberals who will whine and cry about how it hurts those at the bottom of the economic ladder.
It would be a tough sell with the lilly livers in the legislature now!
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Build a Foxwoods or Mohegan Sun in the Southern tier
By Anonymous - 09/15/2008 - 11:34 amA full fledged resort casino near the Mass border would follow the state's time honored revenue formula-let the Mass residents pay, like they do for liquor and cigarettes!
The half-baked "racinos" with slots only that have been proposed in the past would be a low-ball non solution that would mostly draw from their local area. We need to get a high class Foxwoods style destination resort casino with entertainment, restaurants, shopping,etc, that will draw people from all over the world, that is within a half hour's drive of the Manchester airport-if we don't do it, Mass will, and then we'll be too late. The HUNDREDS OF MILLIONS in revenues and fees that the big casinos can provide to the state and local government would plug that revenue hole in a hurry. If we don't do it, we can watch that money go south.
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Anonymous
By Originalist - 09/15/2008 - 7:27 amWhat policies will Obama employ that will improve the condition of the economy?
Will he cut taxes? Will he increase spending or reduce it?
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New Hampshire Now Has A Choice
By Anonymous - 09/14/2008 - 11:54 pmAll across America - States are in a financial woe and large foreclosures, job loss and higher prices; McCain call for the same thing - tax the middle class and enrich the large international/national corporations and their stockholders; another large institution has filed for bankruptcy; Arnold, an actor, cannot balance a budget and raise revenue; the Bush Administration has brought this country to its knees with foreign debt - more than 40% of our debt is toward foreign investors. America for the last 8 yrs and with republicans in power for more than 20 yrs (John M included), they had the time FOR CHANGE - but they have bankrupted you and me and our children - no MORE OF THE SAME.
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My Interest
By wiildindian - 09/14/2008 - 11:52 pmI am a half breed. Half Abernaqui and half Mohawk.The casinos would provide a go
between while we develop new businesses.The casinos would help everyone in
general.Small business would thrive.Mom and Pop stores would make a
comeback.Of course we have the naysayers worried about crime surrounding the
casinos and the people who gamble a way their paycheck.But, nothing would
change there, they buy lottery tickets by the pound! Instead of allowing people of
our state to leave their money in Connecticut, we could keep it here and provide a
place for other states to leave there money with us for a change.
And the indians hope, but, don't expect to get any land back.We would have to
purchase it.And would more than likely have to purchase the rights to casino
operation from the state.That way the already affluent white men like your governor
could get richer.
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The Democratic Legislature Was Completely Irresponsible
By Anonymous - 09/14/2008 - 8:42 pmThey spent way more than the state could afford and then borrowed to make up the difference, putting this state in debt for the first time in history. I hope the voters realize that they can't allow the Democrats to remain in control without a state income tax being implemented.
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Reckless spending causing our problems
By Anonymous - 09/14/2008 - 7:50 pmThe legislature has failed the people. The governor has failed the people. The people will have failed the people if they re-elect the leaders who have failed them.
Any idiot could have forecast a downturn in state revenues when the last budget for N.H. was developed. Everyone could see a slowing in real estate sales, business profits and general spending except the Ways and Means committee in the N.H. House and the Finance committee in the Senate.
A budget that increased spending by 17.5%, bonding payments that used to be made out of cash flow, failing to enact reasonable legislation to contain retirement costs, cost of living/pay raises for state employees, enacting new spending programs such as preserving old barns and then saddling the costs on homebuyers, stifling real estate development by confiscating all the waterfront in the state and you have a great scenario for a disaster, like the one we have.
We can't wait until the national economy comes around, by then we will have an income tax that the Leaders in Concord want.
Throw the bums out, all of them.
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Bad Decision
By Anonymous - 09/14/2008 - 1:15 pmFor the Governor to insult Phil Blatsos by not renominating him for his brilliance and devotion to the state was the dumbest decision I have ever seen in state government. This should clearly come back to haunt Lynch once people find out the facts.
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wiild indian go for broke!
By C. dog e. doGy - 09/14/2008 - 12:09 pmAt the risk of repeating what I wrote previously in Daniel Hynds blogsNH Flog: Casino in New Hampshire, returning governing rights and some confiscated land back to Abenakis seems a woefully inadequate, and very belated gesture, but better that than the alternative of doing nothing. The State of NH should start by returning a chunk of State land sufficient to allow them to live free in keeping with the NH's motto. I propose Franconia Notch State Park, including Cannon Mtn. The Abenaki could do with it as they wish - build casinos, not build casinos, run the ski area, close it down. They control, they decide, including all important issues of education and ownership. Of course, the Abenaki should be the ones to pick which State land would suit their interests best, not me. I say, let them have the pick of the litter!
