CONCORD — Gov. Maggie Hassan told department heads this week to keep spending increases to a minimum in fiscal year 2015-17 budget proposals, but key Republican state Senate budget writers are more concerned about which departments are spending this biennium.
They said the state does not have a revenue problem; instead, they want to know whether state agencies are staying within their budgets.
Earlier in the week, Hassan called for state agencies to hold off on large expenditures after July business, and interest and dividends tax revenues were below last year’s totals for the first month of the new fiscal year.
Earlier, Hassan — with approval of the Joint Legislative Fiscal Committee — ordered a hiring, equipment purchases and out-of-state travel freeze because of potential revenue shortfalls.
This week, she asked for her Consensus Revenue Estimating Panel to meet and provide updated fiscal year 2015 revenue estimates, and also urged House and Senate Ways and Means committee members to do the same.
But Republicans said the conservative revenue estimates they developed were nearly perfect for the recently concluded 2014 fiscal year.
“Our conservative and realistic revenue projections hit the target for the first year of this budget, and were within 2 percent in the previous budget,” said Senate Ways and Means Chair Bob Odell, R-New London. “I’m proud of the fact that the numbers show that the Republican Senate does a remarkably accurate job of estimating revenue growth for our state. The other key piece to a balanced budget however is spending.”
He and other Republican leaders want Hassan’s budget advisors to give lawmakers a detailed spending plan update heading into the second year of the biennium.“It’s been more than a month since we closed the books on Fiscal 2014, but we still don’t know how much money our state agencies spent. That’s unacceptable,” said Senate Finance Committee Chair Jeanie Forrester, R-Meredith. “I renew my request for the governor to provide a comprehensive update on state spending by department so that we can know the size of the budget problem we’re facing. Otherwise, we’re starting the next budget process in the dark, and possibly in the red.”
Hassan noted the budget uncertainty in her letter to the department heads and directed them to submit proposals to improve efficiency and effectiveness and reexamine whether contracted services are cost-effective.
By law, state agencies have to submit both a maintenance budget that includes the cost of existing services going forward and a budget that incorporates new costs such as additional personnel, or new legislatively mandated programs or technology.
Hassan told agency heads not to include “automatic inflation factors” in their budget proposals and to decide first if the spending is necessary and second how to reduce costs through efficiencies and innovation.
She wants department heads to submit proposals for each division that would reduce costs through greater efficiencies and innovation by Dec. 1.
Hassan also will require agencies to submit proposals that limit fiscal year 2016 spending to 2015 levels with a 3-percent increase in fiscal year 2017.
“The budget process is time-consuming and requires difficult decisions, but it also generates the fresh ideas and innovative thinking necessary for us to ensure that we have provided New Hampshire citizens with the best possible product,” Hassan wrote in her letter to agency heads.
By law, the proposed maintenance and change budgets have to be submitted to the Department of Administrative Services by Oct. 1.
The Governor’s Budget Hearings are generally held in November after the general election.Since the budget was approved in June 2013, settlements with hospitals over the Medicaid Enhancement Tax and mental health service recipients have added to the state’s budget woes, particularly for fiscal years 2016 and 2017.