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Garry Rayno's State House Dome: State revenue picture still unclear until later this year

July 05. 2014 8:01PM

Fiscal 2014 is history, but lawmakers will not know the true picture of the state's financial health until later this year.

Preliminary figures released last weak show state revenues on target for this fiscal year. However, the state has a two-year budget that has to balance, not yearly budgets.

Budget writers approved the biennial budget in June 2013 with the provision that fiscal 2014 would have a $26 million surplus to be used to balance next year's books.

If that is the case, based only on revenues, which constitute half the budget, the state may be facing a $20 million shortfall at the end of 2015 budget.

Spending is the other half, particularly whether state agencies can hit their targets for "lapses'' - money they are supposed to save each year.

The lapse issue is why Gov. Maggie Hassan last month issued an executive order, which lawmakers approved, freezing hiring, out-of-state travel and equipment purchases with state general fund money. She also talked about a special session later this year to approve budget cuts.

Even before the state's books closed Monday at midnight, rumors were floating around the Statehouse that June revenues were not looking good, to the tune of a $7 million to $9 million shortfall, which would mean revenues had missed their target by $8 million to $10 million.

As if to knock down the naysaying, Hassan issued a statement Tuesday saying revenues are about on target, with continued problems coming with the interest and dividends and businesses taxes, which were $22 million below estimates for April, precipitating the freeze on spending.

"June and fiscal year revenues appear close to on-target, driven primarily by a strengthening economy that has helped the meals and room tax and the real estate transfer tax make up for the underperformance in other areas," said Hassan. "We continue to see shortfalls in business taxes and the interest and dividend tax, which appear to be related, at least in part, to a number of changes in the state tax code in recent years, as well as to businesses beginning to apply various tax credits and carry forwards accrued during the recession."

She went on to call for bipartisan support for budget adjustments that may need to be made.

While Hassan's office put out her statement, it did not release any revenue numbers that would substantiate her assertions, although reporters asked for them.

Senate President Chuck Morse, R-Salem, also checked in Tuesday, noting revenues were on target, with the business enterprise tax showing growth that indicates the economy is improving and creating jobs. That was to counter Hassan's concerns about the business tax code changes Republicans had made during the 2011-12 session.

Morse instead hinted that state agencies may not be saving enough money to meet their lapses and asked Hassan's office to brief the Joint Legislative Fiscal Committee later this month.

"With revenues on plan, it is imperative that state agencies are meeting their spending and lapse figures to ensure the budget remains balanced and spending does not exceed the revenues we've collected," Morse said. "To that end, I am requesting that Fiscal Committee Chairman (Mary Jane) Wallner schedule a spending update from the governor's office for our next meeting to give us the opportunity to better evaluate the state's financial picture heading into the second year of the biennium."

The official numbers were released Wednesday showing June about $5 million ahead of estimates, which would mean revenues were about $5.8 million ahead of what budget writers predicted for fiscal 2014. No one will really have any idea of what the final tallies will look like for at least a couple of months, but the budget bickering has already stepped up a notch or two.

It's not hard to tell when it's an election year.

Bill Disclosure:

Looking for a story saying your favorite bill that passed this year is now law, but haven't been able to find it? Well there is a reason beyond the diminishing number of State House reporters and journalists in general.

Usually by this time in the second year of a two-year session, all approved bills are either signed or vetoed or allowed to go into law by the governor with the exception of a few stragglers.

This year more than 150 bills lawmakers passed have yet to go to the governor for her decisions.

Much has been made about Hassan's week-long trade mission to Turkey and that did impact some bills, but not many.

Some of the more significant bills passed this session such as the ban on the hand-held use of a cell phone or other electronic device while driving, the 10-tear highway plan, paycheck equity and including family pets and animals in domestic protective orders are either sitting on House Speaker Terie Norelli's or Morse's desk waiting to be signed.

Thursday more than 150 bills were on either desk that have yet to go to the Secretary of State's Office before they go to the governor who has five business days to make her decision.

Hassan had no bills and neither did the Secretary of State Thursday so the earliest possible movement will be Monday and that is not likely after a holiday weekend.

Among the delayed bills is House Bill 1360, which prohibits the hand-held use of cell phones or other electronic devices passed the House May 7 sending it to the enrolling process, which is one final look with legal eyes to make sure all the statutory references are correct, the I's are doted and t's crossed, and it does what lawmakers intend.

