NHDP Asks Attorney General to Launch Immediate Investigation into Failed CEO Walt Havenstein’s Multiple Campaign Finance Violations
The public has a right to know how much money state government spends
August 24, 2014
By Sen. Jeanie Forrester
One of the quirks of New Hampshire’s budget process is that we start writing next year’s budget before we elect the Governor and Legislators who will approve it. State departments are already crafting their spending requests for Fiscal Years 2016 and 2017. Unfortunately, they are doing so in the dark, without a clear picture of how the current budget is shaping up.
Fiscal Year 2014 ended on June 30th. We knew within a few days that state revenues came in right on target. In fact, the updated revenue figures released earlier this month show that General and Education Trust Fund revenues came in just $3.1 million over the conservative revenue estimates that Senate Republicans insisted on during the 2013 budget debate. That’s 0.1% over the $2.17 billion dollar forecast. Some taxes brought in more than we planned, and some dipped below our estimates, but the overall revenue plan hit the center of the bullseye last year.
That doesn’t guarantee that revenues will be as accurate this year, which runs through June 30, 2015. Republicans and Democrats in the House and Senate will all keep an eye on revenues throughout the year, aided by the Monthly Revenue Forecast, published the first week of every month by the New Hampshire Department of Administrative Services.
Unfortunately, we lack this important transparency on the spending side of the New Hampshire budget. The data is there, but Governor Hassan has so far refused to share it with the public. Governor Hassan has been warning since May that state departments might exceed the FY14 spending levels authorized in the current budget, and has reinstated a spending freeze on out-of-state travel, equipment purchases, and filling vacant state positions that expired last July.
But she has not shared the basis for this concern, or shared with the Legislature whether any state departments overspent their budgets last year. Since the close of FY14, Senate Republicans have been asking to examine the state’s spending records. We’ve formally requested Governor Hassan to provide a department by department update on FY14 spending to the Legislative Fiscal Committee, and she has refused. If we’re going to have the bipartisan cooperation that the Governor claims to value so highly, we all need to have up to date information.
New Hampshire law requires spending reports similar to the revenue reports we read each month.
RSA 9:11 Monthly Reports “Once each month the director, division of accounting services shall make a report to each state agency showing in detail the total amount expended during the previous month and the accumulated amount expended to date from July 1. The report shall also show the total encumbrances outstanding and the balance available for the remainder of the fiscal year.”
State law requires the Governor to know exactly how much each department spends every month. And it authorizes the Governor to reduce expenditures in any department in danger of going over budget.
We simply want to see the same information the Governor has. She keeps hinting that we’re going to have big budget problems, and insists there’s a problem with revenues. Well, we can see the revenues every month, and we know that’s not the problem.
But what about spending? Did any state agencies exceed their budget expenditures last year? Are any in danger of going over budget this year? The Governor insists that everything is fine. She could prove that very easily, and back up her claims of bipartisan problem solving, simply by sharing the monthly spending reports sent out to every state agency.
Passing a balanced budget is important but it’s only the beginning of a long process. Monitoring revenues to make sure we meet our estimates is important too. However the most important part of maintaining a balanced budget is managing department spending. Doing that in a transparent manner helps build trust that the government is being efficient with our tax dollars. Doing that in the dark – or worse, not managing spending and keeping the public in the dark – leads to suspicion, confusion, and potentially to budget deficits.
Sen. Jeanie Forrester (R-Meredith) is Chair of the Senate Finance Committee.
Concord, NH – Senate Majority Leader Jeb Bradley responded today to Governor Hassan’s claim that reductions in business taxes implemented in the current budget are “having a negative impact on the State Budget”, by asking the Governor if she wants to tax the Internet. The Legislature eliminated the Communications Services Tax on Internet Access. Bradley asked if Governor Hassan would repeal that bipartisan tax reform so that the Communications Services Tax would apply again to Internet Access.
“Like all of the recent reforms to New Hampshire’s business tax code, exempting Internet access from the Communications Services Tax passed with overwhelming bipartisan support, and it was included in the budget which Governor Hassan praised last year,” Bradley said. “If Governor Hassan really thinks that these tax reforms are causing problems, she has a duty to tell us specifically which ones she wants to repeal.”
