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New Hampshire state budget (2010-2011)

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New Hampshire had a budget of $11.5 billion, including federal and other funds, for the two-year period that ended June 30, 2011.[1] The state received a wave of late tax payments from businesses that bumped the state's surplus for fiscal year 2010 to $63 million, the state announced on July 21, 2010. Gov. John Lynch had been estimating a surplus of $25 million.[2] Lawmakers made $150 million in budget cuts to state agencies and the judicial branch for FY 2010 because the surplus amount was unknown. The business tax payments did not change the size of the Rainy Day Fund, which was roughly $9 million, down from nearly $90 million when Lynch began his third two-year term in 2007.[2] Since 2006, New Hampshire's debt had increased by 30 percent, from $634 million to $823 million.[3]

As of July 2010, the state had a total state debt of $7,066,331,015, when calculated by adding the total outstanding debt, pension and OPEB UAAL’s, unemployment trust funds with the 2010 budget gap.[4]

2011 State spending & deficit in billions[5]
Total spending Pension Healthcare Education Welfare Protection Transport Debt
$6.9 $0.6 $1.5 $1. $0.9 $0.4 $0.6 $9.4
2011 Local spending & deficit in billions[5]
Total spending Pension Healthcare Education Welfare Protection Transport Deficit
$6.5 $0.0 $0.0 $2.5 $0.3 $0.7 $0.3 $3

Fiscal Year 2011

See also Archived New Hampshire state budgets

The state’s FY 2011 Comprehensive Annual Financial Report (CAFR) can be found here.

New Hampshire had a FY 2011 budget of $11.5 billion, including federal and other funds, for the two-year period that ends June 30, 2011.[1] On June 9, 2010, the New Hampshire House of Representatives in a one-day special session voted 177-167 to pass the supplemental budget measure, Special Session House Bill 1, which closed the state's projected $295 million budget gap using a combination of spending cuts, borrowing and potential state land sales.[1] The House and Senate had been at an impasse regarding the inclusion of gambling in the bill addressing the budget deficit, and the issue of gambling was removed and put in a separate bill.[1][6][7]


Four New Hampshire residents sued the state to restore $4 million to the Judicial Branch budget. As a result of the cuts, the judicial branch had to close one Friday per month and jury trials in civil cases were scaled back. Four state residents sued the state, asking that the funding be restored so that they could get prompt trials in their civil cases.[8] The case was filed in Merrimack Superior Court.

In addition to restoration of funding for the year, the suit requested an order that the state adequately fund the judicial the branch in the future.[9]

Federal Funds

New Hampshire received approximately $96 million from the federal government under [HR 1586, a $26 billion plan to give states money for Medicaid and education that the president signed into law on August 10, 2010.[10]

The state relied on $48 million in federal Medicaid assistance that had not been approved by Congress when making the budget but received only $29 million because the state's unemployment rate dropped to 5.9 percent.[11] States with higher unemployment rates received more federal money.[12] Federal education officials estimated the $41 million New Hampshire would receive in federal funds for education would save 700 teachers' jobs, but state education officials said that estimate was likely too high.[12]

The state also applied for bonds four months early, including $90 million in tax-exempt bonds and $60 million in Build America Bonds, which were authorized under the American Recovery and Reinvestment Act (ARRA).[13]

Passage of Budget

The state ended FY 2010 with a smaller deficit than had originally been projected, in part due to better than expected revenues in June 2010. However, the state had also relied on several large transfers between fiscal years that made the FY 2010 deficit look smaller than it actually was. One example of this was the shifting of over $80 million in federal stimulus money from FY 2011 to FY 2010. The American Recovery and Reinvestment Act sent $80,078,000 to New Hampshire in each year, but the budget credited the entire $160,156,000 to FY 2010.[11]

In the supplemental bill, the legislature offset the deficit with transfers from the state’s Rainy Day Fund and Education Trust Funds, which were scheduled to be returned in FY 2011.[11] Lawmakers approved non-budget cutting proposals to generate $40 million in savings by stretching out the state’s borrowing schedule and a $25 million payment from the University System of New Hampshire to support the same amount of state-backed bonds for maintenance upgrades on the campuses.[14] Gov. Lynch suggested that the state allow the University System to add $25 million to the Capital Budget in the coming year, and because the Capital Budget was separate from the General Fund, repayment of the $25 million loan would not be included when the state determined its deficit.[11]

It also included in revenue $60 million from the sale of state assets that had yet to be identified.[11]

The bill required state agencies to save $44 million by eliminating equipment purchases, leaving vacant jobs unfilled and restricting travel out of state, in addition to requiring agencies to make approximately $52 million in specific spending cuts.[1] Programs targeted for reductions included a land conservation program, schools with severely disabled students, energy efficiency measures funded by the state's regional greenhouse gas initiative, the judicial branch and payments to hospitals.[14][1] Additionally, Lynch asked that all departments trim their budget by five percent.[15]

