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Governor Offers Compromise Budget Plan

July 23, 2015 Common Cents

Earlier today, Governor Maggie Hassan put forward a new proposal in an attempt to reach a compromise over New Hampshire’s FY 2016-2017 budget.  The proposal appears to use the spending levels included in the version of the budget she had vetoed on June 25 as a starting point, but calls for additional funding for several key priorities, such as substance abuse treatment , travel and tourism promotion, higher education, and the previously agreed upon contract for state employees.

At the same time, the proposal would make numerous changes in tax policy, some of which would lower the amount of revenue collected during the FY16-17 biennium, others of which would increase it.  In particular, the proposal would reduce the rate of the business profits tax (BPT) to 7.9 percent, as sought by the legislature, but, rather than phasing the reduction in over time, would institute it in full beginning in tax year 2016.  The proposal also seems to account for further reductions in the amount of revenue the BPT yields arising from a possible future compromise on provisions included in HB 550 – often referred to as the “Planet Fitness tax break” – which the Governor vetoed earlier this week.  The proposal would not reduce the rate of the business enterprise tax (BET), as the legislature’s budget plan would do, but would instead raise the threshold at which businesses begin to owe the tax.

Conversely, the proposal would revive several of the tax policy recommendations included in the Governor’s original budget plan and intended to bolster state revenues.  These include an increase in the tobacco tax from $1.78 to $1.99 per pack, higher motor vehicle registration fees, and restoration of the requirement that taxpayers should be able to document deductions taken, as part of the BPT, for reasonable compensation.

While the Governor has championed the reauthorization of the New Hampshire Health Protection Program and included provisions in her original budget plan to make the program permanent, the proposal she offered today does not attempt to remove or modify the program’s current expiration date of December 31, 2016.  Rather, the proposal would provide new funds to permit additional data collection related to the program.

At present, both the House of Representatives and the Senate are next scheduled to meet on Wednesday, September 16, to consider possible veto overrides, including, presumably, those of HB 1 and HB 2.  In announcing her proposal, the Governor urged legislators to work towards a compromise plan that could be approved on that date.

 

 

 

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Business Taxes Sustain Surplus While Other Sources Fall Just Short

18 Jul 2018

tree with coins

The State revenue figures from June show continued strength in business taxes, but suggested that other revenue sources may be faltering, such as lottery and liquor sales revenues, or just meeting their targets. The data release for June showed the cash revenues for the last month of the State fiscal year from tax and non-tax revenue sources, as well as tallies for the entire year. Final, audited figures will not be available until December, but the cash figures suggest a substantial surplus for the fiscal year, both relative to the State revenue plan and to State fiscal year 2017.