New Hampshire's FY 12 -13 Budget Deficit_ Scope_ Sources_ and by hcj

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									NH Child Advocacy Network
June 8, 2011

Jeff McLynch
Executive Director
New Hampshire Fiscal Policy Institute
603.856.8337
jmclynch@nhfpi.org
www.nhfpi.org
The Challenge   The challenge before policymakers was to close a budget gap in
                the hundreds of millions of dollars, while preserving vital public
                services such as health care, education, and protections for
                vulnerable populations.


The Responses   Governor Lynch looked towards a combination of underlying
                revenue growth and spending reductions to address New
                Hampshire’s budget shortfall.

                House and Senate versions of the budget – in the aggregate – are
                more similar than they are different, with both chambers relying
                almost exclusively on deep spending cuts to achieve balance.

                Still, key differences remain to be resolved in conference.


The Remaining   Both House & Senate could make sizable transfers into the
                Stabilization Fund, while revenue collections could exceed
Opportunities   estimates.
   5,000


                               $413
   4,700               Federal stimulus, debt
                       restructuring, etc.


   4,400


                                                                             $4,876
   4,100
                             $4,483
   3,800



   3,500
                              Revenue                                       Expenditures


Source: NHFPI calculations based on January 5, 2011 LBA Surplus Statement
 5.0                                                                        Ongoing revenue


 4.7
                                                                            Ongoing
                                                                            expenditures

 4.4                                                                        Temporary revenue


 4.1
                                                                            Revenue growth
                                                                            relative to FY 10-11

 3.8                                                                        Revenue decline
                                                                            relative to FY 10-11

 3.5
                           FY 12-13          FY 12-13          FY 12-13
                                                                            Reductions in
       FY 10-11
                           Governor        House Passed     Senate Passed   expenditures
  Actual & Authorized
                        Recommended                                         relative to FY 10-11
Source: NHFPI calculations based on May 26, 2011 LBA Surplus Statement
 $4,800



 $4,600
                               $4,713

 $4,400

             $4,435                                                                $4,464
                                                $4,424              $4,398
 $4,200



 $4,000



 $3,800



 $3,600
           Actual & Trend      Governor        House - Initial   House - Revised   Senate
             FY 2010-11                                    FY 2012-13


Source: NH DAS; HR 11; HR 12; HB1 and related amendments
  5.0%

  4.5%
                                                                                      Governor
  4.0%

  3.5%                                                                                House - Initial

  3.0%
                                                                                      House - Revised
  2.5%

  2.0%                                                                                Senate
  1.5%
                                                                                      NH GF & EF, FY00-10
  1.0%

  0.5%
                                                                                      All states, FY11-12
  0.0%
                    FY 11 to FY 12                      FY 12 to FY 13
Source: NHFPI calculations based on data from Center on Budget and Policy Priorities; NH DAS; HR 11; HR 12; HB1
and related amendments
 $2,600




                                                                                                            Senate
 $2,400
                                                                                                           estimates



 $2,200




 $2,000




 $1,800
           2000    2001     2002    2003     2004    2005     2006    2007     2008    2009     2010    2011     2012   2013


Source: NHFPI calculations based on NH DAS, HB1 and related amendments, and US Bureau of Labor Statistics data
5.0


4.8


4.5


4.3


4.0


3.8


3.5
            FY10-11               FY12-13                FY12-13         FY12-13
       Actual & Authorized        Governor             House Passed   Senate Passed
                               Recommended

 Source: NHFPI calculations based on May 26 LBA Surplus Statement
                            Education Expenditures                       o
        (General & Education Fund only; millions of nominal dollars)

                        -      500    1,000   1,500     2,000    2,500

         FY10-11
       Appropriations                                  $2,321
            FY10-11
            Actual &                                   $2,310
           Authorized

       FY12-13 Gov.
      Recommended                                      $2,275
                                                                         o
 FY12-13 House Passed                                 $2,236

