Hassan’s spending freeze proposal approved
Budget Director Gerard Murphy listens as Gov. Maggie Hassan speaks to a joint legislative committee Thursday May 21, 2014 in Concord, N.H. Hassan requested to freeze hiring, equipment purchases and out-of-state travel. Hassan said that a $25 million budget surplus in March had nearly evaporated by the end of April to just under $4 million. A legislative committee approved Hassan's proposal. (AP Photo/Jim Cole)
With lawmakers’ approval, Gov. Maggie Hassan issued an executive order yesterday freezing most hiring, equipment purchases and out-of-state travel paid for with New Hampshire state tax funds.
The joint legislative fiscal committee voted unanimously to approve Hassan’s request, in keeping with a practice utilized by governors when confronted with potential budget deficits.
Hassan said a $25 million budget surplus in March had nearly evaporated by the end of April to just under $4 million. April revenue collections were $22 million below projections due mostly to lower-than-expected revenues from taxes on business, interest and dividends.
“We are taking the fiscally responsible, pre-emptive step of putting a freeze into place now so we are prepared in case the revenue trends seen in April continue,” Hassan said.
Hassan said the judicial branch is implementing a similar freeze and suggested the Legislature do the same.
Agencies can seek a waiver to approve spending frozen by Hassan’s executive order. The hiring freeze does not apply to workers providing direct or custodial care or to law enforcement. Exceptions also are made for purchases of food, drugs, fuel, medical supplies and items needed in an emergency.
Hassan said if revenues in June are weak, more spending cuts may be needed, including some that require a special legislative session this summer for lawmakers to approve.
“These cuts, as you know, will not be easy,” she said.
Senate President Chuck Morse said spending, not revenue, is what needs to be managed.
“The state does not have a revenue problem,” said Morse, a Salem Republican.
Morse said he did not know whether a special session would be needed unless no agreement is reached in the next week on a fix to a tax on hospitals that two judges have ruled unconstitutional. The state collects about $185 million from the tax annually.
Legislative leaders, Hassan and hospital representatives have been meeting behind closed doors to try to reach a settlement. House and Senate negotiators also hope to find a legislative fix by a May 30 legislative deadline.