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August 12. 2014 9:46PM

Charles Arlinghaus: Why is the government hiding its problems from us?


 

The state budget is in shambles, but that information is not being shared publicly. To guess at the nature of the overspending and budget shortfall, we can only estimate using some incomplete public documents. This problem can be resolved by the quick release of information the executive branch has, but is not sharing. Longer term spending should be made transparent in a timely fashion in exactly the same way revenues are transparent.

For months now, Concord has been awash in rumors of a significant budget shortfall. The governor has already said she expects the state to spend more money than the budget allows. Despite what would ordinarily be seen as a crisis, no further or complete information has come out. Senators, including Senate President Chuck Morse and Finance Chairwoman Jeannie Forrester, have repeatedly asked for a spending update from the executive branch.

But such is political life in this day and age that — probably because the two senators are from the opposing party to the governor — that information is not being released. Suspicion and gamesmanship accompany every information request and guide too many decisions.

On the revenue side of the equation, politics is not involved. We know precisely how much money the state has collected from us. Each month, the state publishes and posts on the Internet a list of how much the various taxes raised, how it compares to last year, and how it compares to the budget itself. Budget watchers follow those numbers intensely.

But revenue tells us nothing if we don’t know what’s going on with its dance partner, spending. If we raise a little less but also spend a little less, everything is fine. If we raise a little less but spend a little more, that’s a problem.

What we know about state revenue is that the estimates were remarkably accurate. The state estimates as part of the budget how much it expects each tax to generate and then uses that estimate to budget spending. Overestimates are a nightmare. But this year the state collected one-tenth of 1 percent more than its estimate — the statistical equivalent of a bull’s eye.

That should be good news, but rumors of overspending worry any believer in fiscal responsibility. If there were monthly estimates of spending we would know now and would have known for months where things stand. State law requires those estimates to exist but not to be made public.

The state statute titled “Execution of the Budget” (RSA 9:11) requires accounting services to report to each state agency “once each month” the total amount spent that month and year-to-date. If there is a problem, the executive branch knows. That’s why the governor can predict overspending even though no public documents exist and nothing has been shared with the Legislature.

The law should be changed to require spending updates placed online, just as revenues are. In the meantime, we have a right to know if our budget is in crisis. Why is this information not being shared?

What we do know about the budget comes from the largest and most complicated department in state government. Because Health and Human Services accounts for about half the state budget, unique pressures are placed on it. One of its responses is to present regular updates even when the news is bad. The monthly “dashboard” is presented to the Legislature, full of statistical information and includes budget updates.

Commissioner Nick Toumpas should be applauded for his effort at transparency, but his dashboard is depressing budget news. Every year that department struggles to comply with service mandates, but also significant pressure to spend less money while reducing no service. Governors and legislatures routinely push decisions of what to cut over to the department: “I don’t want to cut anything, but you guys find an extra $40 million in cuts somewhere.”

The most recent dashboard predicts the department will end the final accounting having spent $30.9 million more than the budget in the fiscal year just ended and will be another $71.2 million overbudget for the current fiscal year. If these numbers — the only ones we have to go by — are correct, then half of the budget will be overspent by $102.1 million despite revenues being right on target.

If the hole is that big — and that’s a big hole — why have no steps been taken to curtail spending and eliminate the deficit? Why are we not being told anything yet? Problems don’t go away just because you hide them from the public.

Charles M. Arlinghaus is president of the Josiah Bartlett Center for Public Policy, a free-market think tank in Concord.


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