New Hampshire state budget

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New Hampshire state budget

Flag of New Hampshire.png
Budget calendar:  Biennial
Current fiscal year:  2015
State credit rating:  AA (as of 2014)
Current governor:  Maggie Hassan
Financial figures
GF expenses[1]:  $1.3 billion
All funds expenses:  $5 billion (FY 2013 estimate)
Spending % change:  Decrease.svg1.43%[2]
% from federal funding:  29%
State debt:  $18,425,567,000
Per capita state debt:  $13,951
Other state budgets
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Between fiscal year 2009 and fiscal year 2013, New Hampshire's total expenditures decreased by approximately $500 million, from $5.5 billion in 2009 to $5 billion in 2013. This represents a 9.1 percent decrease, below the cumulative rate of inflation during the same period (9.06 percent, calculated using the Consumer Price Indices for January 2009 and January 2013).[3][4]

This page contains information about budget processes and policy issues in New Hampshire, including:

  • a summary of the budget drafting process
  • trends in expenditures and revenues
  • current and past fiscal year budget developments
  • financial transparency measures

Budget process

The state operates on a biennial budget cycle. The sequence of key events in the budget process is as follows:[5][6]

  1. Budget instruction guidelines are sent to state agencies in August.
  2. State agencies submit their requests by October 1.
  3. Agency hearings and public hearings are held in November.
  4. The governor submits his or her proposed budget to the New Hampshire State Legislature by February 15.
  5. The legislature adopts a budget in May. A simple majority is required to pass a budget.
  6. The biennial budget cycle begins in July.

New Hampshire is one of only six states in which the governor cannot exercise line item veto authority.[6]

In New Hampshire, the governor is required by statute to submit a balanced budget. However, the legislature is not required by law to pass a balanced budget.[6]

Expenditures

Definitions

Although each state executes its budget process differently, the National Association of State Budget Officers (NASBO) breaks down state expenditures into four general categories. This allows for comparisons among the 50 states. NASBO's categories are as follows:[7]

  • General fund: "The predominant fund for financing a state’s operations. Revenues are received from broad-based state taxes. However, there are differences in how specific functions are financed from state to state."[7]
  • Other funds: "Expenditures from revenue sources that are restricted by law for particular governmental functions or activities. For example, a gasoline tax dedicated to a highway trust fund would appear in the “Other funds” column. For Medicaid, other state funds include provider taxes, fees, donations, assessments, and local funds."[7]
  • Federal funds: "Funds received directly from the federal government."[7]
  • Bonds: "Expenditures from the sale of bonds, generally for capital projects."[7]

2013 expenditures

Breakdown of expenditures in FY 2013.
Source: National Association of State Budget Officers

The table below breaks down expenditures for fiscal year 2013 (comparable figures from surrounding states are provided to give additional context).[7] Figures for all columns except "Per capita expenditures" are rendered in millions of dollars (for example, $2,448 translates to $2,448,000,000). Figures in the column labeled "Per capita expenditures" have not been abbreviated.

Total state expenditures, FY 2013 ($ in millions)[7]
State General fund Federal funds Other funds Bonds Total Per capita expenditures**
New Hampshire $1,262 $1,601 $2,080 $81 $5,024 $3,796.11
Maine $3,042 $2,564 $2,176 $16 $7,798 $5,870.65
Massachusetts $25,509 $15,548 $17,135 $2,106 $60,298 $9,009.35
Rhode Island $3,268 $2,659 $2,122 $84 $8,133 $7,734.58
Vermont $977 $1,662 $2,248 $73 $4,960 $7,915.36
**Per capita figures are calculated by taking the state's total expenditures and dividing by the number of state residents according to United States Census estimates.[8]
Source: National Association of State Budget Officers

Expenditures by function

Breakdown of expenditures by function in FY 2012.
Source: National Association of State Budget Officers

State expenditures in New Hampshire can be further broken down by function (elementary and secondary education, public assistance, etc.). Fiscal year 2012 data is included in the table below (information from neighboring states is provided for additional context). Figures are rendered as percents, indicating the share of the total budget spent per category.

