1 understanding and explaining the new hampshire state budget charlie arlinghaus, josiah bartlett...
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Understanding and Explaining The New Hampshire State Budget
Charlie Arlinghaus,
Josiah Bartlett Center for Public Policy
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New Hampshire Operating Budget
State Operating Budget
Federal Funds
Tax Revenues:•General Fund•Education Fund
Other funds:•Highway•Turnpike •Fish and Game •“Other Funds”
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New Hampshire State Budget
24 month budget 2 one year components Balanced Budget law July 1 – June 30 Fiscal Year Capital and Operating separate
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Balanced Budget Law
RSA 9:8-B Each fund must be balanced Expenditures for biennium balanced
by Estimated revenue Money remaining from prior biennium
Bonding (debt) prohibited for “operating expenditures”
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Education Trust Fund
Created in 1998 Response to Claremont case Transparency re: tax increases Not a real trust fund Transfers to and from General fund Statewide Property Tax Separate or Combined?
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General and Education Revenues
Combined to Balance as if one fund Diverse basket – 10 sources 81% FY 2010 - $1,980M (2343-363) Business combined $611M – 31% Meals and Rooms; Tobacco; Liquor;
Int/Div; RETT; Insurance; Communications, Lottery
Medicaid “enhancement”
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“Unrestricted revenue”: $1,853M(not including state property tax)
Business Taxes - $504 – 27% Meals and Rooms - $232 – 12.5% Tobacco - $244 – 13% Liquor - $120 – 6.5% I & D - $84.5– 4.5% Real Estate Transfer – $84.5 – 4.5% Insurance – $87 – 4.5% Communications - $80 – 4.3% Lottery - $66 – 3.5% Medicaid Enhancement - $118 – 6% Other: Court fees, securities revenue, utility taxes, beer
tax, utility state property tax, racing, tobac. settlement
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Spending (44%) Education: Trust fund ($958m) plus Just the general fund – 6 Categories
General Government - $324M – 21% Justice $227M – 15% Resources $41M – 3% Transportation $1M – 0.1% (highway,
turnpike funds) Health and Social $765M - 49% Education $201 – 13% (plus education fund)
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Spending (100%) The Six Categories (All Funds)
General Government - $555M – 10% Justice $691M – 12% Resources $344M – 8% Transportation $566M – 10% Health and Social $2087M - 36% Education $1502 – 26%
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This Fund and That Fund
Total $11.5 billion – 2 years General Fund - $3.2B* – 30% (was 31%) Federal Funds - $3.7 -32% (was 29%) Education Fund - $1.9B – 17% (was 17) Other “Other Funds” - $1.9B – 17% (15) Highway Fund - $627M – 5.4% (5.4) Turnpike Fund - $155M – 1.5% (1.5) Fish and Game - $27M – 0.2% (0.2)
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Employee costs
12,000 classified @ 45,800 Wages approx. $600M Benefits approx $250M Retirement approx $50M
$900M = 15% of annual costs
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Local Aid?
2009 – Education 1.017B 2010 – Education 1.026B
2009 – Municipal $125M 2010 – Municipal $93M
Combined is 45% of GF/ETF Spending
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Spending Trends
How to Measure – 2 yr? Biennial? Over Twenty years: General Fund – 4.5% annual Biennial increase ave. 8.7% GF + ETF 10 yr ave. – 2.55% Inflation 20 yr – 2.6% 1989 adjusted – 1,025,000
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Spending Growth 1989-2009
74%
154%
311%
0%
50%
100%
150%
200%
250%
300%
350%
Inflation General Fund GF + ETF
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23% equals $2.2 Billion Recent Growth – Two Biennia 01: 819M-1102M (+283) (+34%) 02: 845-1374M (+529) (+62%) 03: 440-658M (+218) (+22%) 04: 1085-1148M (+63) (+6%) 05: 3391-4263M (+872) (+26%) 06: 2758-3006M (+248) (+9%) Total: 9338-11549 (+2211)(+23%)
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How do we Balance?
Surplus Statement Budget minus lapses (net approp.) Unrestricted revenue Fund balance plus ETF surplus Two year total not each
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Rainy Day Fund
Revenue Stabilization Reserve Account
Surplus in, deficit out When does it rain? RSA 9:13-E Suspended last 2 budgets
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The New Legislature, 2011
October 1, 2010/ November 1 Tentative Budget - DAS Governor’s Address – February 15 6 weeks: House, Senate, Conference Starting point: $600-900M?
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“The Deficit”
General and Education Funds 2010-2011: $887M “One-time” FY2011 fast forward: $691M $176.8 x 2=$353.7 Plus $337.4 temporary $691 Million Assume zero tax, zero spend
(or+10.4)
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Mind the GapMind The Gap
4419
5058
4473
4369
4300
4400
4500
4600
4700
4800
4900
5000
5100
2006-07 2010-2011
Expenditures
Revenues
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Capital Budget and Debt
Operating v. Capital $239 M General Fund v. General Obligation Self-supporting Debt Issued offset by Debt retired Growth $644M to $823M (28% - 4 yr) Differing Opinions
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The $6.5 Billion Debt Mountain Pensions: 3.55B +? OPEB: $2.47 Billion Other Health: $496 million Judicial: $15.8 million
20 years ago – zero*
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Information where?
Monthly Revenue and Historical: http://admin.state.nh.us/accounting/reports.asp
Budget Document (LBA)http://www.gencourt.state.nh.us/lba/indexbudget.html
Treasurer: Bond Statement
http://www.nh.gov/treasury/Divisions/DM/DMdocs.htm