Lynch Budget Unveiled

There appears to be $110 million (0.00 / 0)

in a "medical malpractice account" created decades ago and overfunded. Tapping that helps a lot.

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by: elwood @ Thu Feb 12, 2009 at 10:17:15 AM CST

well, the medical malpractice fund will help for a couple of years... (0.00 / 0)

...but in 2011, the pennies from that piggy bank are gone... and I am worried that this may turn out to be the last unbroken piggy bank.  But I suppose the idea is for Lynch to roll up these last few pennies and cash them in to keep the state government going for the next biennium--- while the General Court takes the hit for raising taxes and fees and for eliminating state programs.  Fair enough.... and in fact Lynch is doing exactly what the state constitution tells him to do.

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by: TimothyHorrigan @ Fri Feb 13, 2009 at 08:05:56 AM CST

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This is the 4th cigarette tax hike he has asked for (4.00 / 1)

The Governor REALLY doesn't like the tobacco companies, does he? On the one hand, this will reduce cigarette smoking... a good thing. On the other hand, since smokers tend to be a lower-income demographic, this is yet another regressive NH tax in a state that already has one of the most regressive state and local tax systems in the country.

Here's an idea- bring back the estate tax on estates over $2 million. That'll raise as much as the cigarette tax will.

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by: Michael Marsh @ Thu Feb 12, 2009 at 10:54:28 AM CST

My assumption is (0.00 / 0)

our cigarettes will always cost a bit less per pack than in Massachusetts. And if the tax does reduce smoking, it is regressively saving lives: not a bad thing.

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by: elwood @ Thu Feb 12, 2009 at 10:58:35 AM CST

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It would be nice (0.00 / 0)

if some on the money went to helping smokers quit.

"Plus Ça Change, Plus C'est La Même Chose"

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by: NHFlatlander @ Thu Feb 12, 2009 at 11:09:15 AM CST

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You can be sure the tax will be less than Mass' smoker's tax (0.00 / 0)

That is one of the key considerations we make before we increase the tax- "How much will we drive away Bay Staters who come up here to buy their butts?" There is a spreadsheet floating around that is used to calculate this effect, if you can believe it.

As for using some of the ciggie tax money to fund smoker's cessation programs, it's not likely in a state with a chronic revenue problem.

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by: Michael Marsh @ Thu Feb 12, 2009 at 13:11:26 PM CST

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In the heartless category (0.00 / 0)

Cigarette taxes actually cost the government money.  The 2003 study from Harvard Econ professor Vicusi show a net savings of about 35 cents a pack.

J

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by: Gearfish @ Thu Feb 12, 2009 at 23:00:00 PM CST

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Here's the thing: (0.00 / 0)

Sometimes, you need to raise revenue.  Reaganites (nationally) and William Loeb (locally) have made it impossible to raise taxes, ever, or even oppose lowering taxes.

Except this one.  Smokers self-select and being a smoker is not seen as desirable to non-smokers, therefore, the non-smoking general public doesn't really care how much you tax cigarettes.  Everything else, on the other hand, they do care.

It's a political consideration.

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by: This Was The Moment @ Thu Feb 12, 2009 at 23:16:46 PM CST

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ah but those lower income (4.00 / 1)

smokers aren't likely to have health insurance, either. We all pay the price for their addiction, eventually.  

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by: susanthe @ Fri Feb 13, 2009 at 09:04:51 AM CST

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Let's see... (0.00 / 0)

Reducing spending during a deep recession...Herbert Hoover would be proud. One of these days we should closely examine the myth of NH's balanced budget.  

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by: measurestaken @ Thu Feb 12, 2009 at 11:04:12 AM CST

Governors have no choice (4.00 / 1)

The federal government can follow Keynes and run deficits to help the economy. State governments cannot - at least, none that I know of. Their constitutions demand a balanced budget.

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by: elwood @ Thu Feb 12, 2009 at 11:22:05 AM CST

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Not really true. (0.00 / 0)

This is one of the most durable myths in American politics. First, we could (and do) borrow money thru bonded indebtedness.  Second, I don't know what his growth assumptions are, but they might be low. Third, we have a rainy day fund that we can spend since it is, you know, raining. Bond rating agencies might carp, but we have a very durable bond rating. Maybe I'll write more on this.  

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by: measurestaken @ Thu Feb 12, 2009 at 13:17:14 PM CST

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They also cant print money, which is as big a limiting factor. (4.00 / 1)

The only two countries with the ability to provide truly massive stimuli are the US and China. China because it has huge foreign reserves , and the US , because we print the currency used internationally ( which of course will end someday , as printing money means devaluing the dollar, and thus making the foreign reserves of other countries (see China, above)worth that much less . There is a limit to what other countries will accept in terms of us exporting  our deficits. The existential crisis faced by countries such as Iceland, Ireland and Spain, is that they have no means to cover their debts or stimulate the economy-- if they print more money, it is just worth that much less in international currency (dollars).

