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N.H.’s bond outlook falls from ‘stable’ to ‘negative’

Standard & Poor’s downgraded the state’s outlook on general obligation and state-guaranteed bonds from “stable” to “negative” yesterday, based largely on a recent court ruling that said a state tax on hospitals that brings in significant revenue is illegal. That ruling, combined with the state’s low reserve fund and unfunded pension liability, puts New Hampshire in a “thin financial position,” the report from the credit rating agency said.

The state’s bond rating remains at AA. If the state’s bond rating goes down, interest rates will rise, causing the state to spend more to service its debt. Despite the downgrade in the state’s bond outlook, the Standard & Poor’s report rated the state’s financial management as “good.”

Earlier this month, Hillsborough County Superior Court ruled that the Medicaid Enhancement Tax the state levies against hospitals is unconstitutional because it treats hospitals differently from other facilities that provide health services. The state plans to appeal the decision, which would leave significant holes in the state budget if it stands. The current state budget includes $145.9 million in revenue from the tax.

Senate and House Republicans were quick to jump on the downgrade yesterday as evidence that the Legislature needs to put $15.3 million in surplus money from last year’s budget into the rainy day fund. The Republican-led Senate passed a bill to do that, but the House passed a different bill that would give $7 million of that surplus to the state Department of Health and Human Services. The state’s rainy day fund has $9.3 million, which is less than 1 percent of the unrestricted general fund budget. Former state treasurer Catherine Provencher said the fund should be 5 to 10 percent of the general fund. The state also has a $4.64 billion unfunded liability in the public employee pension system.

“The S&P analysis provides a clear road map as to how we can improve our state’s economic position and better prepare for unanticipated fiscal events. As stewards of the taxpayers’ dollars, it is our responsibility to take these recommendations seriously and act accordingly,” Senate President Chuck Morse, a Salem Republican, said in a statement.

Both of the Republican candidates for governor, Walt Havenstein and Andrew Hemingway, as well as the state Republican Party, blamed the downgrade on weak leadership by Democratic Gov. Maggie Hassan.

Democrats, however, placed the blame on the last Legislature, led by Republicans, which reduced how much the hospitals were reimbursed for the tax. Hassan said the downgrade underscores the need to work quickly to solve the looming problems if the state can no longer levy the hospital tax. In statements, both she and House Speaker Terie Norelli, a Portsmouth Democrat, appear to be maintaining their positions on the need to send some surplus money to the HHS rather than the rainy day fund.

“We worked with the governor and Senate during the budget process last year to begin the recovery from the decisions made by the prior Legislature that left us vulnerable to litigation, weakened our communities and lacked the forward thinking that is essential to keeping the state’s economy strong,” Norelli said. “Fiscal stewardship is about more than just spending as little as possible today, it’s about ensuring that we make smart choices about how we spend each and every taxpayer dollar.”

(Kathleen Ronayne can be reached at 369-3309 or or on Twitter @kronayne.)

Legacy Comments19

Off Topic, but another killing at a school. Milford CT. 16 year old boy stabs and throws a 16 year old girl down the stairs. he asked her to go to the Prom, she said no, she has a boyfriend, so he killed her. We need to address the issue with our boys. We are doing something terribly wrong. Our young men are mentally ill, violent and angry. We need to find out why.

Thanks to O'Brien and his cronies my property taxes went up 11% so he could brag how he "balanced" the budget by pushing everything down to the counties and towns and putting in an un Constitutional tax on the hospitals.

Your taxes went up Tillie because your party cannot stop spending. Think about it. You are responsible for making sure you do not overspend personally, and charge up your credit cards. There is absolutely nothing wrong with making sure our taxpayer dollars are spent wisely. They should be spent where they do the most good and show results. If you have to keep throwing more money at failed programs, then the obvious answer is that those programs need to be fixed. That may include waste, fraud and a host of other bad management traits. Fixing programs does not mean eliminating them. If your grow govt, there will be more waste, fraud and poor management. That has been proven. Anybody who has had to deal with any govt dept knows first hand that most depts. are run badly. The answer is not bigger govt.

No Rabbit, that is not why they went up. If I find I can't live on what I am making any more, I will get a part time job and have more income. If the State has cut to the bone, and cheated as much of the Fed as it can, it is time for the rich to start paying their fair share of taxes.

How much more do you want the rich to pay Tillie? I read what Romney paid, millions. Yet that is not good enough. I also read what he gave to charity. Who do you think create the wealth here in the US? Do you actually believe that folks will open a business here and deal with mandates and high taxes on that business? Not happening. I have always been in favor of a flat tax. Everybody pays the same tax. Everybody contributes. By the way, investments are not just for the rich. Some of us have invested small amounts in IRA's etc for our retirement and a few stocks. We are hit when investment taxes rise. We have a spending problem. A problem that the left refuse to accept. Just the opposite, they want to spend more, and then have to find more revenue streams. How has all that spending benefited us? When is the last time any leftie stated a program is not producing results, we need to fix it? Your answer is always more spending. You have no desire to reform anything. Just want more folks signing up for freebies. The money to support these freebies has to come from somewhere. At some point you run out of other people's money. Manufacturing left, yet the left never learned the lesson why. Now the wealthy will leave also. They are already investing overseas in droves. Your policies will not keep them here, they will drive them away. Economics is a subject the left ignore. That is why our economy is in the pits.

