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Grant Bosse

Grant Bosse: Hassan campaigns on consensus, governs on her own

One day, a farmer falls into his well and can’t climb out. He’s down there for hours before an economist walks by and hears the farmer screaming.

“Help me! Help me climb out of this well,” pleads the farmer.

“That’s easy enough,” answers the economist. “First, assume a ladder.”

New Hampshire has gotten into trouble in recent years by assuming things would work out for the best. It has relied on rosy revenue estimates to prop up large spending increases and been left with a huge budget hole when those revenues failed to materialize.

Twenty-seven states have tried to avoid the pitfalls of wishful thinking by forming bipartisan panels to estimate state revenues. These groups have made the tricky business of guessing how money will be available in the state budget less political and more accurate.

In September, Maggie Hassan announced that if elected governor, she would appoint a Consensus Revenue Estimating Panel, made up of economists, state agencies and legislators.

“As lawmakers, we can have differences, and we can have different priorities. But we need to be using the same facts. That’s an important way to break gridlock, so we can move the state forward,” Hassan pledged.

This week, Hassan attempted to fulfill her campaign promise, but fell far short.

The seven-member Consensus Revenue Estimating Panel she convened does nothing to break gridlock. It contains no Republicans, no conservative voices, and no members of the Legislature. It is a liberal echo-chamber vulnerable to the same group-think that led to New Hampshire’s budget disasters in 2007 and 2009.

The panel is dominated by members of Hassan’s administration, including Budget Director Gerard Murphy, Administrative Services Commissioner Linda Hodgdon, and Revenue Commissioner Kevin Clougherty. Community College Chancellor Ross Gittell, the state’s leading advocate for a broad-based sales tax, is also on the board.

The three private members of the panel are no more diverse. Dennis Delay and Jeff McLynch represent New Hampshire’s two left-of-center think tanks. Manchester Attorney Richard Samuels is there to represent the business community. He is also a Hassan campaign contributor and was the most prominent private-sector supporter of the short-lived LLC tax.

These are all smart people and good choices to serve on such a panel. But they are not balanced by anyone who sees the world, and the state’s economic future, any differently.

Economist Brian Gottlob of PolEcon has studied New Hampshire’s economy for over a decade and is well respected across the political spectrum. J. Scott Moody has done great work on New Hampshire’s shifting demographics. Charlie Arlinghaus has been warning against rosy revenue projections since the Legislature dug itself into a budget hole six years ago. His omission was notable, even to people who haven’t worked for him at the Josiah Bartlett Center.

There were plenty of worthy candidates had Hassan chosen to step outside the liberal bubble.

But Hassan’s biggest mistake was failing to include the Legislature. Former House Ways and Means Committee chairman Norm Major has been the lead number cruncher for House Republicans for years. His forecasts have been remarkably accurate and would have avoided the deficit spending of recent years had Democrats adopted them. Senate Ways and Means Committee Chairman Bob Odell heads up revenues in that chamber, and has always taken a cautious approach that leads to balanced budgets.

Democrats bemoaned Republican forecasts as overly pessimistic two years ago as they argued against steep spending cuts. Those estimates have turned out to be pretty accurate, if in fact a little too optimistic about cigarette tax collections and the Medicaid enhancement tax. Had we used the Democratic revenue estimates in the current budget, Hassan would be facing a much bigger budget problem today.

Excluding Major and Odell from any group claiming to seek consensus on state revenue is ridiculous. Neglecting to include anyone from the Legislature, Republican or Democrat, should lower expectations that Hassan’s panel will play any real role in the budget process.

Hassan needs to produce a budget proposal by Feb. 15. The law requires that her spending and revenue estimates be balanced. It does not require they be realistic.

Gov. Hassan is free to take budget advice from whomever she trusts. But she cannot credibly claim to be seeking consensus on revenue estimates when she populates her panel entirely from the political left. The Legislature would be wise to accept the data generated by Hassan’s panel and use it as one piece of a more balanced revenue forecast.

(Grant Bosse is editor of New Hampshire Watchdog, an independent news site dedicated to New Hampshire public policy.)

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