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Editorial: Raiding dedicated funds diminishes faith in government

Last week, in a gesture akin to flicking a piece of lint off a shoulder, the New Hampshire House killed a bill that called for a committee to study whether the state Constitution should be amended to prevent the diversion of money raised for one purpose to be used for another – namely balancing the state’s chronically underfunded budget.

So let the sweeping of the dedicated funds called for in Gov. Maggie Hassan’s budget proceed with as few screeches and howls as possible. The Legislature has shown itself once again to be just as irresponsible on this topic as generations of governors.

Dedicated funds are bait-and-switch operations. They consist of the creation of a new tax or fee whose revenue is targeted for a worthy purpose, like funding the Fish and Game Department or paying for smoking cessation, energy efficiency and conservation programs. But that revenue is inevitably drained by lawmakers for other uses because that’s just the nature of government in a state averse to raising revenue in a straightforward way.

Dover Rep. Peter Bixby’s bill might better have been framed as a proposal to amend the Constitution rather than create a study committee, but his point remains. Raiding dedicated funds diminishes faith in government. It is a deceit perpetrated on those whose objections to new taxes and fees might have been more strenuous if they knew the money would go to the general fund and not a specific mission.

That’s certainly the case with the $25 surcharge on real estate transactions. It was sold as a way to provide a steady source of funding for the state’s Land and Community Heritage Investment Program. Yet since 2008, when the surcharge was instituted, lawmakers have swiped more of the dedicated revenue than they have allowed the popular conservation program to keep. The tally isn’t even close, according to Hooksett Rep. David Hess, an LCHIP supporter: $16 million for the general fund, $6 million for LCHIP.

The dedicated funds for boater and motorcyclist education, $13.5 million dedicated to a scholarship program for needy residents, money for alcohol treatment, and money for energy conservation raised by the state’s participation in the Regional Greenhouse Gas Initiative have all been, let’s say, re-allocated. The RGGI fund is a prime target for another raid because it’s big – $15 million with another $15 million or $16 million expected in June – and its use for renewable energy purposes has been controversial. But a raid would amount to another hidden tax on electric customers by lawmakers intent on avoiding accountability for tax increases.

Because they are so misleading and because they are designed to shield some programs from the biennial battle for their share of general fund appropriations, dedicated funds are not ideal. They can serve a valuable purpose by providing some hope for funding continuity for programs that need consistent support to be worth doing at all. That’s particularly true in a state that budgets biennially, has a two-year term for governor and a Legislature with high turnover. But they need more protection.

Higher-than-expected state tax revenue in March suggests that Hassan’s projected $41 million raid on dedicated funds could be much smaller. But the ease with which the governor looked to the dedicated funds to resolve her budget problems suggests that, to keep the system honest, amending the state Constitution to require a two-thirds majority to divert dedicated funds should be considered. There’s certainly no honor in the way such funds are handled now.

Legacy Comments14

Bush and O'Brien are history. The fact that you keep going back to them speaks volumes toward your refusal about where we are and what needs to be done. Our economy is not recovering. Our entitlements are growing, our school system is on the wrong track, and the folks who are playing politics are screwing us all over. When did we start trusting politicians? The Obama ride is over. All that he has put out there is coming to your wallet. The great ideas will now be revealed as total failures. Govt cannot manage anything, even their own depts, yet folks trust them. You folks voted for him based on what? It was not his experience, and the second time it was not his record. Who is in denial here?

Democrats? Where are the jobs?

Why, in the Government of course.

GWTW, I was talking about real jobs, not make work jobs. LOL

Sail, you do know that raiding dedicated funds is not a Dem or Republican issue. In fact if you READ the article you will read that " "Yet since 2008, when the surcharge was instituted, lawmakers have swiped more of the dedicated revenue than they have allowed the popular conservation program to keep. The tally isn’t even close, according to Hooksett Rep. David Hess, an LCHIP supporter: $16 million for the general fund, $6 million for LCHIP." The Dems held the house 2008-2010 and the Republicans 2010-2012. And all the other funds mentioned are used because the state doesn't not have a consistent revenue stream, and by raiding these funds, they can get needed revenue without the dreaded 'raise taxes' - and with these dedicated funds they can hide their actions. Certainly a bi-partisan effort.

so much for that "LASER LIKE FOCUS ON JOBS" the Houdini democrats got the low information voters to believe

Don't waste your breath..Sail and the majority of the conservatives on this column still refuse to take responsibility for all the failed Republican policies during Bush Jr and company, to include all the craziness of this last NH State legislature ie the Obrien crowd. As far as they are concerned only Liberals are at fault for any ills that happen, and that is why as far as I'm concerned, most have little to no credibility.

It is amazing that progressives are still making excuses for Obama after 4 1/2 years of failed policies and excessive spending. They are still blaming Bush. Imagine if the CEO of any huge corporation blamed his predecessor for even 6 months, he would lose all credibility. The Obama apologists live in the true "deniosphere". As for O'Brien, well, he is diminished to a back seat in the legislature. Now, where are the jobs, Democrats?

Rather than leaving in the proverbial "out", a 2/3 vote in this case, how about the law just saying dedicated funds cannot be transferred. Period. Of course we all know that even if this passed, they would just start rearranging departments so they could say the money stayed in a department. After all its politics where society has grown to one expect/accept lies and deception.

This is what you get when you elect democrats..... Houdini like slight of hand budgeting........electing democrats is like sleeping with bed bugs

You know sail, if the legislature created an income tax that would pay the whole education cost we could dedicate it as a first try. Would it work or would good conservatives try to keep the education funding in property taxes? Just curious...

Have you already forgotten the 2012 ballot question? 57% of NH voted for a constitutional ban on an income tax. Thats a pretty strong message, don't you think???

Have you forgotten that 78% of the people wanted to repeal the Bush tax cuts. AND YET, Congress did not do it.

78% of the people did not want to repeal the Bush tax cuts, the poll was skewed with 63% of those responding identifying themselves as Democrats and the question was wording to get a response equal to 73%. Let's be honest here.

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