With the House and Senate poised to begin negotiations over the FY 2014-2015 budget, the members of the House Ways & Means Committee today announced that they expect New Hampshire’s existing tax system to produce $107 million more over the coming biennium than they had initially estimated and $49 million more than Senate estimates.
At stake are the Senate’s proposed “back of the budget” cuts that, while not specified, would likely reduce funds available for critical human services and lead to the layoffs of potentially hundreds of state workers.
Should the conferees opt for the Senate’s revenue estimates, those “back of the budget” cuts are likely to remain in the final 2014-2015 spending plan. If the conferees decide that new evidence points towards more substantial growth, they may be able to mitigate those reductions.
All told, the House Ways and Means Committee now anticipates that the General and Education Funds will collect $4.60 billion during the FY 2014-15 period; this figure is about 2.4 percent more than what the Committee originally projected in February. The Committee’s revisions stem largely from updated information about the pace of collections for the current fiscal year. When the Committee originally compiled its estimates, it expected FY 2013 General and Education Fund revenue to amount to $2.19 billion; it now assumes it will reach $2.24 billion, a difference of roughly $52 million and a higher base on which to build estimates for 2014 and 2015.
By way of comparison, the Senate assumed General and Education Fund revenue, would amount to $4.55 billion for FY 2014-15 – or $49 million less than the new figures from House Ways and Means.
The differences between the two chambers now lie almost entirely in three sources of revenue: the state’s twin business taxes, the business profits and business enterprise taxes; the meals & rooms tax; and the real estate transfer tax. In each case, both the House and the Senate assume that collections for these sources will be relatively similar in FY 2013; however, the House predicts that each source will grow more rapidly over the course of the biennium.
Needless to say, reaching an agreement on projected revenues will be a critical element of conference committee negotiations.