Congress imposed a moratorium on Internet access taxes in 1998. Several years ago, the New Hampshire Department of Revenue Administration began applying the 1990 Communications Services Tax to Internet access without Legislative approval. Bipartisan majorities in the House and Senate stepped in to correct this bureaucratic overreach with HB 1418, by clarifying that Internet access was not taxable. In 2012, HB 1418 passed the Senate 23-0 and the House 244-46.
“These tax reforms such as blocking an Internet Access Tax were passed with bipartisan support to spur job creation. New Hampshire has performed poorly in economic growth compared to other states which is why the Legislature led on this issue. Does NH really want to reverse those job growth initiatives when our economy is growing by less than 1% annually?” Bradley concluded.
Rather than blaming job growth measures for potential funding budget shortfalls, Governor Hassan would be better served by providing an update on each departments spending levels for the fiscal year that concluded in July as well as projections on how large the budget deficit in the current fiscal year is likely to be. If indeed there is a $100 deficit looming as some predict, the sooner that information is provided to the Legislature and the public, will make addressing the deficit less painful.
CONCORD - Today Deputy House Republican Leader and member of the House Ways & Means Committee, David Hess (R-Hooksett), offered the following comments relative to Governor Hassan’s claim that business tax reforms passed during the previous legislative term, “are having a negative impact on the state's budget.”
Deputy House Republican Leader David Hess (R-Hooksett)
“Not even the Department of Revenue Administration is ready to attribute any change in business tax or interest and dividends tax revenue to any one or particular set of causes at this time. During several meetings in the month of August, DRA officials said it is currently impossible to tell if any prior legislative changes will have any effect on our overall fiscal balance.”
“The Governor has a solution in search of a problem. Her solution is to potentially make our business tax climate less favorable than it already is, or rely on revenue from a non-existent casino when a casino is not something we could even realistically propose for this budget cycle. This is not how to encourage long term economic growth, or responsibly address what experts suggest may be a temporary revenue anomaly.”
"What we can address immediately is state spending. Until we have an more accurate picture of how our state agencies are managing the resources we've allocated to them, I think hitting the panic button on revenue is premature."
Governor continues to blame revenues while hiding spending
Concord, NH – Senate Majority Leader Jeb Bradley (R-Wolfeboro) today called on Governor Maggie Hassan to specify which business taxes she wants to increase. Hassan has been warning of a potential budget deficit since May, but has refused to update the Legislature on state spending. FY14 revenues came in above the conservative forecasts insisted on by Senate Republicans, yet Hassan continues to claim that recent business tax reforms “are having a negative impact on the state's budget.”
“If Governor Hassan thinks New Hampshire’s business taxes are too low, she should tell us which ones she wants to increase,” Bradley said. “Does she want to start taxing trusts again? That would raise about $5 million a year. Does she want to reduce the Research and Development Tax Credit? She might want to roll back the Net Operating Loss Carry Forward provisions signed by Governor Lynch. the Or maybe she wants to lower the threshold for the Business Enterprise Tax so that New Hampshire’s smallest businesses will pay more.”
“These important business tax reforms had broad, bipartisan support, and were factored into the revenue estimates that proved so accurate for FY14,” Bradley continued. “If Governor Hassan wants to roll back these tax reforms, she should tell us which taxes she wants to increase. In the meantime, I would repeat our request to update the public on how much state departments spent in FY14, which ended 50 days ago.”
In 2011, the Legislature increased the filing threshold for the Business Enterprise Tax from $150,000 to $200,000, providing tax relief for New Hampshire’s smallest businesses.
In 2012, the Legislature voted 23-0 in the Senate and 312-18 in the House to override Governor Lynch’s veto of SB 326, exempting trusts from the Interest and Dividends Tax.
In 2012, the Legislature overwhelmingly approved HB 242, increasing the Net Operating Loss Carry Forward provision of the Business Profits Tax to $10,000,000.
In June of 2013, Hassan praised the “bipartisan, fiscally responsible balanced budget agreement” that included all of the tax provisions she’s now criticizing.