Expenditures by function, FY 2012 (as percents)[7]
State Elementary and secondary ed. Higher ed. Public assistance Medicaid Corrections Transportation Other**
New Hampshire 23.5% 2.7% 1.9% 23.9% 2.1% 10.1% 35.9%
Maine 13.1% 3.4% 2.6% 28.8% 1.7% 8.6% 41.8%
Massachusetts 10.7% 9.3% 2.5% 20.7% 2.1% 6.2% 48.6%
Rhode Island 14.2% 13.2% 1.4% 25.0% 2.4% 6.5% 37.4%
Vermont 31.1% 1.8% 2.1% 25.3% 2.8% 12.8% 24.2%
Source: National Association of State Budget Officers
Note**: "Other" expenditures include "Children's Health Insurance Program (CHIP), institutional and community care for the mentally ill and developmentally disabled, public health programs, employer contributions to pensions and health benefits, economic development, environmental projects, state police, parks and recreation, housing and general aid to local governments."[7]

Expenditure trends

From 2008 to 2012, expenditures for elementary and secondary education and public assistance increased by 1.3 percentage points, a 5.9 percent increase in the share of the budget, and 0.3 percentage points, an 18.75 percent increase in the share of the budget, respectively. During that same time period, expenditures for higher education, Medicaid, corrections and transportation decreased. The table below details changes in expenditures from 2008 to 2012.[7][9][10][11][12] Figures are rendered as percents, indicating the share of the total budget spent per category.

Expenditures from 2008 to 2012 (as percents)
Year Elementary and secondary ed. Higher ed. Public assistance Medicaid Corrections Transportation Other**
2012 23.5% 2.7% 1.9% 23.9% 2.1% 10.1% 35.9%
2011 22.3% 4.0% 2.0% 25.7% 2.0% 9.5% 34.5%
2010 19.0% 5.0% 1.8% 24.9% 1.9% 9.2% 38.1%
2009 22.4% 5.2% 1.9% 26.5% 2.2% 10.8% 31.1%
2008 22.2% 5.0% 1.6% 26.0% 2.2% 11.3% 31.8%
Change in % 1.30% -2.30% 0.30% -2.10% -0.10% -1.20% 4.10%
Source: National Association of State Budget Officers
Note**: "Other" expenditures include "Children's Health Insurance Program (CHIP), institutional and community care for the mentally ill and developmentally disabled, public health programs, employer contributions to pensions and health benefits, economic development, environmental projects, state police, parks and recreation, housing and general aid to local governments."[7]

Revenues

2013 revenues

Breakdown of general fund revenue sources in FY 2013.
Source: National Association of State Budget Officers

The table below breaks down general fund revenues by source in fiscal year 2013 (comparable figures from surrounding states are also provided to give additional context).[7] Figures for all columns except "Per capita revenue" are rendered in millions of dollars (for example, $2,448 translates to $2,448,000,000). Figures in the column labeled "Per capita revenue" have not been abbreviated.

Revenue sources in the general fund, FY 2013 ($ in millions)[7]
State Sales tax Personal income tax Corporate income tax Gaming tax Other taxes and fees Total Per capita revenue**
New Hampshire $0 $0 $552 $3 $1,728 $2,283 $1,725.03
Maine $1,034 $1,495 $171 $0 $351 $3,051 $2,296.92
Massachusetts $5,164 $12,831 $1,822 $0 $7,352 $27,169 $4,059.42
Rhode Island $873 $1,075 $137 $1 $1,238 $3,324 $3,161.17
Vermont $231 $661 $95 $0 $302 $1,289 $2,057.04
**Per capita figures are calculated by taking the state's total revenues and dividing by the number of state residents according to United States Census estimates for 2013.[8]
Source: National Association of State Budget Officers

Revenue trends

The table below details the change in revenue sources in the general fund from 2009 to 2013.[7][9] Figures for all columns except "Per capita revenue" are rendered in millions of dollars (for example, $2,448 translates to $2,448,000,000). Figures in the column labeled "Per capita revenue" have not been abbreviated.

Revenue sources in the general fund, New Hampshire ($ in millions)[7][9]
Year Sales tax Personal income tax Corporate income tax Gaming tax Other taxes and fees Total Per capita revenue**
2013 $0 $0 $552 $3 $1,728 $2,283 $1,725.03
2012 $0 $0 $516 $4 $1,670 $2,190 $1,657.06
2011 $0 $0 $490 $1 $1,704 $2,195 $1,665.31
2010 $0 $0 $504 $3 $1,737 $2,244 $1,704.37
2009 $0 $0 $674 $3 $1,541 $2,218 $1,674.50
Change in % N/A N/A -18.10% 0.00% 12.13% 2.93% 3.02%
**Per capita figures are calculated by taking the state's total revenues and dividing by the number of state residents according to United States Census estimates.[8][13]
Source: National Association of State Budget Officers