FY12-13 Senate Passed                                 $2,236



Source: NHFPI calculations based on LBA data, Governor’s Executive Budget Summary, HB1 and related amdts.
                 Health & Social Services Expenditures
               (General Fund only; millions of nominal dollars)

                        -   300     600     900     1,200   1,500   1,800

         FY10-11
       Appropriations                                  $1,562
            FY10-11
            Actual &                              $1,330
           Authorized

       FY12-13 Gov.
      Recommended                                     $1,512                o

 FY12-13 House Passed                             $1,308                    o

                                                                            o
FY12-13 Senate Passed                              $1,358


Source: NHFPI calculations based on LBA data, Governor’s Executive Budget Summary, HB1 and related amdts.
• $19.9 million reduction in funding for    •   Restored $19.9 million for services
  services for people with developmental        for those with development disabilities
  disabilities
                                            •   Restored $18.1 million for mental
• $25 million reduction in funding for          health services
  mental health services for 7000 adults
  and children
                                            •   Provided $4.2 million for CHINS
                                                services and amended CHINS statute
• Repeal of CHINS statute and elimination
  of CHINS funding
                                            •   Restored $2 million in variety of DCYF,
                                                DPH, and BEAS programs
• Limited uncompensated care funding to
  critical access hospitals
                                            •   Prioritized payments to medical
                                                providers out of the uncompensated
• Suspended local welfare statute               care fund above critical access
                                                hospitals
70

60                                                        Transfer assuming
                                                          balanced FY 11 budget

50                                                        Transfer assuming
                                                          $50M deficit
40

30

20

10

 0
                       House                                        Senate

 Source: NHFPI calculations based on May 26 LBA Surplus Statement
                              “It is the intent of the House of Representatives
                              that revenue reductions … will be considered
                              and supported to the extent that state
                              revenues exceed the adopted revenue
                              estimates…”


“The department of health and human services shall present a
plan … for making uncompensated care payments to hospitals
… for the fiscal year ending June 30, 2013.

Said plan shall be presented to the fiscal committee of the
general court no later than September 12, 2012

Such payments may be paid on the warrant of the governor,
out of any money in the treasury not otherwise appropriated”
                                                                                   Projected
                                                                                    FY12-13
  Bill                                                                             Revenue
Number                                 Description                                    Loss

         Reestablishing the monthly exemption to the communications services
HB 37                                                                                    $4 M
         tax

         Increasing a threshold amount for taxation under the business
HB 154                                                                                  $12 M
         enterprise tax (BET)

         Reducing the business profits tax (BPT) rate from 8.5 to 8.0 percent by
HB 213                                                                                  $27 M
         2012

HB 166   Reducing the meals and rooms tax rate from 9 to 8 percent                      $54 M

TOTAL                                                                                   $97 M
 Impact of US DHHS decision on DSH payments
   NH could see loss of $35M in federal funds


 Impact of public pension changes
   House assumed $40M in savings; Senate $26M


 Differences in revenue projections
   House revised its FY12-13 figures down by $26M in May


 Proceeds from sale of Lakes Region Facility
   Senate assumes $10M in additional revenue in FY13


 Revenue growth faster (or slower?) than projected
The Challenge   The challenge before policymakers was to close a budget gap in
                the hundreds of millions of dollars, while preserving vital public
                services such as health care, education, and protections for
                vulnerable populations.


The Responses   Governor Lynch looked towards a combination of underlying
                revenue growth and spending reductions to address New
                Hampshire’s budget shortfall.

                House and Senate versions of the budget – in the aggregate – are
                more similar than they are different, with both chambers relying
                almost exclusively on deep spending cuts to achieve balance.

                Still, key differences remain to be resolved in conference.


The Remaining   Both House & Senate would make sizable transfers into the
                Stabilization Fund, while revenue collections could exceed
Opportunities   estimates.

								
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