All the bills were through enrolling by the last full week of June and sent to either the House Speaker or Senate President to sign.

And that is where HB 1360 currently sits, although it passed both the House and Senate and Hassan has said she is probably going to sign it.

A similar situation exists for Senate Bill 253, which would allow the mother of a child conceived during a rape to terminate the perpetrator's parental rights.

House Bill 496, which establishes a program to allow a limited licenses for first time drunk driving offenders if they use an interlocking ignition device, House Bill 256 establishing a hike safe card program, and House Bill 1282 which restricts when heating fuel dealers can sell pre-buy contracts are all waiting to go to the governor.

Other bills include House Bill 1630 which overhauls the state's charity gaming laws, House Bill 2014, the 10-Year Highway Improvement Program, House Bill 1142 which would institute a tax on alternative motor fuels to make it comparable to the gas tax, and Senate Bill 120 which increases the reporting requirements for political action committees and groups seeking to influence elections.

Some of the bills are being held so ceremonies can be held this summer when they are signed.

The holdup is more likely the result of a split House and Senate, where Democrats control the House and Republicans the Senate.

In an election year, there is little reason to cooperate if there is mischief to be done and political points to score.

Gas Tax

Much has been made of the 4.2 cent increase in the gas tax that went into effect Tuesday, although it was difficult to see its effect as gas prices hardly moved and if they did it was near the end of the week with the July 4 Holiday and hundreds of thousands of tourists -- who could afford higher prices -- expected in the Granite State.

Raising the tax from 18 to 22.2 cents per gallon will produce an estimated $32 million a year in additional revenue or about $588 million over the next 20 years.

Although about half of the money is earmarked to pay bonds issued to finish the Interstate-93 expansion project from Salem to Manchester after the first two years, the remaining funds will not be enough to make up for what the state could lose in federal highway funds.

The past several years state highway officials have been concerned about the federal money and if they would receive all the state was promised and if the formula would be changed to further reduce the state's share.

But the partisan bickering in Washington is about to have a more immediate impact on the state because next month the federal highway fund is about to run dry later this month or in August without Congressional action.

While the state would continue to receive federal funding, it would be at a reduced level or what the federal gas tax could support, which is about 70 cents on the dollar.

Such a prospect could significantly slow down road and bridge work in the state at a time when the construction industry is just starting to rebound from some very lean years.


Former U.S. Sen. Bob Smith wants to mix it up with his two major challengers, Scott Brown and Jim Rubens, but has been stymied.

Smith's campaign released a statement saying "It is past time for the voters of New Hampshire to have the opportunity to differentiate between the three main candidates in the GOP Primary for U S Senate. There has been a lot of speculation and innuendo as to what each candidate stands for."

Smith renewed his challenge to Rubens and Brown to hold a series of Lincoln/Douglas style debates with the candidate able to directly debate each other on the issues.

"This is a direct challenge to Scott Brown! Jim Rubens has already agreed to these debates," the statement said. "The people of New Hampshire must be allowed to know as much about the candidates as possible in order to become an informed voter."

The Smith campaign wants Brown to respond by Monday, which is not likely to happen.

"Let's agree to do the right thing for the people of New Hampshire and allow them to see the strengths and weaknesses of all three candidates," the campaign said.

Maybe the candidates can hash it out on one at one of the many stops and parades they will participate in this holiday weekend.

First Responders Endorse

State Sen. Lou D'Allesandro, D-Manchester, was endorsed by the Professional Fire Fighters of New Hampshire and the Manchester's Patrolman's Association last week at the Central Fire Station in the Queen City.

D'Allesandro is running for his ninth term as the District 20 state Senator representing Manchester wards 3, 4, 10 and 11 and Goffstown.

"Senator D'Allesandro has always stood for fire fighters and for working families," said David Lang, President of the Professional Fire Fighters of New Hampshire. "His passionate commitment to a safer New Hampshire has never wavered. His strong voice continues to be a champion for fire fighters in Manchester and Goffstown, and all over New Hampshire."

D'Allesandro, who wears a pin with slain Manchester police Officer Michael Briggs badge number, was also backed by Manchester police.

"Senator D'Allesandro is an advocate for law enforcement and public safety at the State House in Concord as well as here in Manchester." said Ken Chamberlain, President of the Manchester Patrolman's Association. "He has always fought for legislation that would increase the safety of first responders and the general public."

D'Allesandro is unopposed in the September primary, but will face Republican Eileen Landies of Manchester in the November general election.

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