I suspect this would become a model for how the rest of us could learn to go back to freedom when applied to the individual level. Then we wouldn't have all this squabbling about how the pols and bureaucrats are wasting are hard earned and forcibly taken tax dollars. Or the taking of land to build this or that. Or the teaching, or not teaching of particular subject matter in government schools. Of course, that would bring up another problem: we would have nothing to bitch about on the Monitor comment board. But that's something I could live with up here in the mountains: "the only other sound's the sweep of easy wind and downy flake." That, boys and girls, is the sound of freedom.
- Wistfully musing on a flake forgotten,
C. dog e. doG
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Native American's?
By millennia - 09/14/2008 - 10:00 amNative American's being allowed to be the only ones to open and run casinos is such a scam. In Connecticut the NA's who run Foxwoods are about 1/16 American Indian.
Of course, I would qualify as I am about 1/16 Abenaki as is another letter responder who is also a photographer. We could be the conservative and liberal casino partners!
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What To Do, What To Do
By wiildindian - 09/14/2008 - 9:44 amParty affiliation shouldn't matter when it comes to a budget; common sense should
prevail though.George W. Bush does not create the budget in New Hampshire.
No employment tax is good.Our infrastructure is in trouble, our school system is
in trouble, our county jails are thriving, we are over run with police and we have no
solution to budget shortfalls.Now, cutbacks are good unless you are affected by
them.So, where could we get a windfall to alleviate our cash problems?CASINOS!
NH should have three casinos monitored by the state, run by native americans,
one on the seacoast, one in the lakes region and one in Berlin.Our state is
changing rapidly.It is no longer tucked away New Hampshire.It has lost its main
sources of income long ago, the textile mills, the shoe factories and the paper
mills.And when you lose those, you cannot sustain a thriving society.
New Hampshire's economy depended on those things.We were supposed to
become a hi-tech state, so the costs of housing soared. But, where is the hi-tech
industry?Certainly, not here.Why do we have all the jails full? Because we have
descendants of all those workers who made this a great state to live in, who, have
no hope to better their lives. Indigent people. When the governor was running for
office, he said he would help the homeless. All he did was help more people
become homeless.Half of the people in jail are those homeless people he was going to help!
In my opinion, the lowest forms of life are jail guards who live off of human
misery.If we created a decent mental health program in NH and created industry
with those highly educated minds that we have in office we could put most of
them out of a job.Create the necessary means to sustain our society and we
could fill our colleges with the young people of New Hampshire.They are the future
and every young person and repeat offender that we put in to our jails have been
betrayed by our failing society.Shame on us! Cigarette tax is putting your finger in
the dyke. Stop letting law enforcement give their opinions via police chiefs
associations and get down to developing this state in a manner that won't bring
about budget crunches.
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Yes Oldcurmudgeon you are correct!
By Originalist - 09/14/2008 - 8:35 amBeing a Barnstead resident, the selectman was correct"
"Government can not be all things to all people"
It is unbelievable that intelligent citizens want to send more money to government to have them redistribute and ration it out. A prime example is illustrated in tax dollars that go to Washington. People cheer when they give is X amount of dollars back for highways or housing. That money was HERE in the BEGINNING! Then we get a fraction back.
The federal government was set up for a couple of reasons. First and foremost was the common defense. Over the years it has grown into a central government, something that the founders were not exactly supportive of.
States should have the power and the feds should provide minimal government. When the federal government blackmails states, for instance, because their speed limit is too high, telling a state that highway money will be cut off if they do not comply with what the federal government wants, things have gone too far.
No one wants to hear this but state government needs to be run like a business. Some of the administrators at the state level would be fired in the private sector. You budget within your means, without optimistic 'pie in the sky' revenue projections.
Administrators and politicians are public employees, does anyone think that they are not looking out to pad their own futures. Legislators want to spend a dole out goodies to their constituents and stay in power.
I would love the opportunity to review the budget in depth and make suggestions as that is something I do for a living. I would be willing to bet that I could find areas to cut. Unfortunately, legislators have pet projects and political agendas.
As I have stated before "Figures don't lie but liars sure do figure". Someone should list the big spenders and those who want an income and sales tax and we all should vote NO to their re-election.
Under Shaheen, Benson and now Lynch, runaway spending has left us in the situation we are in today. It is time to reverse that and throw the "spenders" out!
Money does not grow on trees nor does it come out of a well......it is time that we stand up and say enough is enough!!!!
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Yes Oldcurmudgeon you are correct!
By Originalist - 09/14/2008 - 8:34 amBeing a Barnstead resident, the selectman was correct"
"Government can not be all things to all people"
It is unbelievable that intelligent citizens want to send more money to government to have them redistribute and ration it out. A prime example is illustrated in tax dollars that go to Washington. People cheer when they give is X amount of dollars back for highways or housing. That money was HERE in the BEGINNING! Then we get a fraction back.
The federal government was set up for a couple of reasons. First and foremost was the common defense. Over the years it has grown into a central government, something that the founders were not exactly supportive of.
