Calls for the Governor to enter into open dialogue before Tuesday VoteManchester- Coburn challenges Lynch to come clean with taxpayers on the fictitious $300 million deficit and admit that under his watch we may actually be headed towards real deficit spending.
"John Lynch is continuing to misrepresent the truth by claiming he eliminated a $300 million deficit, when in fact he inherited the largest budget surplus in New Hampshire history of over $82 million", said Jim Coburn.
"Since John Lynch has not shown a willingness to make the tough choices and take the lead on controlling state spending, we seem to be headed straight for a deficit and the need for increased taxes. Thankfully for the taxpayers of New Hampshire, the Governor's budget didn't pass. His inflated revenue estimates would most certainly have had us staring down the barrel of a budget deficit today", continued Jim Coburn.
"John Lynch is not discussing honestly and openly that New Hampshire is headed in the wrong direction. We could, if these trends continue, shortly be headed for a deficit situation. I call for the Governor to honestly communicate our current budget situation to the voters before Tuesday's critical vote", concluded Coburn.
* John Lynch balanced his budget (that didn't pass) by inflating revenues by 300 million dollars.
On October 17th , the Ways & Means met to review revenues and it shows we are moving in the wrong direction. The following short falls of actual revenue receipts are compared to previous projections that were reported:
(Millions of $)
Meals & room tax -13.9
Liquor sales -1.9
Insurance tax -5.6
Communications tax -0.8
Estate & legacy tax -3.2
Real estate transfer tax -51.8
Court fines & fees -0.9
Utility tax -0.5
Tobacco settlement -11.2
Utility property tax -3.8
Total revenues are still above our estimates; however this is due mainly to higher than anticipated business taxes, which are $72.9 mil. over estimates. This is due in part to an amnesty granted by the federal government to large corporations that had foreign profits they were holding in other countries. They were allowed to bring these profits back to the U.S. and pay a tax of only 5% instead of the regular rate of up to 35%. This created the opportunity for N.H. to collect its share of the BPT. This is a one time event only.
The short falls in revenues may be signaling the beginning of an economic down turn. Of special concern is the decline in the real estate taxes.
Here is what has happened to the surplus:
Ed. Trust Fund
Est. surplus as of 10/17/06 $32.561 $4.200
Less: allocation to HHS on 7/11/06 -7.500 0.0
Less: May appropriations -14.924
Est. transfers to HHS -4.900
Est. biennium surplus 5.237
The last figures represent a surplus; there is a catch, administrative services estimates that we will need another $5 million this year for energy (heating, electricity and fuel for state vehicles) due to increased energy costs.
Also, there is $1 Mil. to 1.5 Mil. presently in the general fund that is interest on the state's self insurance fund. This money belongs back in the self insurance fund and will have to be transferred. There goes any surplus in the general fund.