State budgets by year

Fiscal years 2014 and 2015

DocumentIcon.jpg See budget bill: House Bill 1 and House Bill 2

New Hampshire state budget -- 2014
New Hampshire State Legislature
Text:House Bill 1 (this is only one of two bills that encompass the 2014-2015 biennial budget)
Legislative history
Introduced:February 27, 2013
House:April 3, 2013
Vote (lower house):194-172
Senate:June 6, 2013
Vote (upper house):13-11
Conference:June 26, 2013
Conference vote (upper house):24-0
Conference vote (lower house):337-18
Governor:Maggie Hassan
Signed:June 28, 2013

On February 14, 2013, Governor Maggie Hassan presented her proposed budget for the 2014-2015 biennium to the state legislature. The governor's proposed operating and capital budgets can be accessed here.[14]

Under her proposal, counting all state funds and federally financed programs, state spending would increase 10.2 percent, from nearly $10.1 billion to nearly $11.1 billion. General fund spending would increase by 7.1 percent, from more than $2.6 billion to nearly $2.8 billion.[14]

The governor's proposal presumed an increase of 2 percent in baseline revenue from state business and other taxes in fiscal year 2014 and 1.9 percent in fiscal year 2015. The governor also proposed casino gambling and an increase in the state's cigarette tax by $0.20 per pack to generate additional state revenue.[14]

Spending increases in the governor's proposed budget included:[14]

  • $40 million in fiscal year 2014 and $42 million in fiscal year 2015 for community colleges;
  • $75 million in fiscal year 2014 and $90 million in fiscal year 2015 for the state university system;
  • expansion of the state’s Medicaid program;
  • more money for mental health services; and
  • $38 million to build a new women’s prison.

Hassan signed the 2014-2015 biennial budget into law on June 28, 2013. It consisted of two bills: House Bill 1 and House Bill 2.[15]

Other budget years

See also: New Hampshire state budget (2012-2013) and New Hampshire state budget (2010-2011)

Historical spending

State budget historical spending below was compiled by the National Association of State Budget Officers. Figures reflect the reported "Total Expenditures" in Table 1. Figures for all columns are rendered in millions of dollars (for example, $2,448 translates to $2,448,000,000).[7][10]

Historical state budget spending in New Hampshire ($ in millions)
Fiscal year General Fund Other funds Federal funds Bonds Budget totals
Total % of Budget Total % of Budget Total % of Budget Total % of Budget
2011-2012 $1,280 25.7% $1,965 39.5% $1,650 33.2% $80 1.6% $4,975
2010-2011 $1,326 24.8% $1,940 36.3% $1,929 36.1% $145 2.7% $5,340
2009-2010 $1,380 25.2% $1,876 34.3% $2,074 37.9% $138 2.5% $5,468
Averages: $1,328.67 25% $1,927 37% $1,884.33 36% $121 2% $5,261
General Fund: The predominant fund for financing a state’s operations. Revenues are received from broad-based state taxes. However, there are differences in how specific functions are financed from state to state.
Other funds: Expenditures from revenue sources that are restricted by law for particular governmental functions or activities. For example, a gasoline tax dedicated to a highway trust fund would appear in the “Other funds” column. For Medicaid, other state funds include provider taxes, fees, donations, assessments, and local funds.
Federal funds: Funds received directly from the federal government.
Bonds: Expenditures from the sale of bonds, generally for capital projects.

State debt

According to a January 2014 report by the nonprofit organization State Budget Solutions, New Hampshire had a state debt of over $18 billion. Its state debt per capita was $13,951. The report revealed that state governments faced a combined $5.1 trillion in debt, 33 percent of annual gross state product. The obligation amounts to $16,178 per capita in the nation. A bulk of the state debt -- 79 percent -- was linked to unfunded public pensions.[16][17]

Total state debt in New Hampshire[18]
Type Totals U.S. rank
Total state debt $18,425,567,000 41
Per capita debt $13,951 27
State and other fund expenditures $3,245,000,000 9

Public pensions

See also: New Hampshire public pensions and New Hampshire public employee salaries

A 2012 report from the Pew Center on the States noted that New Hampshire’s pension system was funded at 59 percent at the close of fiscal year 2010, well below the 80 percent funding level experts recommend. Consequently, Pew designated the state's pension system as cause for "serious concern."[19]

Credit ratings

See also: State credit ratings

Credit rating agencies, such as Standard and Poor's, assign grades to states that take into account a state's ability to pay debts and the general health of the state's economy. Generally speaking, a higher credit rating indicates lower interest costs on the general obligation bonds states sometimes sell to investors in order to finance large-scale undertakings (e.g., road construction and other public works projects). This is turn results in lower interest costs, thereby lowering the cost to taxpayers.[20][21]

The table below lists the Standard and Poor's credit ratings for New Hampshire and surrounding states from 2004 to 2014. Standard and Poor's grades range from AAA, the highest available, to BBB, the lowest.[22]

