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Senate Budget Decisions May Limit Revenue Flexibility in Future Years

June 1, 2017 News

FOR IMMEDIATE RELEASE
June 1, 2017

 

Senate Budget Decisions May Limit Revenue Flexibility in Future Years

 

Concord, NH – The New Hampshire Senate passed its version of the state budget on May 31, putting forward an $11.86 billion spending plan for the 2018 and 2019 biennium, which begins July 1. The Senate budget increases funding for a number of critical needs, but also includes policy decisions that may limit available revenue for future budgets.

“In a strong economy, we should invest in areas that will enhance opportunity for all Granite Staters, such as supporting early childhood development, expanding education and training to support current and future workforce needs, and maintaining schools, roads, and other public infrastructure,” said John Shea, executive director of the New Hampshire Fiscal Policy Institute.

“New Hampshire is facing some significant challenges, among them a rapidly aging population and a need to attract young residents to the state,” added Shea. “The state budget should address our current needs and make investments that will produce lasting benefits and lay a solid foundation for the future.”

The budget includes two decisions that may limit options for funding state services in future years.

Proposed business tax changes include further reductions to the Business Enterprise Tax (BET) and Business Profits Tax. The proposal comes as additional business tax cuts, which became law in 2015, are still being phased in. Among the changes, the BET contribution to the General Fund would be gradually reduced starting in 2019 and eliminated entirely by 2021; this change would decrease revenue allocated to the General Fund, which is the fund that provides policymakers with the most flexibility to direct funding, permitting them to meet needs and respond to economic challenges or fiscal crises. In state fiscal year 2015, the last fiscal year without a BET rate change, the BET contributed $71.9 million to the General Fund.

The Senate budget assumes a greater decline in Medicaid enrollment than the Department of Health and Human Services recommends and may lead to a funding shortfall in future budgets. During the current 2017 legislative session, state policymakers were forced to find an additional $33.2 million to fill a shortfall resulting from a similar decision made several years ago.

NHFPI has published initial analyses of the Senate Finance Committee’s proposed budget and the proposed BET changes, as well as a review of the revenue sources that support the state budget. These and related resources are available at the NHFPI website NH State Budget page.

The New Hampshire Fiscal Policy Institute is an independent nonprofit organization dedicated to exploring, developing, and promoting public policies that foster economic opportunity and prosperity for all New Hampshire residents, with an emphasis on low- and moderate-income families and individuals. Learn more at www.nhfpi.org.

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New Data Show Food Insecurity Levels Declining Prior to the COVID-19 Crisis

10 Sep 2020

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According to data released on September 9 by the United States Department of Agriculture, food insecurity levels in New Hampshire continued to decline during 2019, prior to the onset of the ongoing COVID-19 crisis. The report outlines the trends of reduced food insecurity in the nation and in New Hampshire, declining from the higher levels resulting from the Great Recession of 2007 to 2009. The overall improvements to the state economy through 2019, along with the effectiveness of key nutritional aid programs, did contribute to lower levels of food insecurity, although the benefits of the economic recovery did not reach all Granite Staters in an equal or timely manner. Although food insecurity levels declined through the years preceding 2020, the current crisis facing Granite Staters is not reflected in these 2019 data. The recent economic pressures on many individuals and families with lower incomes in New Hampshire have been severe, and current levels of food insecurity are very likely to be substantially higher.