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Our friend Charlie Arlinghaus of the
Josiah Bartlett Center for Public Policy is once again sounding the alarm over the financial state of affairs here in the Granite State. One can only hope that the current crop of "leaders" and legislators will take this information to heart and make the necessary steps needed to correct the looming problem. Hopefully that won’t mean reaching further into our wallets…
Revenue on Track for $75 Million Shortfall
By Charles M. Arlinghaus
New Hampshire State revenues are currently on a track to produce a shortfall of more than $75 million in the fiscal year ending June 2008. That shortfall could be reduced by a strong economic performance over the next months but will likely grow larger as corporate profits growth slows after the explosive growth of recent years.
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A revenue shortfall is more damaging even than it seems because of the way the New Hampshire budget is put together. Revenue has always been estimated somewhat cautiously to provide a cushion in case spending is somewhat higher than expected or the economy doesn’t look as bright as once thought. That cautiousness has been necessary because annual spending has almost always significantly exceeded the budgeted amount.
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On a monthly basis, the state government publishes updates on tax revenue. However we will have little information about the spending side of the budget until the end of the fiscal year. Monthly spending estimates are possible and have been planned for but have yet to be implemented.
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We know for every tax how much was budgeted to come in and how much actually did come in. This level of detail and timely reporting is one of the most transparent parts of government. It helps serve as an early warning system so we can prepare for potential budget shortfalls.
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On the spending side of the budget however, we have little or no idea where we stand compared to budget. In February, the governor announced a plan to place monthly spending updates online as well. At this date, ten months later, no progress has been made. That makes careful consideration of revenue projections all the more important.
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