In terms of raising funds, the budget fix bill raised tobacco taxes on products such as snuff but not on hand-wrapped cigars and cigarettes, and also froze a tax on insurance premiums at 1.25 percent instead of letting it drop to one percent in January. It also repealed the extension of a tax on investment interest and dividends to include the earnings of some owners of limited liability companies and partnerships.[1]

The New Hampshire Medical Malpractice Joint Underwriting Association was supposed to add $110 million for the budget, but it was blocked by legal action in July 2009. Superior Court Judge Kathleen McGuire sided with the policyholders, ruling that the state's claim to the malpractice money was unconstitutional. The case went to the New Hampshire Supreme Court.[16]

The state employee union rejected Gov. Lynch's plan of taking 19 unpaid furlough days to balance the budget after receiving two years of 10 percent salary raises. In October 2009, Gov. Lynch announced 250 layoffs of state workers to save $25 million after the union rejected the furlough plan.[17]

Budget background

See also: New Hampshire state budget and finances

New Hampshire does not have a state income tax.[18] New Hampshire operates on a biennium, covering two fiscal years at a time. A fiscal year begins on July 1 and ends on June 30 of the following year, however the biennium begins July 1 of odd-numbered years. According to the state Constitution, the Governor must pass a balanced budget and cannot carryover deficits.[19] Initially, individual state agencies submit their budget requests in the fall, prior to the Governor's completion of the recommended budget. At the beginning of the Legislative session the Governor presents a recommended budget to both the House and the Senate. Before the bill can be enacted into law the bill must pass both houses in the Legislature.[20]

Budget figures

The following table provides a history of New Hampshire's expenditures and gross domestic product (GDP).

Fiscal Year Expenditures (billions) GDP (billions)
2000 $6.2[21] $43.5[21]
2001 $6.6[21] $44.3[21]
2002 $7.1[21] $46.2[21]
2003 $7.7[21] $48.2[21]
2004 $8.3[21] $51.4[21]
2005 $8.7[21] $53.5[21]
2006 $9.0[21] $56.1[21]
2007 $9.4[21] $57.3[21]
2008 $9.8[21] $58.6[21]
2009 $10.2*[21] $60.0*[21]

Budget transparency

See also: Evaluation of New Hampshire state website

In June 2010, New Hampshire launched a new website to improve transparency in state spending and released the first monthly Governor's Expenditure Report on July 16, 2010 for the months of May and June 2010. The information was broken down by department, agency, and expense category and was searchable in both excel and PDF formats.

The site also included other important financial information, including budgetary information and revenue reports.

In December 2010, the state launched Transparent New Hampshire, which showed sources of state money, how it was spent and an outline of the budget process, including links to budget documents.[22]

Government tools

The following table was helpful in evaluating the level of transparency provided by a state spending and transparency database:

Criteria for evaluating spending databases
State Database Searchability Grants Contracts Line Item Expenditures Dept/Agency Budgets Public Employee Salary Exemption Level
None n/a n/a n/a n/a yes yes n/a

Economic stimulus transparency

New Hampshire received approximately $70 million from the federal government under H.R. 1586, a $26 billion plan to give states money for Medicaid and education that the president signed into law on August 10, 2010. The state received $29 million for Medicaid and $41 million for education.[12]

New Hampshire received an estimated $592,154,447 from the American Recovery and Reinvestment Plan of 2009.[23] Of that, $359 million of it was stimulus money that went towards operational costs for the state instead of one time projects.[24] $44.4 million of the stimulus funds went toward New Hampshire developing a broadband network to rival private sector companies.[25]

The Office of Economic Stimulus claimed that the stimulus money created 8,303 jobs. An additional 361 jobs were saved or created through direct grants to colleges, health centers and other agencies that the state did not control.[26]

Accounting principles

See also: New Hampshire government accounting principles

The Office of Legislative Budget Assistant (LBA) was created in 1953 to conduct investigations, analyses or research into the financial activities of New Hampshire State government entities. Pursuant to RSA 14:31, the Office consists of two divisions, the Audit Division and the Budget Division. The legislative budget assistant is appointed by the joint legislative fiscal committee prior to the beginning of each regular session of the legislature and is responsible for the proper execution of the respective functions of the audit and budget divisions. The LBA's audit reports can be found here.

