Gov. Maggie Hassan finally has realized that she cannot run around the state doing photo ops while legislators fix the state budget. She is going to have to get her hands dirty. This is going to be fun to watch.
Hassan is not what anyone would call a hands-on governor. Now she finds herself in the difficult position of having to lead during a time of financial turmoil.
A judge blew a $185 million hole in the state budget in the current fiscal year and the next when he ruled the Medicaid enhancement tax unconstitutional last month. Then in April revenues came in $22 million below budget. Those are serious problems that require immediate action. But Hassan took weeks to even announce that she was planning to ask the Fiscal Committee for a freeze on hiring, purchasing and out-of-state travel.
That is the right first step, but it is only a first step. It will take a lot more than that to fix the budget. And the problem is likely to get worse before it gets better. If the April revenue numbers are not an outlier, if they are a sign that business profits are trending down again, then we are looking at a longer-term problem.
And if the budget picture gets worse, the bond rating is in danger. Two ratings agencies already have indicated that the state’s bond rating is at risk. If it takes a hit, the state will have to pay a higher interest rate on its debt, which means higher debt payments.
All of this has to be managed by a governor whose financial skills are questionable at best. Last year she proposed a budget that estimated state revenues to be $150 million higher than the state Senate’s estimates. The Senate won that fight. Had Hassan prevailed, she would have had to start cutting spending by tens of millions of dollars months ago just to get to a balanced budget by the end of the fiscal year.
Memorial Day is next week, and summer is almost here. Gov. Hassan is unlikely to spend much of it outdoors, unless she just doesn’t take her responsibilities too seriously.