The 2022-23 state budget passed in the state House of Representatives on Wednesday would reduce state general and education fund spending by 1.4% below actual 2020-21 state spending. The reduction from what legislators approved in the last session is even larger.
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There is always some discrepancy between legislative appropriations and actual spending, as governors make adjustments when managing state operations. In the 2020-21 budget cycle, Gov. Chris Sununu took emergency measures, including a hiring freeze, to save money after the pandemic caused a dip in revenues last spring.
As a result, the state has spent less money in the current budget cycle than legislators allotted. The 2022-23 budget approved by the House Republican majority Wednesday spends 1.4% less than actual state spending in the current budget (which still has a few months to go).
But when compared to total appropriations as approved by the previous, Democratic-controlled Legislature, the reduction totals 2.3% of general and education fund spending.
The general and education funds are the portions of the state budget funded by state tax and fee revenues. They do not include federal funding.
On taxes, the budget:
- Reduces the Business Enterprise Tax rate from 0.6% to 0.55% and increases the filing threshold to $250,000 for both of the tax’s two threshold levels, gross receipts and enterprise tax base. Current thresholds are $200,000 for gross receipts and $100,000 for enterprise tax base. The budget thereby reduces both the BET rate and the number of businesses that have to pay it;
- Reduces the Business Profits Tax from 7.7% to 7.6%;
- Phases out the Interest & Dividends Tax by 1% a year over five years;
- Reduces the Meals & Rooms tax from 9% to 8.5%;
- Changes the triggers for unemployment insurance tax rate adjustments. Current law triggers rate cuts of 1% if the Unemployment Insurance Trust Fund reaches $275 million and 1.5% if it reaches $300 million. Those triggers are raised to $350 million and $400 million, respectively.
Those are the top-line state spending and tax changes. Josiah Bartlett Center will have a more detailed breakdown of the budget next week.