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Senate Uses Surplus to Balance Its Budget

June 3, 2013 Common Cents

Three Paths to Balancing the FY14-15 BudgetOn Thursday, the Senate votes on its version of New Hampshire’s FY 2014-2015 budget.  As recommended by the Senate Finance Committee, its budget would spend $4.59 billion in General and Education Funds over the next two years.  That sum is approximately $36 million higher than the House recommended in its version of the budget.

While that amounts to a difference of less than 1 percent, the way the two chambers arrived at those totals, as well as how they would finance their expenditures, will have to be resolved to get to a final budget before July 1.

On the income side of the ledger, the Senate anticipates that New Hampshire’s current tax system will produce more revenue over the next two years than the House initially projected in April. The Senate estimates General and Education Fund revenue at $4.54 billion during the FY14-15 biennium, while the House forecasts $4.49 billion.

However, the House proposal includes $64 million in additional revenue through suspending business tax breaks, increasing the tobacco tax rate, and other policy changes. The Senate, on the other hand, has included changes that, on net, would produce just $4.5 million in new revenue.  Consequently, the version of the budget the full Senate will consider will, in the aggregate, generate $6.7 million less in General and Education Funds than the one passed by the House.

As to expenditures, the Senate Finance Committee recommends initial General and Education Fund appropriations of $4.72 billion – some $61 million above the initial appropriations in the House’s budget.  The disparity is largely due to the Senate’s use of $20 million in General Funds to supplement uncompensated care payments to hospitals as well as its use of $19 million to supplant UNIQUE scholarship funds that had been directed to the University System’s budget.

The Senate’s plan then requires state department heads to make unspecified spending adjustments to bring actual expenditures down to $4.59 billion. Chief among those adjustments is a so-called “back of the budget” cut of $20 million in state personnel costs over the biennium.  Should the full Senate approve that change and other adjustments, its General and Education Fund net appropriations would only be $36 million above those found in the House’s version.

So, if the Senate Finance Committee’s budget blueprint generates less revenue, but appropriates more funds than the House’s corresponding plan, how does it reach balance?  The answer lies largely in FY 2013.

In compiling its revenue estimates, the Senate Ways & Means Committee was much more bullish on the current fiscal year than other forecasters. As a result, the Senate Finance Committee expects that the state will be able to carry $40.6 million forward from FY 2013 into the FY 2014-15 biennium. Neither the Governor’s nor the House’s versions of the budget assumed that the current fiscal year would end with a surplus.

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Elections Highlight Continuing Questions About Keno Revenue

8 Nov 2017

tree with coins

While results are still preliminary, Keno gaming appears to have been legalized in seven cities around New Hampshire as a result of Tuesday’s votes. The margin of victory in Rochester for Keno legalization was reportedly only one vote and may still be subject to change or recount, but voters appear to have legalized Keno gaming in Berlin, Claremont, Laconia, Manchester, Nashua, Rochester, and Somersworth. Voters in Concord, Dover, and Keene voted against Keno gaming legalization. Franklin had legalized Keno gaming previously, and the Portsmouth City Council decided to not put Keno on the ballot. Other municipalities, including the City of Lebanon, may make decisions regarding Keno legalization next year. These results have implications for State policy and finances.