NH GOP Response to Lynch Address: On Fiscal Irresponsibility

In Today’s State Of The State Address, Lynch Called New Hampshire A “Fiscally Responsible State,” But Under His Watch It Has Been Anything But…

We’ve Seen Out Of Control Spending

The Spending In Lynch’s Budget Was $475 Million Higher Than The Last Biennial Budget. “Recession or no, the state wouldn't be $50 million or more in the hole if they didn't spend $475 million more in the 2008-09 budget than in the 2006-07 budget.” (Editorial,“The State Budget Hole; Just Blame Bush!,” Union Leader , January 20, 2008)

The Budget Increased Spending By 17.5%. “Although overall spending increases by 10.8 percent, spending of state revenues will increase by 17.5 percent.” (Tom Fahey, “$10.3 BillionState Budget Approved,” Union Leader ,June 28, 2007)

We’ve Seen Higher Taxes And Fees

Lynch’s Budget Contained “A Package Of Tax And Fee Increases.” “It took a package of tax and fee increases to balance a $10.3 billion budget for the next two years.” (Editorial, Foster’s Daily Democrat ,June 27, 2007)

Among Others, Lynch’s Budget Increased The Tobacco Tax And Car Registration Fees. “Both budget bills, the budget itself and a companion bill that raised the tobacco tax by 28 cents a pack, created a Land and Community Heritage Investment Program fee on registry of deed documents, raised car registration fees by $6 a year, and shifted nursing home costs entirely to counties, passed the Senate easily, 16-8. In the House, the budget itself passed, 211-146.” (Tom Fahey,“$10.3 Billion State Budget Approved,” Union Leader , June 28, 2007)

Lynch Has Also Hiked Tolls, And Is Scheduled To Hike Them Again. “The toll hike that acting DOT Commissioner Chuck O'Leary proposed last week matches the first phase laid out in the memo. Phase 1 raises tolls to $1 at Hooksett and Bedford on the F.E. Everett Turnpike, 75 cents at Dover and Rochester on the Spaulding Turnpike, and $1 at ramps in Hampton on I-95. That would bring turnpikes an extra $16 million a year, enough to cover $200 million in new turnpike bonds. The memo suggests other steps to raise another $46 million a year: a Hampton toll of $2 by mid to late 2009 (for a $25 million annual revenue bump) and all mainline tolls at $1 by 2010.” (Tom Fahey,“State House Dome: Tolls And Gas Taxes To Be Big Issues,” Union Leader , September 23, 2007)

We’ve Seen Rosy Revenue Projections That -- Coupled With Higher Spending -- Have A Created Budgetary Crisis

In His Address, Lynch Blamed A National Economic Downturn For His Current Revenue Shortfall. (John Lynch, State of the State Address, January 23, 2007)

However If This Were True, The Governor Should Have Seen It Coming Since National Economists Have Provided Ample Evidence Of A Slowdown:

Federal Reserve Chairman Ben Bernanke: “[T]he U.S.Economy Appears To Be Making A Transition From The Rapid Rate Of Expansion Experienced Over The Preceding Several Years To A More Sustainable Average Pace Of Growth.” (Ben Bernanke, Testimony Before the Committee on Banking, Housing, and Urban Affairs, U.S. Senate, February 14, 2007)

 “Economic growth in the United States has slowed in recent quarters, reflecting in part the economy’s transition from the rapid rate of expansion experienced over the preceding years to a more sustainable pace of growth. Real gross domestic product (GDP) rose at an annual rate of roughly 2 percent in the second half of 2006 and appears to be expanding at a similar rate early this year.” (Ben Bernanke, Testimony Before the Joint Economic Committee, U.S.Congress, March 28, 2007)


Business Week: “A Slower Pace Of Economic Growth.” “Small businesses are losing confidence as the economy continues to soften. A slower pace of economic growth in the U.S.is translating into reduced sales and income, which is likely to cause smaller businesses and entrepreneurs to reduce hiring and capital spending early in 2007.” (James Mehring, “Small Business: Just WhenHopes Were High”, Business Week ,January 8, 2007)

Business Week: “Profits Slowdown Already Appears To Have Started.” “Corporate profits have been on a tear for more than three years. . . .Get ready for a change. The profits slowdown already appears to have started, and margins are getting squeezed. For 2007,the combination of cooler demand and warmer labor costs will create a tough economic climate for earnings.” (James C. Cooper, “EarningsSeason Is About To Get Chilly,” BusinessWeek , April 16, 2007)

And We HAVEN’T Seen Spending Reports

In Lynch’s Budget Address Last Year, He Proposed Making State Expense Reports Publicly Available. “As a state, we receive monthly revenue reports and we continually debate revenue projections. But we need to do a better job of tracking expenses on a statewide basis. That is why I have asked Commissioner Hill to develop expense reports, similar to the revenue reports,which will be available for our review monthly.” (John Lynch, Budget Address, February 15, 2007)

Yet These Spending Updates Have Not Been Released. “To make matters worse, we have no idea where we are on spending. A year ago, the governor proposed monthly spending updates like the monthly revenue updates the state publishes. But one year later, no spending updates have been released and spending is still hidden from the public.” (Charles Arlinghaus, “We Face A Two-Year Budget Crisis, Not A $50 MillionProblem,” Union Leader, January 23, 2008)

Barney Keller

Press Secretary

NH Republican State Committee