NHPR – January 16, 2025
By JOSH ROGERS
It’s been clear for some time that state lawmakers and Gov. Kelly Ayotte will face challenges in crafting the next two-year state budget. But the scope of what they will face came into greater focus this week, as budget writers in the New Hampshire House kicked off committee meetings. The message from financial experts was clear: Expect less money to work with. “The revenues were flowing very well over the last few years, but that’s ended,” Legislative Budget Assistant Michael Kane told members of the House Finance Committee Thursday.
Kane, who provides financial analysis to lawmakers, was referring to collections on state business taxes, which since July have fallen more than $80 million shy of forecast. That’s far from the only factor adding to budget pressure. There is the expiration of federal pandemic aid programs that pumped more than a billion dollars into state government over the last three years. There are also looming state liabilities, including school funding lawsuits and the spiraling cost springing from abuse committed at the state’s youth detention center. This array of factors is one reason why Ayotte has asked state agencies to trim spending. Ayotte ran on a promise to not raise taxes, and she reiterated this week she will make good on that.
“I’ll look at every single bill and look at whether it makes fiscal sense for the state of New Hampshire,” Ayotte told reporters Wednesday, while also confirming that her budget proposal will not include tax cuts. Several bills backed by top House Republicans aim to further reduce the state’s business taxes. “Our budget will be based on the revenue structure we have today,” Ayotte said. Ayotte will present her budget to lawmakers next month. In the meantime, members of the House Finance Committee are gearing up for what lawmakers in both parties say they expect to be the toughest budget season the state has faced since 2011, when lawmakers cut state spending by 11 percent in the wake of the Great Recession.
Rep. Ken Weyler of Kingston, chairman of the House Finance Committee, was the House’s top budget writer then. He told colleagues Thursday that this year that he’ll be looking for savings by eliminating unfilled state jobs. “This is going to be a tight budget, and a lot of the money will come from not funding empty positions,” Weyler said. In the coming weeks, House budget writers will get updates from the heads of state agencies about how they are spending money – all of which will inform decisions and negotiations that will last until June, when the next state budget is due.