CONCORD, N.H. - New Hampshire Governor Maggie Hassan has issued an Executive Order to protect the state's budget. The governor plans on presenting the Executive Order to the Joint Legislative Fiscal Committee next week.
A press release says the order comes after there was a sudden drop in revenues in April. Under the order, Governor Hassan has frozen generally funded hiring, equipment, purchasing, and out-of-state travel.
“Last year, we came together, focused on our shared purpose and priorities, and enacted the most bipartisan budget in over a decade,” Governor Hassan said. “We must continue our bipartisan progress and work together in a fiscally responsible manner in order to ensure that we protect taxpayer dollars and the state’s budget.”
The Department of Revenue is continuing to investigate the sudden drops in revenue. The department believes the decreases to be related to a number of changes in the state tax code in recent years and businesses beginning to apply tax credits accrued during the recession.
Governor Hassan’s full letter to the Joint Legislative Fiscal Committee:
May 14, 2014
Representative Mary Jane Wallner, Chair
Joint Legislative Fiscal Committee
Legislative Office Building, Room 210-211
Concord, NH 03301
Dear Chairman Wallner:
I am writing to request that you reserve time on the agenda of the next Fiscal Committee meeting so that I may present an Executive Order directing a freeze in state hiring, equipment, purchasing, and out-of-state travel funded with general funds.
Through March of this year, the state was running approximately $25 million ahead of its conservative revenue plan. As I am sure you are aware, general and education fund unrestricted revenues, driven principally by shortfalls in revenues from business taxes and the interest and dividend tax, came in nearly $22 million below plan in April, reducing our cushion to just $3.9 million.
We built a conservative budget, estimating that in fiscal year 2014 business taxes would increase just $9.3 million, or 1.7 percent, over revenue collected in fiscal year 2013, and that interest and dividends taxes would grow by $3.1 million, or 3.3 percent over revenue received in fiscal year 2013.
While other revenue sources linked to the economy, including the real estate transfer tax and the meals and rentals tax, continue to perform above plan, the interest and dividends tax and business taxes dropped in April below collections during the same month of last year. The Department of Revenue Administration continues to analyze the reasons for these sudden drops in revenue. But the decreases appear to be related, at least in part, to a number of changes in the state tax code in recent years, as well as to businesses beginning to apply various tax credits and carry forwards accrued during the recession.
As New Hampshire’s employment and economic picture continue to improve, the Department of Revenue Administration will need further data and further analysis to determine whether this is a short-term drop or a long-term trend. But given the limited information, we should act prudently, responsibly, and expeditiously to continue to ensure a balanced budget for the biennium.
Therefore, in addition to the existing back-of-the-budget reduction to personnel, I will be presenting an Executive Order freezing hiring, out-of-state travel, equipment, and purchasing funded with general funds, except when agencies are granted a waiver. I would ask that the legislative and judicial branches take similar actions. As we further analyze revenues, I will be meeting with agencies to examine additional reductions, some of which may require legislative approval.
Last year, we came together, focused on our shared purpose and priorities, and enacted the most bipartisan budget in over a decade. We must continue our bipartisan progress and work together in a fiscally responsible manner in order to ensure that we protect taxpayer dollars and the state’s budget. We will continue to keep you updated as matters develop. Thank you for your assistance.
With every good wish,
Margaret Wood Hassan