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Strong April revenues put N.H. on track to finish fiscal 2013 with a surplus, not deficit

Last modified: 5/3/2013 12:59:04 PM
New Hampshire’s state government appears on track to finish the current fiscal year with a surplus instead of a deficit, boosted by stronger-than-expected revenue in April.

As of Tuesday, with two months remaining in fiscal 2013, the state had collected $33.8 million more in revenue than expected, the Department of Administrative Services announced yesterday. That’s a dramatic turnaround from just two months ago, when the state faced a $41.1 million shortfall.

“New Hampshire’s strengthening economy continues to improve our ability to address our fiscal challenges,” said Gov. Maggie Hassan in a statement, adding that the state “is now likely to close the current biennium with more revenue than planned.”

State taxes and fees generated $21.1 million more than expected last month for the general and education funds. Business taxes led the way by bringing in $92.5 million in April, $17.7 million more than had been expected.

“It’s wonderful news,” said Linda Hodgdon, commissioner of the Department of Administrative Services.

On top of that, the state last month collected one-time money for the general fund from legal settlements: $20.8 million from tobacco companies and $6.4 million from oil companies.

Whether the state ends up with a surplus or deficit at the end of June depends on spending as well as revenue. But, Hassan said, if the state does finish the year in the black, “we will have an important opportunity to strengthen New Hampshire’s rainy day fund, a responsible approach that will improve our short- and long-term fiscal situation.”

The rainy day fund currently contains $9.3 million.

In April, the state’s interest-and-dividends tax came in6.8 percent above plan, the meals-and-rooms tax came in 8.7 percent above plan, the business profits tax came in 15 percent above plan and the business enterprise tax brought in 38.1 percent more than expected.

Other taxes came in lower than expected, including the communications services tax, which was 45.1 percent below plan last month. Over the first 10 months of fiscal 2013, the tax on telephone and other services brought in $16.5 million less than expected.

And revenue from the Medicaid Enhancement Tax, a state levy on hospitals, is still $34 million below plan for the fiscal year, with no change last month.

Hassan, a Democrat, said yesterday that the strong April revenue numbers came despite “shortfalls in the last Legislature’s budget from unrealized Medicaid Enhancement Tax revenues, unbudgeted expenditures and projected savings that did not materialize.”

But Republicans pointed to the numbers as an endorsement of the budget passed in 2011 by the then-GOP-dominated Legislature.

“I am pleased that April’s revenue report shows the state is slightly above plan for the fiscal year and the current biennium, meaning we are collecting just enough tax revenue to fund government operations and no more – as the case should be,” said Sen. Bob Odell, a Lempster Republican and chairman of the Senate Ways and Means Committee, in a statement. “Additionally, today’s report confirms the Legislature’s process for estimating the state’s income works and that it need not be tinkered with for political expediency.”

(Ben Leubsdorf can be reached at 369-3307 or bleubsdorf@cmonitor.com or on Twitter @BenLeubsdorf.)


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