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We're In the Money: State's Surplus Quintuples
Here’s a strange twist: good economic news. Governor Lynch’s office today announced due to state-level belt tightening, New Hampshire has an unexpected $26 million dollar surplus. But given the larger financial outlook, no one is jumping up and down.
After closing the books on the fiscal year that ended this past June, the Department of Revenue Administration found about $26 million dollars under the sofa cushions.
Well, not really sofa cushions, says Governor John Lynch.
And really the governor adds the money didn’t fall out of anyone’s pocket.
“Primarily it’s the result of the commissioners really keeping a tight control over spending.”
Back in 2008, Governor Lynch ordered all the state agencies- like Health and Human Services, Corrections and Insurance- to cut back.
No more out-of-state travel, a freeze on buying new equipment, and hiring new people.
Given that policy, budget writers had expected around $70 million in so-called ‘lapses,’ that’s the money the state agencies are given but don’t spend.
Lynch lavishes praise on the Commissioners for working overtime to come up with so much more.
“I think they’ve done a great job really going over their budgets and watching every single dollar they were spending.”
This slug of unexpected cash brings the state’s surplus up to $35 million dollars, when you count the Rainy Day Fund’s $9 million.
On top of that it looks like New Hampshire will end the first quarter of this fiscal year about $10 million above projection.
A $45 million dollar surplus?
All of a sudden it’s raining money in the Granite State.
Of course, this could prompt interest groups to call on the legislature to fund hospitals, the University System or social services in the wake of historic budget cuts.
I catch up with Senate President Peter Bragdon at the statehouse, and ask him about all this cash.
“What do you think should be done with this money?”
“Oh, good heavens, it’s way too early to make any of those kind of decisions. We are three months into a 24 month budget cycle.”
Bragdon says the prudent course for now, is to watch.
Watch what happens with tax revenues...watch to see if Washington fines the state $35 million dollars for mismanagement of healthcare funds...watch to see if the country slumps into another Recession.
“There certainly are enough problems looming that the state needs to prepare for additional changes one way or another.”
That’s the Center for Public Policy Studies’ Steve Norton.
Many budget watchers agree the situation is too volatile to start earmarking money.
House leaders plan to introduce a bill early next year to transfer the $26 million dollars into the Rainy Day fund.
But given the financial landscape, by January any surplus could be gone.