CONCORD, NH — Opening the initial hearings on the 2022-2023 biennial budget Thursday, Gov. Chris Sununu said the state is in a far better position than envisioned last spring in the midst of the coronavirus pandemic.
“I feel very positive, we have a lot of work to do,” Sununu told those gathered at the Department of Transportation for the Governor’s Fiscal Year 2022-2023 Agency Budget Hearings. “It is going to be a tough budget that is for sure.”
Sununu praised state agencies for holding the line on expenses as the state grapples with the pandemic and declining revenues due to the shutdown of all but essential businesses in the spring.
“I still think there are some real changes we could make structurally here in New Hampshire to create a better balance sheet in the management of the state,” he said.
Sununu suggested the state either double or triple its rainy day fund and eliminate many business tax credits that he said could result in a cash flow problem.
“It is always good to get liabilities off the books,” Sununu said.
Currently the state’s rainy day fund is $115 million.
Any change in either the business tax credits or the amount of money in the rainy day fund would require legislative approval.
Opening the hearings, Sununu said New Hampshire is in a much better financial position than many other Northeast states suffering under the weight of the pandemic.
It is better when surrounding states do well economically, Sununu said, because “we are all in this together,” but noted some states like Massachusetts and New Jersey are going to have some “very tough economic times that directly affect their revenue streams.”
“New Jersey bonded $4 billion for general funds,” Sununu said. “That is dumb and that is crazy and we are not going to do that here.”
The combination of state agency reductions and efficiencies, with the Governor’s Office for Relief and Recover which oversaw the distribution of $1.25 billion in federal CARES Act funds, was able to bring the state’s economy back in a sound way, Sununu said.
He said it is unclear if more help from the federal government is on the way or when but assumes additional help will be forthcoming at some point.
“But we can’t count on it, and we don’t know when,” Sununu said, “so we have to build a budget as we always do for the state of New Hampshire and on the revenue stream we have.”
While other states may look for federal help to “backfill” lost revenue, he said New Hampshire could use the federal money to drive business development and infrastructure improvements for the long-term benefit of the state.
“When you cut taxes, business does well,” Sununu said. “We have businesses coming here all over New Hampshire, they are climbing all over themselves to come here,” but did not give any examples.
He said the state needs to develop “a very different looking budget,” noting he asked agencies to look for long-term efficiencies within their departments, not just cutting staff, but better use of technology.
People want to use technology, he noted, and suggested increased spending in that area to save on long-term obligations down the road.
Sununu asked agencies to submit efficiency budgets (budgets that do not add services etc.) that were less than spending authorized for the current fiscal year 2021.
He praised the Department of Revenue Administration for its work to help with the distribution of CARES Act funds as it administered most of the grant programs for businesses.
The department asked for slightly less money for the next two fiscal years than its authorized 2021 budget of $22 million.
Commissioner Lindsey Stepp said the department’s proposed budget eliminates some consulting and vendor fees, as well as out-of-state travel, training and overtime.
The department’s top priority is adding several auditing positions to bring in additional revenue. She said the additional positions included in the current biennial budget were not filled when the hiring freeze went into effect.
She also asked for several other positions to enhance customer service to speed processing and collection.
Senate Minority Leader Chuck Morse, R-Salem, asked if businesses receiving paycheck protection program grants under the federal pandemic packages would have to pay state taxes on the awards.
Shepp said the grants are not taxable under the federal tax code but businesses may not deduct expenses related to the grant, but under state tax codes, the grants are taxable, but businesses can deduct the expenses.
She said there is a section on the agency’s website explaining businesses obligations if they received PPP grants.
Attorney General Gordon MacDonald requested three new attorney positions and two authorized but unfunded investigator positions.
In order to implement the recommendations from the Governor’s Commission on Law Enforcement Accountability, Community and Transparency for a public integrity unit, an attorney and investigator are needed, he said.
MacDonald said his office is in the midst of the largest investigation the state has ever done. The investigation into the Youth Development Center will need another attorney to bring justice to those affected, MacDonald said.
And he asked for additional help to address three ongoing hospital mergers: Exeter and Wentworth-Douglass and Partners Healthcare, Dartmouth-Hitchcock and Granite One Health, and Lakes Region Health Care and Concord Hospital.
“It’s an unprecedented challenge,” MacDonald said. “It involves 12 of the 26 acute care hospitals in the state and we need an additional attorney.”
The hearings continue through Friday afternoon and may be heard via phone by calling 1-800-356-8278 and then entering PIN: 671812.
Garry Rayno may be reached at firstname.lastname@example.org.