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Crossing fingers: It is no match for budgeting cautiously

April 29. 2013 8:21PM

The fingers-crossed budgeting of Gov. Maggie Hassan looks worse and worse as we inch closer to the end of the fiscal year on June 30, while the so-called "extreme" budget of the last Legislature looks better and better.

Last week the state received an additional ?$15 million of tobacco settlement money. Based on current figures, that windfall wipes out the current-year deficit caused by hospitals withholding Medicaid Enhancement Tax payments. Earlier this year, the state projected ending the year with a deficit of $41 million. The New Hampshire Democratic Party blamed irresponsible budgeting by the previous Republican Legislature. But a funny thing happened on the way to that deficit.

State tax revenues started exceeding projections this spring. In March, business, insurance, interest and dividends and even tobacco tax revenue were all above projections, bringing in an extra $26.5 million. Suddenly the projected deficit was only $14.5 million. Then came the $15 million in tobacco settlement money.

The fiscal year is not over yet, but with only three months to go things look pretty good. The same cannot be said for Gov. Hassan's budget for next year.

To clarify her break from the budgeting practices of the last Legislature, Hassan pledged to "restore" a host of cuts. The revenue just was not there, but she proceeded with some of the restoration anyway. She attempted to pay for it by convincing the Legislature to authorize expanded gambling - and the $80 million in casino licensing fees that would come with it - but the more cautious House refused to go along.

The House, which sensibly authorized much less in spending than Hassan wanted, nonetheless counted on phantom money. Instead of the casino licensing fees, the House included the extra tobacco settlement money in its budget. That money now goes to this year's budget, blowing a relatively small hole in the House's spending plan for next year.

So here we are, a few months away from the start of the next fiscal year, and all eyes are turning to the Senate, which has to come up with a budget that, unlike the governor's or the House's, actually balances. The Republican-controlled Senate, readers might recall, was part of that "extreme" and "irresponsible" Legislature Democrats claimed the state had to run from. It's funny how political rhetoric can collide so harshly with political reality.

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