Business & Economy

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Phil Sletten is the research director at the New Hampshire Fiscal Policy Institute, a nonprofit, independent policy research group in Concord that examines the state budget, New Hampshire's economy, and policies impacting Granite Staters, especially those with low and moderate incomes.

By: Phil Sletten, Research Director, NHFPI

As part of the New Hampshire Fiscal Policy Institute's 10 County State Budget tour, my colleagues and I journeyed across the state to cover the essentials of the State Budget - its makeup, funding sources, links to local property taxes, effects on household affordability statewide, and related topics.

Four opportunities remain to take part in these discussions. Find details on the upcoming sessions in Laconia, Newport, Portsmouth, and Gorham through the NHFPI website.

Echoing the dedication of New Hampshire residents, our tour showed Granite Staters to be highly involved, committed, and enthusiastic about how the State Budget and legislative choices in Concord shape daily lives and local communities. Here are some recurring questions on budget mechanics, along with key insights.

Where does the funding originate, and is it adequate?

Numerous participants zeroed in on revenue sources for state and local governments, beyond just spending priorities, questioning if collections suffice for essential needs.

New Hampshire draws substantially from federal aid, like other states, plus business taxes, levies on meals at restaurants and hotel stays, education property taxes at the state level, cigarette taxes, liquor and lottery sales, real estate transaction taxes, and various minor fees and assessments. Recent business tax rate cuts, elimination of the interest and dividends tax, and tweaks to other streams influence available funds.

Legislators must craft a balanced annual budget, so drops in one revenue area require offsets elsewhere or cuts to programs. Such choices spark debates on fiscal longevity and quality of life, particularly with rising expenses in health care, education, and infrastructure.

How is the State Budget organized?

Curiosity abounded about the budget's framework and rationale.

The State Budget comprises two distinct bills. The Operating Budget Bill (House Bill 1 or HB 1) allocates most funds with detailed line items, much like a household ledger. The Trailer Bill (HB 2) supplies the supporting policy provisions for HB 1. State agencies initiate the process by submitting funding requests to meet their mandates and service obligations. The governor crafts a draft from these, the Legislature revises it, and it heads back to the governor for review and typically approval.

Budget outlays fall into six primary areas: Health and Social Services, Education, Justice and Public Protection, Transportation, General Government, and Resource Protection and Development. Roughly two-thirds concentrate in Health and Social Services plus Education. Shifts among services occur rarely, mainly during agency restructurings. Categories can seem broad - for instance, the Lottery Commission falls under "Education" since its proceeds support schools.

People also asked about handling surprises or post-budget adjustments. The state taps its Rainy Day Fund or revises the budget amid recessions or crises, as in the 2007-2009 downturn. For routine tweaks, the Joint Legislative Fiscal Committee and Executive Council collaborate with agencies.

Where do funds flow, and who gains?

Detailed inquiries often targeted fund allocation and beneficiaries.

Attendees sought ties between state policies and local outcomes. Notably, around 44% of the budget supports the New Hampshire Department of Health and Human Services. Federal initiatives, especially Medicaid, boost this via matching funds for qualifying costs. Education aid remains a hot issue, with enrollment declines from demographic shifts altering per-community distributions.

The NHFPI State Budget tour offered Granite Staters a prime chance to network and get straightforward answers on fiscal matters. Strong attendance underscored residents' engagement with state affairs. Informed participation strengthens us all.

Four opportunities remain to take part in these discussions. Find details on the upcoming sessions in Laconia, Newport, Portsmouth, and Gorham through the NHFPI website.