The Institute for Truth in Accounting (IFTA) rates New Hampshire “tardy” in filing the state’s Comprehensive Annual Financial Report (CAFR) – the annual report of state and local governmental entities. IFTA rated 22 states timely, 22 states tardy, and 6 states as worst. IFTA did not consider New Hampshire's CAFRs, and those of the other states, to be accurate representations of the state’s financial condition because the Generally Accepted Accounting Principles (GAAP) basis did not include significant liabilities for the pension plans and for other post employment benefits, such as health care.[27] New Hampshire's CAFRs were prepared and published online by the New Hampshire Department of Administrative Services, Division of Accounting.[28]

The Division of Accounting Services is headed by the State Comptroller and is divided into two bureaus:[29]

  • Bureau of Accounting
    • Responsible for developing, administering and maintaining the state's integrated financial system (IFS) of governmental appropriation accounting and the state's payroll.
  • Bureau of Financial Reporting
    • Monthly Revenue Focus - the State's Monthly Unrestricted Revenue Report.
    • Annual Reports - the state's Annual Report to the Citizens, Comprehensive Annual Financial Report, the Supplemental Budgetary Financial Data Report, and the State Owned Real Property Report.
    • Interim Reports - Unrestricted Revenue Financial Review, Monthly Fund Appropriation and Undesignated Fund Balance, 10 year Trend and other special reports as requested.
Credit Rating Fitch Moody's S&P
New Hampshire[30] AA Aa2 AA

Economic Stimulus Package

New Hampshire was expected to receive $750 million from the $787 billion dollar economic stimulus.[31] All told, the federal stimulus plan was supposed to create or save 16,000 jobs in New Hampshire, based on White House estimates.[32]

New Hampshire established a website to provide information on how the federal stimulus funds were being used in the state.[33]

According to preliminary reports, New Hampshire was expected to receive:[34]

  • $258.3 million for education
  • $250 million in Medicaid funding
  • $129.4 million for transportation
  • $47 million for special education
  • $200 million for state stabilization funding

See also

New Hampshire government sector lobbying New Hampshire state budget and finances New Hampshire public pensions

External links

Additional reading


  1. 1.0 1.1 1.2 1.3 1.4 1.5 1.6 Business Week, "New Hampshire House passes $295M budget fix," June 9, 2010
  2. 2.0 2.1 Nashua Telegraph, "Late tax payments boost NH surplus," July 22, 2010
  3. Watchdog, "New Hampshire debt climbs 30% in five years," August 24, 2010
  4. State Budget Solutions, “States Hide Trillions in Debt,” July 22, 2010
  5. 5.0 5.1 USA Spending, State Guesstimated* Government Spending
  6. New Hampshire Watchdog, "NH budget expert: spend less to fix budget mess," December 23, 2010
  7. New Hampshire General Court, "Special Session House Bill 1"
  8. The Boston Herald, "Four NH residents sue state over court budget cuts," October 1, 2010
  9. The Nashua Telegraph, "Residents sue NH to restore $4m in court budget cuts," September 29, 2010
  10. Federal Fund Information for States, “ARRA FMAP Extension & Education Jobs Fund Totals,” August 11, 2010
  11. 11.0 11.1 11.2 11.3 11.4 New Hampshire Watchdog, "New Hampshire masks large budget hole," July 1, 2010
  12. 12.0 12.1 12.2 Businessweek, "Unclear if NH schools would get federal jobs funds," August 14, 2010
  13. New Hampshire Watchdog, "New Hampshire borrowing $150 million for capital projects this week," August 23, 2010
  14. 14.0 14.1 The Nashua Telegraph, "Lynch OK's plan to erase deficit," June 11, 2010
  15. New Hampshire Watchdog, "Lynch orders 5 percent cuts for next two years," July 14, 2010
  16. Insurance Journal, "New Hampshire Argues Claim to $110M Malpractice Fund," October 15, 2009
  17. Concord Monitor, "NH gov explains layoffs in letter to supporters," October 20, 2009
  18., "Which states had no income tax," accessed October 31, 2009
  19. INPUT, "State Budget Process Tutorial," accessed April 15, 2009
  20. State of New Hampshire, "Annual Financial Reports," accessed April 15, 2009
  21. 21.00 21.01 21.02 21.03 21.04 21.05 21.06 21.07 21.08 21.09 21.10 21.11 21.12 21.13 21.14 21.15 21.16 21.17 21.18 21.19 US Government Spending, "New Hampshire State and Local spending," accessed April 15, 2009
  22., "NH launches new site on state revenue, spending," December 25, 2010
  23. Wall Street Journal, "Stimulus Spending by State," April 9, 2009
  24. New Hampshire Watchdog, "The Federal Stimulus program was a threat to state finances," August 4, 2010
  25. New Hampshire Watchdog, "NH broadband gets $44.4m stimulus boost," July 2, 2010
  26. New Hampshire Watchdog, "NH share of stimulus money nearly $1 billion so far," August 18, 2010
  27. Institute for Truth in Accounting, “The Truth About Balanced Budgets—A Fifty State Study,” Page 35
  28. New Hampshire Department of Administrative Services, Division of Accounting Website, accessed October 31, 2009
  29. New Hampshire Department of Administrative Services, Division of Accounting Website, accessed October 31, 2009
  30. State of Indiana, “State Credit Ratings," June 24, 2009
  31. Associated Press, "Lynch: Use NH stimulus funds carefully," April 8, 2009
  32. American Recovery and Reinvestment Act, "Impact," accessed April 15, 2009
  33. New Hampshire Economic Recovery website
  34. New Hampshire Union Leader, "Stimulus: How NH stacks up," April 7, 2009