In a guest op-ed appearing in today’s Concord Monitor, Senator Dan Feltes and Chairman Susan Almy took pen to paper in another attempt to fool the taxpayers of New Hampshire.
Today marks the 61st day the State of New Hampshire is operating on a Continuing Resolution, a temporary legislative fix when budgets don’t become law. The budget, which would have started on July 1 if it became law, was vetoed by Governor Chris Sununu in June.
Gov. Chris Sununu has vetoed a two-year state budget crafted and passed by Democrats in the Legislature saying the plan threatens New Hampshre’s economic growth.
|NHPR
According to the Governor, the budget would have created a $100 million deficit per year for the next legislature. It also raised business taxes by 12.5% and added a slew of other new taxes and user fees.
For 61 days, Senator Feltes (also, gubernatorial candidate,) has been lying to the taxpayers about what the budget does, or doesn’t do. Today’s op-ed just extends that streak.
As anyone who has put together a family budget knows, budgets balance revenues with expenses. The same stands for our two-year state budget. Our revenues are based on estimates projected more than two years into the future. It is more of an art than a science, but it is a vital part of the state budget process.
Budgets balance revenues with expenses. Huh. Why did the Democrat written and passed budget create a $100 million annual deficit, then, even when the tax increases are taken into account. Yes, tax increases.
Also, anyone that actually crafts a family budget knows that you base your expenditures on your projected income, not the other way around. No family in their right mind says ‘here’s how much I want to spend, now let’s plan a way to make that much money.’
That deficit, of nearly 200 million dollars over the biennium, is based on projected revenues from June and earlier. Basically, the LBA and legislators guess how much the state will bring in via taxes and fees in order to craft the state budget. But, if the economy is slowing, which there is no significant data to back up that claim, then the projected deficit is actually much higher.
Unfortunately, now the economy is showing signs of serious weakness. The revenues coming in – across the board – are lower. And business tax revenues are significantly lower than estimated.
|Feltes & Almy
Yes, business tax revenues are lower than projected. Feltes & Almy explain why in their Op-Ed, and they’re largely correct, except for the shrinking economy part. Mostly, businesses have re-adjusted their payments based on the new tax rates that took effect on Jan 1, 2019. They’ve also stacked up un-used tax credits from prior cycles to cash in, which they’re now doing. Couple all that with the one-time repatriation revenue, and you get a slowing tax base.
If you look here – tax revenues this August Month-to-Date are actually higher than they were last August. Refunds are also higher, significantly. This results in a smaller net revenue number, but gross Business Tax Revenue is still increasing.
The Governor knew that the tax revenue wouldn’t expand as rapidly as it did in FY 18 & 19. His budget was carefully crafted to spend the one-time surplus on one-time projects, and not create an ongoing deficit for future legislators to battle. Responsible, reasoned, and well-thought out. Page 7 here shows that the Governor planned for slowing tax revenues based on run-off from the Tax Cuts and Jobs Act.
The Democrats, including Feltes and Almy, took that budget and added way too much. To make up for their increased spending, they tried to raise taxes on businesses, and add new taxes (capital gains, vaping, etc.)
The big picture is that the economy is slowing, state revenues will be less than estimated moving forward and the “surplus” is not what Gov. Sununu claims it is. We now know that we have less money to work with than originally forecasted.
|Feltes & Almy
Again, yes, state revenues are less than estimated, and may continue to be so. The surplus may even be reduced by what Feltes cites in his Op-Ed (extra refunds, etc.) This is even more proof that the Democrat crafted budget was irresponsible. It grew government, created a needless deficit, and imposed a huge hurdle for the next legislature to conquer. In short, it left little doubt that a broad-based tax (income or sales) would have to be implemented in the future.
For 61 days we’ve seen Feltes and his crew complain about the spending that got vetoed, just for him to turn around and complain about slowing revenues today. Senator Feltes wants to be your governor in 2021, but he doesn’t understand simple economics.
Time for the Senate and House to get back together and craft a budget that lives within it’s means.