Capital Comments: NH Revenues Up in Nov. Yet Caution Advised

By State Senator Bob Odell

There were no major legislative activities in Concord last week as the focus is shifting to the quiet period around the holidays.  That is the way it should be.  Legislators should take breaks from time to time so that we do not lose our perspective on what is important to our communities and citizens.

The committee studying the closure of courts in Claremont, Colebrook and Milford did meet.  This time the committee heard from the Commissioner of Administrative Services and her court facilities manager.  The Judicial Branch of state government, the courts, does not operate the dozens of court facilities across the state.  Part of the Judicial Branch budget is allocated for operations and maintenance of court facilities, but the management of those responsibilities is assigned to the Department of Administrative Services.

The key point last week was the $450 thousand dollar contract that is anticipated being signed in the very near future.   This contract is for an evaluation of the current court facilities and recommendations on what the courts will need in the years ahead.  The goal is to have a completed study and report in September, 2010.

I sense that committee members feel that if we are engaging in a major study of the courts, including their locations, why would we pre-empt those study findings and recommendations by closing three courts on June 30th, less than three months before the report is due.

Next step, Rep. Peter Leishman (Peterborough), the committee chair, will draft and circulate a committee report with legislative recommendations.  The Department of Administrative Service representatives said there is a real urgency in getting action by the legislature as the department needs to sign lease renewals soon if the legislature decides to keep the courts open.  Without legislative action and funding for leases, the courts will likely close.

*   *   *

Another legislative study committee has been looking into the state school building aid program.  A couple of weeks ago the committee discussed an immediate suspension of the program until the criteria for disbursements could be reviewed.  Some feel the growth of expenditures for school building aid has been rising at a rate that cannot be sustained.

A suspension would have stopped projects that have been in development for years.  But given the legislative schedule, it was unlikely votes on a suspension could have taken place for a couple of months.  Information the committee was provided suggested there were $450 million of projects in the planning stages.  A review by a committee member, Senator Peter Bragdon (Milford), found that up to $250 million was for projects that are not going forward at this time.  Thus, if accurate, the need for a suspension is dramatically lessened.

In the end, the committee unanimously not to recommend a suspension of building aid for now.  That is good news for local school district projects coming up for voter approval next year.

Some of us believe that a suspension is unnecessary.  The legislature, if it desires, needs to adjust the factors that determine how much school districts will get for future building aid.  That is our job and we should do it next year.

*   *   *

The state had some good news based on revenue in November.  For only the second time in the calendar year, actual revenue exceeded the budget plan for the month.  Revenue was $90.4 million, $6.6 million above the $83.8 revenue goal in the budget for the month.  And revenue was $22 million over the same month in 2008.

There needs to be much caution about what otherwise would be encouraging numbers.  December is the lowest revenue month of the year with few corporate and interest and dividend tax filings.

And the state for the fiscal year that began on July 1 is underperforming.  Revenue for that period, July through November, totaled $676 million but that is $31 million below the state plan but more than $17 million ahead of the same time period last year.

As Chair of the Senate Ways and Means Committee, I feel November revenue combined with the recent state and regional decline in unemployment should be viewed with optimism. After all, we have waited many months for improved employment and revenue numbers.

Concern remains for budget watchers as it was business taxes that carried the day in November.  An underlying problem for December is the stack of tax refunds that must be deducted from business tax revenue this month.  Plus, most other revenue streams like the meals and rooms tax, communications tax, interest and dividends tax, profits from the Lottery Commission and the real estate transfer tax all fell below projections last month.

The recession has been tough on every sector of the economy.  State government is no different and while there was a bit of light in November, big revenue months lie ahead.  Those months will determine if income will equal expenditures and give us a balanced budget for the fiscal year that ends next June 30.

*   *   *

What is one of my favorite things to do at Christmas?  I thoroughly enjoy going to the Area Choir performances in early December every year.  This year was like those in the past.  It was beautiful music sung by neighbors and friends coming from a couple dozen churches performing in the always beautiful, South Congregational Church in Newport.  The choir has been doing this for 56 years.

NH State Senator Bob Odell (District 8) is chairman of Ways and Means, a member of the Energy, Environment and Economic Development Committee, and the Finance Committee. Senate District 8 comprises: Acworth, Alstead, Charlestown, Claremont, Gilsum, Goshen, Langdon, Lempster, Marlow, New London, Newbury, Newport, Roxbury, Stoddard, Sullivan, Sunapee, Sutton, Unity, Walpole, Washington and Westmoreland.

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