(Im not sure that all state constitutions require a balanced budget)

"But, in the unlikely story that is America, there has never been anything false about hope." Si se puede. Yes we can.  

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by: Paul Twomey @ Thu Feb 12, 2009 at 13:18:42 PM CST

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More details available here (4.00 / 1)

http://unionleader.com/article...

It looks like a lot of problems are going to be downshifted to the counties and town and the property tax payer. For example - suspending the Rooms and Meals tax rebates to towns and cities.  

and don't forget - no sales or income tax.

Mention was made about dedicated funds.  That concerns me.  These funds already pay a 5% fee to the state.  Most of them were created so as to protect them from being raided to help balance the state budget.  Many are user fees that were put into place to make sure there was money available for specific things such as the clean-up of hazardous waste or conservation.

But, Fran Wendleboe was happy or so she sounded on NHPR.


"Plus Ça Change, Plus C'est La Même Chose"

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by: NHFlatlander @ Thu Feb 12, 2009 at 11:05:01 AM CST

actually... (4.00 / 1)

Overall communities will be kept at the same level - a few will get more and a few will get less.

As a member of the House Appropriations Committee during the last deep recession (1991) I could  have only dreamed of such a reasoned budget proposal by a governor. At the time I was also a Manchester Alderman and would have appreciated such local support the governor is proposing.

Over the next four months we will learn more information, discover new innovations and craft a sound final budget.

Democrats solve problems, Republicans sit and say no.

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by: Ray Buckley @ Thu Feb 12, 2009 at 11:51:03 AM CST

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last recession (4.00 / 2)

ahhh but Ray, if memory serves me right mediscam came through with over a billion dollars in funds filling enormous holes in state govt over 5 years, merrill tried some tax reform with the BET, we still had an inheritance tax (folks still die in a depression and we are the 8th richest state in the nation)and the gas tax was raised in 92...maybe since things are so much worse today we can revisit the republican approach which wont shift and shaft cities and towns and counties with increased property taxes (fyi-the stimulus bill sends 45 billion less than was hoped for state and local govts so the repubs could repeal the AMT which won't create one job or respond to one funding need)after all Lynch promised money from the feds...ahhhh but only if it comes in a way local govts can access,otherwise they are on their own.

When the Reagan Network's Director and Conservative Empress Fran Wendelboe is a happy camper, I don't smile and think Wow how bipartisan!!!!  I think a castrated democratic party.  

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by: political chowder @ Thu Feb 12, 2009 at 12:52:10 PM CST

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Last recession... (0.00 / 0)

In 2002/2003, I think I recall we raised both the BPT and BET tax rates.

As for the inheritance tax, there is a bill to bring back, or rather to make meaningful again, our estate tax. The bill is HB691, sponsor is Paul McEachern and it could bring in $25 million per year.

One of the things we should be considering is selling assets that aren't important to our state mission- land on the highways and perhaps Cannon Mt. We could also look at securitizing the revenue we get from the tobacco Master Settlement Agreement. Selling a 10-year stream of this could bring in roughly $270 million this biennium.

For all the grousing, what do you think the speech today would have been like if Joe Kenney were making it? Aside from his "innovative plan" to balance the budget by selling advertising space on the sides of busses going up and down I-93. ;-)

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by: Michael Marsh @ Thu Feb 12, 2009 at 13:20:31 PM CST

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The devil's in the details (0.00 / 0)

The stimulus money will come with strings and the towns won't be able to use it for their general budget. Will the towns be reimbursed for the additional costs associated with the closing of the courts?

I appreciate that the state is in a tough situation, but Democrats have to be careful that they don't succeed in achieving Republicans dreams of cutting state government to the bone.

How would the Democrats have reacted if Benson had proposed cutting the catastrophic illness program or some of the other cuts proposed?


"Plus Ça Change, Plus C'est La Même Chose"

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by: NHFlatlander @ Fri Feb 13, 2009 at 09:47:06 AM CST

[ Parent ]

Text (4.00 / 1)

Available here

http://www.governor.nh.gov/spe...

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by: sdoyle @ Thu Feb 12, 2009 at 11:24:57 AM CST

is the actual budget document and the summary available on line? (0.00 / 0)

"But, in the unlikely story that is America, there has never been anything false about hope." Si se puede. Yes we can.  

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by: Paul Twomey @ Thu Feb 12, 2009 at 13:25:50 PM CST

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Link To The Links For The Budget Proposal (0.00 / 0)

Here you go

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by: Andrew Sylvia @ Thu Feb 12, 2009 at 17:36:06 PM CST

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Thanks! (0.00 / 0)

"But, in the unlikely story that is America, there has never been anything false about hope." Si se puede. Yes we can.  

