O'Brien: Debt crisis will trickle down

Last modified: 7/29/2011 12:00:00 AM
House Speaker William O'Brien said yesterday that New Hampshire lawmakers will have to raise taxes or further pare government if federal debt talks lead to a decline in federal funding to the state.

Speaking during a roundtable discussion about the debt crisis that featured former New York governor George Pataki, O'Brien, a Republican from Mont Vernon, said states should expect less money to flow their way as federal policymakers look for ways to reduce the deficit. With more than half the state budget coming from federal spending, the speaker said, New Hampshire will see more of the spending decisions that dominated this year's budget season.

"If any of us takes any lesson or any understanding of what's going on in Washington now, it has to be that over the upcoming years Washington has to spend less, and that means there's going to be less support of state spending," O'Brien said. "And New Hampshire's going to have to have a continuation of the debate that started this term where we were able to reduce state spending."

He cited figures from the nonpartisan Office of the Legislative Budget Assistant showing lawmakers approved a budget that by one measure spends nearly 18 percent less from state taxes and nearly 11 percent less overall.

"We're going to have to say in the future, 'Are we going in that direction further or do we want to start taxing our citizens to replace federal spending?' " O'Brien said.

The budget includes $2.5 billion raised from state taxes and $3.15 billion in federal funding, along with other sources of revenue, according to the Legislative Budget Assistant.

Even more concerning than the debt itself, O'Brien said, are future financial liabilities the state has incurred. He credited lawmakers for passing legislation this year reforming the pension system for public workers. But he said the state in coming years could face crippling bills for public education and Medicaid.

The roundtable yesterday was held at the New Hampshire Institute of Politics at Saint Anselm College. Pataki spent the second of two days in New Hampshire talking about the debt.

In an interview afterward, O'Brien said he did not anticipate supporting any increase in taxes if federal funding drops. He said lawmakers should make government more efficient and focus on core functions.

(Karen Langley can be reached at 369-3316 or klangley@cmonitor.com.)

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