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Early Impacts of the COVID-19 Crisis on State Revenues

September 9, 2020 State Tax Policy
New Hampshire State House

Funding for New Hampshire’s State Budget relies on revenues generated from economic activity, which has been severely curtailed by the COVID-19 crisis. These State revenues pay for key services for Granite Staters, including supports and assistance designed to help those facing financial hardship. With nearly half of New Hampshire households reporting a loss in employment income since mid-March, the need for State services intended to aid families with low incomes, as well as support for education and health services, has increased during the pandemic and will likely remain elevated into the next State Budget biennium.

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Business Tax Revenue and the State Budget

September 10, 2019 State Tax Policy
NH state quarters

The State Budget represents New Hampshire’s funding priorities for public investment in education, health care, public safety, housing, conservation and preservation, roads and bridges, and a range of services to Granite State residents and businesses. To support these investments, policymakers must determine methods for raising revenue and project the amount of revenue available over the two-year duration of the State Budget. Sustainable revenues are essential to help ensure that adequate funding is available to meet the needs of Granite Staters. The current revenue surplus provides an opportunity to make critical investments, but future business tax revenue will help determine the State’s ability to sustain those investments in the coming years.

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Funding the State Budget: Recent Trends in Business Taxes and Other Revenue Sources

May 22, 2019 State Tax Policy
NH state quarters

Understanding recent revenue trends is key to accurately projecting the amount of revenue expected over the next two State fiscal years and maintaining a balanced State Budget. Revenue projections are especially difficult to make accurately this year, given recent abnormal behavior in receipts from the State’s two primary business taxes, which have driven most revenue growth in recent years. These unusual trends have produced a significant revenue surplus, which presents an opportunity for making critical investments. However, understanding both the potential causal factors for the increases in business tax receipts and the trends in other revenue sources informs decisions concerning those investments and the fiscal support needed for them in the future.

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Updated Revenue Projections Suggest Much Smaller Budget Shortfall

30 Nov 2020

tree with coins

At a November 23 briefing, key New Hampshire State agencies provided updated revenue estimates to policymakers that revealed a much more optimistic revenue outlook than previous projections. With tax receipts performing well in the State fiscal year thus far, and agencies substantially underspending their budgets last year, the total budget shortfall may be much more manageable and put fewer programs at risk than previously anticipated. Policymakers may be able to offset much of any deficit with the Rainy Day Fund and support or expand programs and services for Granite Staters, who have seen their health and financial security put at risk during the pandemic.