States should have the power and the feds should provide minimal government. When the federal government blackmails states, for instance, because their speed limit is too high, telling a state that highway money will be cut off if they do not comply with what the federal government wants, things have gone too far.
No one wants to hear this but state government needs to be run like a business. Some of the administrators at the state level would be fired in the private sector. You budget within your means, without optimistic 'pie in the sky' revenue projections.
Administrators and politicians are public employees, does anyone think that they are not looking out to pad their own futures. Legislators want to spend a dole out goodies to their constituents and stay in power.
I would love the opportunity to review the budget in depth and make suggestions as that is something I do for a living. I would be willing to bet that I could find areas to cut. Unfortunately, legislators have pet projects and political agendas.
As I have stated before "Figures don't lie but liars sure do figure". Someone should list the big spenders and those who want an income and sales tax and we all should vote NO to their re-election.
Under Shaheen, Benson and now Lynch, runaway spending has left us in the situation we are in today. It is time to reverse that and throw the "spenders" out!
Money does not grow on trees nor does it come out of a well......it is time that we stand up and say enough is enough!!!!
to vote
irresponsible leaders
By Cliff Newton - 09/14/2008 - 8:03 amFirst to George V. Simple civics. A mayor or city manager cannot spend any money that the council does not give them to spend. County commissioners cannot spend any money that the delegation/elected house reps do not give them to spend. The governor cannot spend any money that the legislature doesn't give them to spend and the president cannot spend any money unless congress votes to spend it. With that said, your allegations that the president alone is responsible for excessive spending and debt is incorrect. All he can do is try to veto excessive spending. The democratic majority Congress, which has the lowest rating in history, and the democratic led NH Legislature, who voted in a 17.5% increase in general fund spending are the ones who got us in this mess.
Second, our economic problems have gotten much worse in the last two years. Who has been at the helm? Liberal spending democrats. Those in charge must be held to blame. At state level, despite warnings from Rep Majors, Rep Almy and her spending cabal went full speed ahead creating rosy revenue projections to back up a 17.5% increase in general fund spending. She is at the wheel, drunk with power and recklessly steering us towards the black hole deficit. If that wasn't bad enough, the Democratic led legislature passed bills like the education requirement legislation with no fiscal note or cost requirement attached. Digging us deeper in the hole.
Add to that, new business restrictions, new fees and taxes and here we are, looking at a big mess. Only a pinhead would not see this train wreck coming and Concord appears to be full of them. Want more of the same. Re-elect a majority of pinheads like you did two years ago and watch the black hole deficit swallow up more businesses, homes and freedoms.
Cliff Newton Rochester
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Lynch's record breaking increase in the NH budget this past year
By Anonymous - 09/14/2008 - 7:08 amFamilies plan ahead. Why did Lynch put in such a massive increase in state spending in the first place? The Democrat biased Monitor makes no mention of that.
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Living beyond our means
By John Linville - 09/14/2008 - 6:50 amThe Chief Selectman of Barnstead, on Friday's NHPR Exchange show, put his finger on it. Local, state and federal governments are "living beyond their means" by deficit spending. Government cannot be all things to all people. It is time that budgets are done using the zero based approach that private business uses and by first identifying all real revenues to know how much can be spent. Then develop a budget of "must have" items and don't exceed revenues! Most of us do this everyday at our kitchen table as we cope with the economic downturn. But our politiicians, of both parties, live in lala land, where money is printed in the basement and debt is considered a good thing. It is time to return to rockbound granite fiscal sanity in our country.
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From George Vreeland Hill
By George Vreeland Hill - 09/14/2008 - 2:37 amThe whole country is a mess.
Not just New Hampshire.
Bush has spent so much money on his war in Iraq and other places not American, that we now owe money to China because Bush had to borrow from them.
What Bush did was insane.
And he is not done.
Wow!
The first step here in New Hampshire is to tell the Republicans to take a hike.
We have had enough of their spending us out of business ways.
Then we need to stop giving teachers raises while we are having these massive budget problems.
Then, we need to cut some money to the many people in office.
Most of them do not need the staff that they have.
Give tax breaks to business owners who hire, and recover that money by stop giving money to those who mooch of the system like welfare mothers with more than two children who have had those children while living on welfare.
Find the fathers and make them pay, or make the mothers work.
Stop giving money and housing to illegals.
They come here to live while many hard working Americans lose their own homes.
That is bs.
Stop high interest rates (21 to 30% or so is high) during these times with executive order.
President Obama's order.
Stop this idiot war in Iraq and spend the money here.
The money spent over there to help the lives of the Iraqi people, has hurt our lives over here.
Yes, help people.
Help all you can.
But not to the point where Americans suffer.
Sorry, but that is not the way to make things better.
I could write a book on this, but the Monitor's forum is not the place to write tens of thousands of words.
This will do for starters.
You know where I stand!
George Vreeland Hill
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