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Five Month State Revenues Are Just So-So

Even as the New Hampshire House and Senate met Wednesday to form for the upcoming legislative session, revenue numbers for the first five months of the current fiscal year are less than promising.

Be careful how you read these numbers because $48 million expected in Medicaid enhancement monies did not come in as planned last month, but much, if not all of those monies, should come in before the end of the year.

If we look at revenues minus that category, the state is $5.6 million ahead of plan, having taken in 602.7 million as opposed to $597.1 million planned.

That's within one percent of what Ways and Means projected two years ago, just about where we finished for the past fiscal year.

On the plus side, rooms and meals and real estate transfer taxes are up. 

Business tax revenues, by far the biggest contributor to state funds, are up slightly ($0.8 million), in at $153.5 million versus $152.7 million expected.

On the negative side, tobacco taxes, due completely to Bill O'Brien's ten cent a pack cut in the cigarette tax, are down as are liquor revenues and monies from the communications tax.

Tobacco is off $4.6 million, in at $91.7 million versus a projected $96.3 million.

Liquor monies are off $3.2 million, $57.8 million vs. $61.0 million planned.

The communications tax is off by the greatest percentage, off $6.1 million, in at $28.0 million vs. $34.1 million planned.  The explanation is simple.  Republicans, when in control, eliminated charges for Internet Access from the tax.  Democrat Susan Almy, once and future Ways and Means Chair, had warned that as more tax breaks were added, revenues would be down this year.

Of course, she was right.  It goes without saying.  Look for Democrats to find creative ways to get more monies out of certain taxes without actually raising them.

Rooms and meals are up $7.4 million, $121.6 million vs. $114.2 planned.  Real estate transfer revenues, while still say off their highs from five and six years ago, are edging up ahead of plan, in at $42.0 million vs. $38.1 million expected.

Lottery revenues are half a million ahead of the $24.0 million plan.

The November numbers, while not bad, are certainly not good either and must be seen as a cautionary sign for any Democrats hoping to restore monies from Republican cuts through revenue growth. 

Without fancy "tweaking", revenues are likely to be fairly flat for two more years which could mean that Hassanites are unable to add the $50 million back to the University system if at the same time, they want to add monies back to the most vulnerable in our society, those in the human services department.

As a Concord Monitor (no Republican paper there) editorial noted after the election, Governor Elect

If the Medicaid monies fail to come through, the state could face major problems.  For November, only $56.8 million was received; $104.8 million was expected, leaving a $48.0 million shortfall (temporarily?).

The gasoline tax was exactly on plan, bringing in $53.5 million for the five months.

While not bad, the five month numbers come as less than good news.  All indications are that revenues (unless significantly "tweaked") will not increase substantially the next two years.  Thus, Democrats will be hard pressed to add back monies cut by Republicans.  Revenues already serve as a cautionary tale that Hassanites will not be able to add a promised $50 million back to the University system if at the same time they want to boost monies for the most vulnerable in our society, health and welfare recipients. 

The November numbers come in as further proof of what the Concord Monitor (no Republican paper there) said in a post-election editorial that Governor Elect Maggie Hassan's numbers simply do not add up.

Time will tell, but bets are that (without increased betting), Democrats will have to take blame for either raising taxes and fees or coming up short with funding.  That's what happens when you win.

Yes indeed, elections have consequences.  You win, and problems fall in your lap.

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Reader Comments (1)

My bet is the current junta will raise budget by 8.5 percent, not so high as to hit the magic double digit, not so low as to de-energize their base of bloodsuckers.
– C. dog
December 6, 2012 | Unregistered CommenterC. dog

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