Grant Bosse: Congrats, Governor-Elect! Now, get to work
Congratulations, Governor-Elect Hassan/Lamontagne. I had to submit this column before the polls closed last night, but believe me, I had you winning all along!
Now that you’ve had a good 12 hours to bask in your victory, get to work. Your budget submission to the Legislature is due in mid-February, which means you don’t have time to wait until you take the oath of office in January to start writing the budget that will define your first term as governor.
Last month, the heads of New Hampshire’s 47 agencies, boards and commissions submitted their recommendations for the 2014-15 budget. These wish lists amounted to a 19 percent increase, from just over $10 billion to just under $12 billion in total state spending. You’re a parent, so you know that these requests are about as realistic as your kids’ Christmas lists.
Next week, these same department heads must submit a parallel plan, outlining how they would set priorities under a 10 percent budget cut from current spending levels. This exercise will be far more useful than the all-you-can-eat budget submissions we saw last month.
That’s not to say that you should cut each department by 10 percent. Seeing how each department prioritizes its programs will go a long way toward determining which are essential and which would be really nice to have, if we can afford them.
Even more instructive will be the approach that each department head takes in setting a 90 percent budget. Gov. Walter Peterson used to say it was easy to learn which agencies would cooperate in tight budget years, and which were simply trying to protect their turf. Some commissioners would fight for their programs while clearly listing which were the absolute top priorities. Others would offer to cut funds for the widows and orphans, knowing that neither the governor nor the Legislature would call their bluff.
You need to call the bluff of any commissioner claiming that a 10 percent cut would decimate their core programs and reward commissioners who give you honest budget priorities.
Your administration will be largely defined by the commissioners you’re inheriting from Gov. John Lynch. Health and Human Services Commissioner Nick Toumpas and Administrative Services Commissioner Linda Hodgdon were just reappointed, and you’ll face the voters before they’re up again. Toumpas oversees nearly half of state government, and Hodgdon will be implementing your directives across the rest. Get to know them better, as their performance over the next two years will largely determine your performance.
Other top state posts are vacant or about to expire. It will be up to you and the newly elected Executive Council to fill them. Your appointments to head Resources, Labor, Employment Security, and dozens of other important positions will be your first chance to reshape New Hampshire’s government.
While the budget will and should capture the bulk of your attention during the transition, and your first six weeks in office, it’s also important to put some early energy into solving one of New Hampshire’s toughest long-term challenges. The New Hampshire Retirement System is facing a nearly $5 billion unfunded liability as contributions from workers and employees, along with reasonable return on its investments, simply won’t be enough to pay for all the promises we’ve made.
The Josiah Bartlett Center believes that moving from our outdated defined benefit plan to a modern defined contribution plan would keep this liability from growing, put younger public employees in charge of their own pensions, and remove the temptation for politicians and unions to raid the retirement accounts in order to hand out additional benefits. But it’s important to note that despite some fear-mongering, pension reform would do nothing to either shrink or expand the unfunded liability we already face.
That fiscal mountain needs to be tackled by some combination of increased contributions from taxpayers and employees, transfers from other government revenues, or pie-in-the-sky assumptions on the performance of the stock market over the next two decades. Do not count on the stock market.
The voters of New Hampshire have done their job. Now it’s your turn.
(Grant Bosse is vice president for media for the Josiah Bartlett Center for Public Policy, a free-market think tank based in Concord.)