CONCORD — Shortfalls in business and interest and dividends taxes for July have Gov. Maggie Hassan asking state agencies to halt large expenditures.
July revenues for the first month of the 2015 fiscal year were $33 million less than a year ago, producing $98.4 million instead of $131.4 million for the 2014 fiscal year.
“Based on the trends we are seeing, I am asking the Consensus Revenue Estimating Panel to meet and provide updated Fiscal Year 2015 revenue estimates, an effort that I hope legislative Ways and Means members will bring their expertise to as well,” Hassan said. “As we recast our revenue estimates for 2015, I will be directing state agencies to put all potential large expenditures on hold, and the spending, out of state travel and hiring freezes that I enacted earlier this year will remain in effect.”
She said she will work with department heads to identify other steps to check spending, and she called on lawmakers to work across party lines to address the revenue trends and protect priorities.
Much of the decrease in July revenue — $28.9 million — is attributable to the tobacco tax. Last year a pending 10-cent increase spurred a large jump in the sale of tobacco stamps, $46.7 million compared to $17.8 million this year with no pending increase.
Business taxes were down $5.1 million this year, producing $17.5 million compared to $24.3 million last year.
According to the Department of Revenue Administration, the shortfall is due to a small number of taxpayers who made large July payments last year.
“Meals and rooms revenue and other key indicators remained strong in July, demonstrating that our economy continues to improve,” Hassan said. “However, shortfalls in revenues from business taxes and the interest and dividends tax make it increasingly clear that the changes made to the tax code by the last Legislature are having a negative impact on the state’s budget.”
The rooms and meals tax — the largest levy for July — produced $25.1 million, about $800,000 more than a year ago.
Other levies ahead of last year were the insurance, communications and real estate transfer taxes, as well as liquor revenues.
State budget officials have yet to develop the 2015, month-by-month revenue plan so July revenues can only be compared to July’s last fiscal year, according to Department of Administrative Services Commissioner Linda Hodgdon.
Preliminary work to adjust the spending and revenue for the 2014 fiscal year, shows state revenues produced $2.17 billion with a surplus of $3.1 million. An early report showed a $5.8 million surplus.
The two-year budget plan approved by lawmakers in June 2013 projected a $26 million surplus for the 2014 fiscal year in order to balance the budget at the end of the biennium June 30, 2015.
Since the budget was approved, settlements with hospitals over the Medicaid Enhancement Tax and mental health service recipients add to the state’s budget woes, but mostly for the next biennium.