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Report Gives NH Low Scores for Long-Term Budget Planning

When in pursuit of a complex goal, it’s important to select the right navigational tools. To stay on track, pilots follow flight plans, builders follow blueprints, and entrepreneurs follow strategic business plans. In setting their fiscal priorities – and in sticking to them – states can and should use a variety of policies to understand the future trajectories of tax and spending levels and to adapt should reality fail to meet expectations.

Unfortunately, New Hampshire is not taking full advantage of many available fiscal planning options. In fact, a study released today by the Center on Budget and Policy Priorities (CBPP) finds that 36 states do a better job than New Hampshire in ensuring that policymakers have accurate and reliable information available to them as they craft their respective budgets.

In Budgeting for the Future: Fiscal Planning Tools Can Show the Way, CBPP assigns each state a score of 0 to 10 based on the extent to which they use available tools to “chart their fiscal courses accurately and make corrections when needed.” New Hampshire received a score of just 4.5.

New Hampshire scores well in the study for:

  • its use of maintenance budgets to estimate how much it would cost to continue to provide the same level of public services from one biennium to the next;
  • the presence of a non-partisan fiscal agency, namely the Office of the Legislative Budget Assistant, to review budget proposals; and
  • the design of its rainy day fund.

On the other hand, the study notes that New Hampshire could substantially improve its fiscal planning by:

  • preparing multi-year forecasts of anticipated revenues and expenditures;
  • establishing a more formal process to arrive at a consensus on annual revenue projections; and
  • assessing more rigorously the costs associated with various tax expenditures.

Efforts are underway to remedy some of these shortcomings. For instance, HB 1531, sponsored by New Hampshire House Ways and Means Chair Susan Almy and currently under consideration in that cMap of States by CBPP Scoreommittee, would create both an obligation to assess tax expenditures on a regular basis and a mechanism for fulfilling that obligation. It would also expand the Department of Revenue Administration’s responsibilities in reporting on tax expenditures. In addition, Governor Hassan last year created, by executive order, a Consensus Revenue Estimating Panel to review revenue estimates and confirm their accuracy and reliability. (NHFPI’s Executive Director, Jeff McLynch, is a member of the Panel.) Still, as the CBPP study suggests, that panel could have an even more beneficial impact on the state budget process if, for instance, it included legislators from both chambers.

Ultimately, while there will naturally be disagreements about the size and shape of New Hampshire’s budget, few could dispute that policymakers should employ the best tools available to build it. CBPP’s report provides valuable insights into just which ones are missing from New Hampshire’s tool box.

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The Budget Trailer Bill Hits The Road

22 Feb 2017

tree with coins

On February 21, the Office of Legislative Budget Assistant published the public version of House Bill 2, also called the “Trailer Bill.” In this proposed legislation, Governor Sununu outlined the policy changes that enable some of the proposed modifications to State government indicated in the primary budget document, House Bill 1, released on February 9 to coincide with the Governor’s budget address. House Bill 2 will now be scrutinized by the Legislature and move through the process alongside House Bill 1, which allocates the funding to specific line items.