I have no sympathy for the rich. They are well able to take care of themselves. They do not pay their fair share and have all kinds of ways to get out of it, which also includes their charities. What are these "freebies"? Name them. We have corporate welfare, welfare for the ranching industry, and farming and big oil, but I don't think this is what you mean by "freebies." Don't get me started on the economy in the pits. The last three recessions started under Republican presidents..

The wealthy don't want your sympathy. They want you to stop being jealous and pull yourself up by the bootstraps and take care of yourself. They pay plenty, in fact 90% of the freight for perks that you and others receive. The rest of your post is hyperbole and empty rhetoric as usual. The economy is in the pits because we are being led by an arrogant, egotistical loser who could not handle managing a 7-11 much less this country. No, tillie, that is not "racist". It is a fact.

So many words used to say so very, very little. Manufacturing left because it was more profitable to make things where there is no such thing as a living wage. Used to be that manufacturing was where you could get a job right out of high school and make a decent living. Manufacturing was not driven out by mandates or regulations, unless you consider hazardous waste and pollution acceptable. NH does not have the transportation infrastructure nor affordable energy to be attractive to business. The north country lost their paper mills in part due to high energy costs and foreign competition. A lions share of manufacturing has been lost to advances in automation and technology. Remember when they used to say that automation and robots would free up workers so they could do more? Think about it for a minute - they lied. You say Romney paid millions in taxes how much more should he pay. Romney routinely pays on average 14.1% tax. That is the key percentage, he pays alot in taxes because this country has afforded him the opportunity to succeed. 14.% of someone making $50,000 is just as much of a hardship. To avoid any confusion - besides ACA what do you as a rightie consider a leftie program?

O'Brien pushed through many ALEC bills, whose effect were to make NH into Mississippi, and Bragdon went along with many of these bills, with which NH is still stuck with. Of course, Bragdon got a dream job. Is he running again? I had hopes that Morse would be different, but beware. Now that he has his I-93 funding, it will be NO, NO, NO on everything else. And beware of the AFP gang. If they get what they want, we will all be peasants of the Koch Brothers.

ALEC's total annual budget is only $7 Million. If you are afraid of that infinitesimal group then Act Blue, with just short of $100 million in contributions must have you shaking in your boots. BTW Koch Bros ranked 59th. AFSCME ($60.6 million), NEA ($53.5 million), IBEW ($44.4 million), UAW ($41.6 million), Carpenters & Joiners ($39.2 million) and SEIU ($38.3 million).....and then there is the Hundreds of Million the teachers unions spend.

Good Point BPR and the advertising budget alone for Obamacare, a total and utter failure that the majority of the people do not want, has already totalled $774M and the White House is requesting another $684M totalling $1.5B in propaganda spending by the end of FY2015. "New Congressional estimates show the Obama administration is requesting another $774 million for Obamacare “outreach” and advertising in the 2015 budget. This is on top of the estimated $684 million they spent this year and the $52 million they spent on high-profile ads with athletes and Hollywood celebrities. That means the combined total in taxpayer funded advertising will be over $1.5 billion"

Right with you Tillie! Any young person that stays in N.H. is an idiot, as there is no future here. Who wants to live in a State where they are riding backward in their saddles. It is such a pretty place to live. So, sad they just don't get it. Pretty depressing, as I see no will to really change the status quo!!

For those of us who have raised kids here in NH, we can honestly say that NH does not have a lot to offer. Check the industries here. We have tourist attractions, tons of hair salons, pizza joints, and not a lot of great retail. All those things do not require a college education. The youth are all about technology, music, and socializing. Where do they go in NH for any of that? They go after it in cities like Boston, NYC, etc. Some manage to succeed, and others return home, eaten up by the challenges of competing in big cities. My daughter just had her 10th HS reunion. Very few of her classmates stayed in NH. Their college degrees could not be used here, so they had no choice but to go elsewhere, mostly big cities. The few that stayed are in the medical field or teach. I have noticed that even the entertainment in NH has not measured up. Look at what is showing at the Verizon Ctr and the Capital Ctr of The Arts. Not exactly aimed at attracting a young crowd.

This can be laid right at the feet of the 2011 O'Brien legislature. The repercussions from those two years will be felt for a long time.

Responsible Republicans balanced the budget with no new taxes after debt & deficit democrats left an almost $$$$$ 1 Billion hole.

This has nothing to do with liberals. It is about a State that refuses to progress ahead with the times. To allow the bond rating to go into negative is deplorable, to say the least. N.H. needs a revenue source and to stop dumping everything on the property tax and towns. Don't want an income tax, sales tax, casino. Wake up and come out of the fog people. It takes so much to run a State and no longer can it just be property taxes paying the bills. We could have had two nice casinos at the Speedway. Would have brought money to the State and provide needed jobs. Voted that down. Dumb move!! Now, on top of this depressing turn of events, we have full page coverage of our former House Speaker O'Brien ranting and raving how we need to go back to 1776. "UNBELIEVABLE"!!!

Right and people running that promise to bring us back to the good old 1970s. I watch NH Business on WMUR, not a liberal bastion of news but all the businesses of NH say we have to change our way of funding state government, it is unsustainable to keep raising property taxes. We will have no one living here but the super rich who have retired to their "vacation" homes and the very poor. The young people that are needed to keep a state thriving are leaving in droves.

thats what happens when more than half the state is a tourist destination. There is nothing jobs. Dont touch it..or build anything....or you'll ruin the view....and on it goes

democrats in power - this is what you get - liberals sheeeesh

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