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NH's budget picture: Big decisions must come soon

New Hampshire legislators began going over the state budget this week, and the numbers suggest a great deal of hard work ahead. Not only is the picture for the next fiscal year gloomy, but lawmakers almost certainly must cut the current budget just to balance it by the end of June, according to state and national budget experts.

The Legislative Budget Assistant's Office says the state is headed for a $25 million budget shortfall this year because hospitals are withholding their Medicaid enhancement tax payments in a dispute with the state over the tax. (The shortfall could be closer to $35 million, some legislators believe.)

Counting on new revenue from a growing economy would be a mistake, several economic analysts have said. The state's economy is expected to remain sluggish this year. And that leaves legislators and the governor in a pickle.

Gov. Maggie Hassan and many Democrats campaigned last year on promises to "restore" spending cuts by Republicans in the last budget cycle. But as legislators are seeing this week, the money simply is not there. As House Ways and Means Committee Chairman Susan Almy noted, there is not even enough money to fund the state's current operations, much less pay for anything on top of that.

It looks as though Hassan and the Democratic leaders in the House have to choose one of three paths: 1) pull back from the "restoration" on which they campaigned (thus tacitly acknowledging that Republicans were right when they said there was not enough money); 2) approve massive tax increases; or 3) bet everything on a swift approval of casino gambling, which would have to include the immediate sale of casino licenses worth tens of millions of dollars.

Gov. Hassan has some pretty big decisions to make in the next few weeks.

Eric Church
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