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The 2010-2011 Budget

The 2010-2011 Budget. A Problem of Historical Proportions. New Hampshire Operating Budget. 2008 Operating Deficit. $61.7M surplus end of 2007 ($37.7M) 2008 Operating Deficit ($6.8M) Budgeted Transfer to Highway Fund $17.2M Final Balance. 2008-09 Ending Deficit. $17.2M Starting balance

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The 2010-2011 Budget

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  1. The 2010-2011 Budget A Problem of Historical Proportions

  2. New Hampshire Operating Budget

  3. 2008 Operating Deficit • $61.7M surplus end of 2007 • ($37.7M) 2008 Operating Deficit • ($6.8M) Budgeted Transfer to Highway Fund • $17.2M Final Balance

  4. 2008-09 Ending Deficit • $17.2M Starting balance • ($11.9M) Budgeted Operating Deficit • ($250M) Projected revenue shortfall • $40M Bonding of building aid • $96.8M Governor’s estimate of spending cuts • $16M proposed transfers • Current Deficit: $91.9M

  5. Unbalanced Budget Law • RSA 9:8-B • Each fund* must be balanced • Expenditures for biennium balanced by • Estimated revenue • Money remaining from prior biennium • Bonding (debt) prohibited for “operating expenditures”

  6. Rainy Day Fund • Revenue Stabilization Reserve Account • Surplus in, deficit out • When does it rain? RSA 9:13-E • Is Transfer Mandatory • Suspended last 2 budgets

  7. Spending Baseline • $1,605.4M Budgeted GF Net Appropriations • ($96.8M) Governor’s estimate of spending cuts • $6.2M University rebates don’t change base • Baseline GF Spending: $1,516 million • 2009 ETF $897.7M • Current Law $947M in 2010, $949M 2011

  8. The Size of the Budget Hole 2010-2011

  9. In Context • GF Spending held flat for two years only once in post-WWII period • 2009 Revenue equal to 2007 Spending • 1989 Spending + inflation = $1,065M • After cuts, 2009GF = 2007+9%

  10. Spending Strategies • Hunt and Peck • Directed Management • 2007 Plus • 2009 Minus • Education • 10% of GF = $151M

  11. Revenues • Big New tax? • Raising Taxes in Recession • Enterprises • Sale of Assets • Dedicated Funds

  12. A Word on Highways • Spending Caps • Shovel Ready • Grand Plans • Tolls v. taxes • More money

  13. Dangers to Long term • Borrowing • School aid • Highway example • One-time transfers • Flexible grants • Reimbursement • Remainders • Cautious Estimates

  14. Other Issues • Bond rating – operating deficits • 2011 true balance • OPEB • ARC 50/207 • 2.559B 2006 • Retirement: 2.519B before

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