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by: Paul Twomey @ Thu Feb 12, 2009 at 18:01:22 PM CST

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The Sky is Falling! It's All Terrible... (0.00 / 0)

But we've got to do something to get through the next two years.

Some items are no-brainers like closing under-performing liquor stores and getting rid of underutilized or outmoded state facilities.

Adjusting retiree and employee health insurance costs, something everyone in the private sector has to live with, is a necessary evil - and underlines why health care reform has to be high on the federal agenda. It's central to economic recovery and growth.

Kicking up our current taxes and fees is regressive - drive to McDonald's for lunch and it'll cost you an extra seven cents a day! - and, when it comes to revenue, I'd personally prefer one of those Taxes That Dare Not Speak Its Name.

But we knew he wasn't going there - and at least he didn't push gambling!

Time to start going through the thing and coming up with specific ideas and alternatives.

And did you notice the preliminary projection into the next biennium? Is the governor tipping his hand about 2010?

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by: Tim Ashwell @ Thu Feb 12, 2009 at 11:43:55 AM CST

John Lynch: "A+" For Challenging Us To Think (4.00 / 5)

I think John Lynch deserves an "A+" for challenging us to think.  He brought the challenge to the Republicans too, because blast him as they will for some fee and toll increase proposals and financial holdbacks from cities and towns, the Republicans will have to come up with efficiency and streamlining proposals of their own if they don't accept his.  

We're in tough times, and John Lynch stood up and put forth some ideas.  That's his job, and he deserves credit.  Now the budget process goes on as Legislative Committees hold hearings and have hundreds of hours of discussion.

A close look will have to focus on whether layoffs of employees or closings of some facilities will hurt people who we, as Democrats, have always supported and fought for.

Got an idea or a suggestion?  -- there are lots of places to pass them on.  

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by: Rep. Jim Splaine @ Thu Feb 12, 2009 at 12:49:36 PM CST

Conservatives are opposed to taxes because they cut out (0.00 / 0)

the middle man.  Bonds for capital improvements, contracted services and fees all provide opportunities for a guaranteed revenue stream for the financiers.

Somebody needs to make the point that funding government services with taxes on a pay-as-you-go basis is the essence of realizing economies of scale.

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by: hannah @ Thu Feb 12, 2009 at 15:22:37 PM CST

The hikes in tolls and car registrations mean (4.00 / 1)

that this budget will make New Hampshire's outrageously regressive tax structure will become even MORE regressive.

Michael Marsh has been proposing a re-introduction of the estate tax. Governor Lynch has called his package a starting point. The legislature should crunch the numbers: can you have the heirs and heiresses pay a little more, instead of making it harder for the minimum wage worker to own a car?

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by: elwood @ Fri Feb 13, 2009 at 05:12:17 AM CST

The estate tax bill was heard in Concord on Thursday (4.00 / 1)

You are right about increasing the regressivity. The Governor is proposing to increase the tax that a working guy pays for the Subway sandwich he eats for lunch, but the son of a wealthy person could inherit $10 million and not contribute a dime to our state.

If you think this is wrong and have the time, e-mail Democratic members of the House Ways and Means committee and urge them to vote to bring back our estate tax.

I wouldn't bother trying to get the Republicans to vote for it. One of them accused the sponsors of this bill as practicing "class warfare".

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by: Michael Marsh @ Fri Feb 13, 2009 at 12:51:26 PM CST

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If money is so tight, (0.00 / 0)

how come New Hamshire DES is wanting to destroy the dam on our Mill Pond in Durham, along with the wetlands and scenic view enjoyed by our elderly residents on Church Hill?

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by: hannah @ Fri Feb 13, 2009 at 05:18:02 AM CST

Liquor stores as a natural resource (4.00 / 4)

"One of our biggest assets- if we let it be - is our state liquor stores. " said Gov, Lynch yesterday.

Okay, I know he did not exactly call liquor stores a natural resource, but when he uttered that sentence, I thought how out of whack is our state, when one of our biggest assets is selling liquor, and on the other hand, the budget proposes closing eight district courts and a correction facility- both of which owe much of their "business" to the sale, use and abuse of alcohol.

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by: Kathleen O'Donnell @ Fri Feb 13, 2009 at 10:53:49 AM CST

Hey, isn't that the "NH Advantage"? (0.00 / 0)

Our state gets about 25% of its total state general fund revenues from "sin"- boozing, smoking, and gambling. I am pretty sure that the only state that gets a higher % is Nevada.

If you really want to drive yourself crazy, reflect on the fact that we don't spend a dime on treatment or cessation programs to help the people who suffer from addiction to these sins. That's the New Hampshire way!

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by: Michael Marsh @ Fri Feb 13, 2009 at 12:43:10 PM CST

[ Parent ]