Uncertainty abounds as novel coronavirus infects state revenues

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The coronavirus pandemic has walked through the door to the Granite State and will have far-reaching effects beyond the next few months or possibly into the next year.

The number of cases is exploding in two hot spots — the Upper Valley and Rockingham County — and spreading rapidly to other areas of the state.

Hospitals are asking people to donate masks and other equipment in order to protect health-care workers as they expect hospital intensive care units to begin filling with patients with COVID-19.

State officials have taken the unprecedented steps of closing restaurants and bars to all but take-out service; closed schools, the State House and ski areas; waived unemployment requirements to obtain benefits; prohibited gatherings of 50 people or more, utilities from shutting off service for non-payment, and financial institutions and landlords from instigating evictions or foreclosures, and establishing a $50 million loan fund to help health-care providers weather the mega-storm on the horizon.

The federal government approved one legislative package to combat the virus and its economic ramifications and is working on two or three more.

This is no time “for government to run more like a business” and there never is because they have different functions.

A business generally seeks to make or provide good products and services that will generate profits for owners and stockholders, while government provides needed services fueled by contributions from taxpayers for the greater good of society.

When the economy is booming as it has been for a decade or more, the need for government services is less and revenues generate more than needed to cover the expenses.

But when people need services in an economic downturn or a pandemic, government needs to provide more services that cost more than the tax system generates.

That is what good governments do and that is the overall plan federally and at the state level.

Good government or not, New Hampshire like the rest of the country, is facing a long, long period of disruption to our normal everyday lives.


The State House complex is closed and will be locked down in the next few weeks as first the Legislative Office Building, the connecting tunnel and the State House will be hyper-cleaned and disinfected.

The only section of the complex to be open will the second floor of the State House for the offices of the governor, Executive Council and Secretary of State.

To reach any of those offices, people will have to enter through the Park Street entrance and check-in with security.

While officially the State House complex is closed until April 11, expect it to last much longer.

That means the 2020 legislative session will likely be extended. How long is anybody’s guess. Putting more than 400 people with an average age over 63 years old in one room is asking for trouble.

Several key bills were fast-tracked into law like the Medicaid for schools legislation, but others may have a long wait.

State Revenues

The state has been swimming in money for a while, but the current budget approved by lawmakers and Gov. Chris Sununu in September after he vetoed the budget in June, used most of the surplus revenue to cover costs for many health-care initiatives and programs including mental health and opioid addiction.

The two-year budget envisioned less revenue than the previous two-year spending plan, and to date it is about on target, but $76 million less than a year ago, and more importantly business taxes are down almost $100 million from a year ago with two crucial months coming March and April.

Business taxes account for about 30 percent of all state revenue and with the economic slow-down, that is a big problem and one-third of business taxes are collected in March and April.

Businesses estimate their state tax liability so with the uncertain future, collections for the next two months are apt to be far lower than estimates as businesses began to “true up” their obligations.

The second-biggest revenue generator for the state is the rooms and meals tax providing about 14 percent of all state revenue.

Rooms and meals collections run a month behind as it takes some time for the money to make its way from restaurants, hotels and rental cars to the state treasury.

With the early closing of ski areas and less travel because of the virus, this revenue source is likely to also have a big decline.

With more people being told to stay home, liquor and tobacco sales are bound to be less than anticipated.

Home sales — the real estate transfer tax has been producing significant revenue for the state over the last decade — are bound to noticeably slow down.

The interest and dividends tax is another substantial revenue source, but with the stock market crash, the revenue is not likely to be close to what budget writer anticipated.

With many people working from home, there is less travel so the gasoline tax or road toll will likely also be less than anticipated at a time when it is declining due to greater efficiency and alternative fuel for vehicles.

Bus lines have either curtailed schedules or suspended service including most trips to New York City, which has been hard hit by the virus.

And Fish and Game revenues are also likely to be impacted by the virus and economic drop.

Almost every aspect of the state’s revenue stream will be impacted by the pandemic and will decrease as the number of infected people rise and greater controls put in place.

While revenues will fall dramatically, the need for services will grow and grow as the pandemic deepens.


Most colleges and universities will use remote learning as spring break ends and classes resume. Both the University and Community College Systems of New Hampshire schools have suspended classes and instead will employ remote learning for the rest of the Spring semester.

Many other Granite State colleges and universities are finishing the Spring semester with remote learning as well, although some are waiting until next week to make a final decision.

Unless there is a major turn-around in the next six weeks or so, many colleges and universities will have to cancel graduation ceremonies, although most do not want to make the final decision until closer to the date.

Sununu ordered all public schools closed until April 3, and to use remote learning. Last week Education Commission Frank Edelblut signaled schools should be ready to continue remote learning until the end of the school year. This would be a good year to waive the 180-day requirement as well as some others.

Graduation ceremonies will certainly be impacted if the virus continues to march through the state.

The Arts

Plays, concerts, movies, exhibits etc. have been curtailed as theaters have shut their doors.

The earnings of musicians, actors and artists who are not rich are disappearing with no certainty of returning until restrictions end.

More Changes?

The explosion of infections in Massachusetts and the New York City area is concerning as the New Hampshire cases have begun to increase by double digits. How long can the state wait to declare a shelter in place order?

Although Sununu has said that would be a last resort, and it is bound to anger many people in an election year, it would be much better to be ahead of the curve than behind it.

Essential medical supplies and equipment are running out and hospitals and other providers will need to restrict services likely with draconian consequences.

The quicker the curve is flattened, the more likely the effects will not be permanent, although significant changes to our way of life lay ahead.

Garry Rayno may be reached at garry.rayno@yahoo.com

About this Author


Garry Rayno

Political ReporterInDepthNH.org

Distant Dome by veteran journalist Garry Rayno explores a broader perspective on the State House and state happenings for InDepthNH.org. Over his three-decade career, Rayno covered the NH State House for the New Hampshire Union Leader and Foster’s Daily Democrat. During his career, his coverage spanned the news spectrum, from local planning, school and select boards, to national issues such as electric industry deregulation and Presidential primaries.