Manchester Mayor Guinta expresses grave concerns over Gov. Lynch's budget proposal and its effect on Manchester; municipalities

MANCHESTER (February 11, 2009) – Manchester Mayor Frank Guinta, who was attendance at Gov. John Lynch’s budget address, expressed grave concerns that the down-shifting of the state’s financial problems are being laid on the backs of local taxpayers. According to the city’s Finance Officer, the state budget proposed by Lynch would take nearly $10 million in revenues away the city’s upcoming Fiscal Year 2010 budget and would leave an additional hole the city’s FY09 budget of about $2.4 million.


“Governor Lynch’s budget address left me deeply concerned on how this decision to down-shift the budget crisis onto the backs of local taxpayers will play out,” Mayor Guinta said. “The state is asking us to put our faith in as-yet-unknown one-time stimulus funds from the federal government in exchange for guaranteed and perennial revenues.”


In his budget address, Gov. Lynch stated that he was suspending revenue sharing and rooms and meals funds for municipalities, and is underfunding the state’s portion of the retirement fund for police, fire fighters and teachers. In FY09, the city’s rooms and meals tax revenues were $4.8 million; while revenue sharing, which are funds that the state gives to communities as part of the business taxes it collects, were $3.9 million. Also in FY09, the state contributed $2.3 million to city employees and $2.2 million to Manchester School District employees. In Lynch’s plan, Manchester would have to contribute an additional $600,000.


The budget proposal also reduces city revenues for FY09 because the amounts expected to be received in September and December 2009 from revenue sharing as well as rooms and meals are applicable to the 2009 budget year. The expected revenue deficit the city would face directly attributable to Governor’s budget plan would be approximately $2.4 million.


This budget proposal also asks communities to forego the aforementioned guaranteed revenues for promised, but yet unrealized federal stimulus money. Mayor Guinta was committed to balancing the city budget without the expectation of new state or federal stimulus money.


“This plan asks the municipalities to take upon risk that the governor himself is not willing to take for state government,” Guinta said. “If Gov. Lynch is so confident in New Hampshire receiving stimulus funds, then he should apply them toward the state budget and leave the current distribution formula alone.”


Mayor Guinta has contacted Gov. Lynch’s office and asked to meet with him at his earliest convenience. This meeting would be to discuss the ramifications of this budget on Manchester and the other communities in New Hampshire.


City Budget 09-10

State Budget 09-10