State credit ratings, 2004 to 2014
State 2014 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004
New Hampshire AA AA AA AA AA AA AA AA AA AA AA
Maine AA AA AA AA AA AA AA AA AA- AA- AA
Massachusetts AA+ AA+ AA+ AA AA AA AA AA AA AA AA-
Rhode Island AA AA AA AA AA AA AA AA AA AA AA-
Vermont AA+ AA+ AA+ AA+ AA+ AA+ AA+ AA+ AA+ AA+ AA+
Source: Stateline: The Daily News Service of The Pew Charitable Trusts, "Infographic: S&P State Credit Ratings, 2001-2014," June 9, 2014.

Federal aid to state budget

See also: Federal aid to budgets in the 50 states

The chart below notes how much of the state’s general revenues come from the federal government. Figures were calculated by dividing each state’s federal intergovernmental revenue into its general revenue. The number in the rightmost column indicates the state's ranking in relation to the rest of the nation (e.g., if "1," the state receives the highest percentage of federal funding in the nation). Figures from neighboring states are included to provide additional context.[23]

State governments receive aid from the federal government to fund a variety of joint programs, such as Medicaid. Federal aid varies considerably from state to state. For example, Mississippi received approximately $7.7 billion in federal aid in 2012, which accounted for more than 45 percent of the state's general revenues. By contrast, Alaska received roughly $2.9 billion in federal aid in 2012, just under 20 percent of the state's general revenues.[23]

Federal aid to state budgets in 2012
State Federal aid as % of general revenue Total federal aid National rank
New Hampshire 29.00% $1,693,289,000 34
Maine 36.50% $2,883,526,000 10
Massachusetts 28.81% $12,920,153,000 36
Rhode Island 33.96% $2,310,656,000 23
Vermont 34.79% $1,904,382,000 18

Stimulus

According to Recovery.gov, the official government website for the Recovery Accountability and Transparency Board, under the American Recovery and Reinvestment Act, New Hampshire received $893.2 million in federal stimulus funding from the American Recovery and Reinvestment Act between February 2009 and June 2013.[24]

Budget transparency

Transparency evaluation
Transparent NH
Searchability Y
600px-Yes check.png
Grants Y
600px-Yes check.png
Contracts P
Partial.png
Line item expenditures Y
600px-Yes check.png
Dept./agency budgets Y
600px-Yes check.png
Public employee salaries Y
600px-Yes check.png
Last evaluated in 2010.
See also: Evaluation of New Hampshire state website and Constitutional provisions regarding reading of bills

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 categories and was searchable in both excel and PDF formats.

The site also included other important financial information, including budget information and revenue Reports.

In December 2010, the state launched Transparent New Hampshire, which shows sources of state money, how it was spent and an outline of the budget process, including links online to budget documents.[25]

Government tools

The table to the right is helpful in evaluating the level of transparency provided by Transparent New Hampshire.

Multi-measure budget transparency profile

The Institute of Government and Public Affairs at the University of Illinois created a multi-measure transparency profile for New Hampshire, which measured state transparency as of September 2011 using indicators from a range of organizations. These indicators measured both website transparency and other recognized facets of governmental transparency. In addition, IGPA presented four unique indicators of non-transparency based on the observation that transfers or reassignments between general and special funds can obscure the true fiscal condition of a state.[26][27]

IGPA devised a budget transparency index based on information available from the National Association of State Budget Officers. New Hampshire tied for 20th in the nation with 12 other states, earning five out of eight possible points.[27]

New Hampshire - IGPA score for budget process, contents and disclosure
Budget transparency indicator Yes or no?
Performance measures
{{{1}}}
"Generally Accepted Accounting Principles" budget N
600px-Red x.png
Multi-year forecasting N
600px-Red x.png
Annual cycle N
600px-Red x.png
Binding revenue forecast
{{{1}}}
Legislative revenue forecast
{{{1}}}
Nonpartisan staff
{{{1}}}
Constitution or statutory tax/spend limitations
{{{1}}}
TOTAL 5

In addition to the individual state profile, IGPA offers a 50-state comparison and profiles for other states.[27]

U.S. PIRG "Following the Money" report

See also: Following the Money 2014 Report

The U.S. Public Interest Research Group, a consumer-focused nonprofit organization based in Washington, D.C., released its annual report on state transparency websites in April 2014. The report, entitled "Following the Money," measured how transparent and accountable state websites are with regard to state government spending.[28] According to the report, New Hampshire received a grade of C+ and a numerical score of 75, indicating that New Hampshire was "middling" in terms of transparency regarding state spending.[28]

Accounting principles

See also: New Hampshire government accounting principles

The Office of Legislative Budget Assistant (LBA) was created in 1953 to conduct investigations, analyses and 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 are published online.

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 six 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.[29] New Hampshire's CAFRs were prepared and published online by the New Hampshire Department of Administrative Services, Division of Accounting.[30]

The Division of Accounting Services is headed by the State Comptroller and is divided into two bureaus:[31]

  • Bureau of Accounting
    • Responsible for developing, administering, and maintaining the state's integrated financial system (IFS) of governmental appropriation accounting and 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.

Contact information

Administrative Services Budget Office
State House Annex - Room 120
25 Capitol Street
Concord, NH 03301-6312
Phone: (603) 271-3204
Fax: (603) 271-6600

See also

External links

Additional reading

References

  1. Refers to General Fund spending. Typically in state budgets the General Fund is spending that is most directly controlled by state legislators.
  2. This figure is derived by calculating the percent difference between the prior two years' spending levels according to the National Association of State Budget Officers.
  3. Bureau of Labor Statistics, "CPI Detailed Report Data for February 2014," accessed April 9, 2014
  4. InflationData.com, "Cumulative Inflation Calculator," February 28, 2014
  5. National Conference of State Legislatures, "State Experiences with Annual and Biennial Budgeting," updated April 2011
  6. 6.0 6.1 6.2 National Association of State Budget Officers, "Budget Processes in the States, Summer 2008," accessed February 21, 2014
  7. 7.00 7.01 7.02 7.03 7.04 7.05 7.06 7.07 7.08 7.09 7.10 7.11 7.12 7.13 7.14 7.15 National Association of State Budget Officers "State Expenditure Report, 2011-2013," accessed February 21, 2014
  8. 8.0 8.1 8.2 United States Census Bureau, "Annual Estimates of the Resident Population: April 1, 2010 to July 1, 2013," accessed February 26, 2014
  9. 9.0 9.1 9.2 National Association of State Budget Officers, "State Expenditure Report, 2009-2011," accessed February 24, 2014
  10. 10.0 10.1 National Association of State Budget Officers, "State Expenditures Report, 2010-2012," accessed February 24, 2014
  11. National Association of State Budget Officers, "State Expenditure Report, 2009," accessed February 24, 2014
  12. National Association of State Budget Officers, "State Expenditure Report, 2008," accessed February 24, 2014
  13. United States Census Bureau, "Vintage 2009: Annual Population Estimates," accessed February 26, 2014
  14. 14.0 14.1 14.2 14.3 The Concord Monitor, "Hassan’s budget: A casino, more money for mental health and higher education, a new women’s prison," February 14, 2013
  15. New Hampshire Governor's Office, "Press Release: Governor Hassan Signs FY 14/15 Budget into Law," June 28, 2013
  16. State Budget Solutions, "State Budget Solutions' Fourth Annual State Debt Report," January 8, 2014
  17. Washington Examiner, "EXography: Unfunded public employee pensions drive state debts skyward," January 21, 2014
  18. State Budget Solutions "State Budget Solutions' Fourth Annual State Debt Report," January 8, 2014
  19. Pew Center on the States, "The Widening Gap Update,” accessed October 17, 2013
  20. Stateline: The Daily News Service of The Pew Charitable Trusts, "Infographic: S&P State Credit Ratings, 2001-2012," July 13, 2012
  21. Bankrate, "The 6 states with the worst credit ratings," September 27, 2012
  22. Stateline: The Daily News Service of The Pew Charitable Trusts, "Infographic: S&P State Credit Ratings, 2001-2014," June 9, 2014
  23. 23.0 23.1 United States Census Bureau, "State Government Finances: 2012," accessed February 24, 2014
  24. Recovery.gov, "Stimulus Spending by State," accessed February 21, 2014
  25. Boston.com, "NH launches new site on state revenue, spending," December 25, 2010
  26. Institute of Government and Public Affairs at University of Illinois, "Home page," accessed February 21, 2014
  27. 27.0 27.1 27.2 Institute of Government and Public Affairs at University of Illinois, "Budget Transparency Profiles - All 50 States," September 2011
  28. 28.0 28.1 U.S. Public Interest Research Group, "Following the Money 2014 Report," accessed April 15, 2014
  29. Institute for Truth in Accounting, “The Truth About Balanced Budgets—A Fifty State Study,” Page 35
  30. New Hampshire Department of Administrative Services, Division of Accounting Website, accessed October 31, 2009
  31. New Hampshire Department of Administrative Services, Division of Accounting Website, accessed October 31, 2009