Governor Hassan: December Revenues Above Plan, Still Prudent to Plan for Overall Revenue Shortfall

Press Release

While December revenues were strong and significantly above plan, Governor Maggie Hassan said today it is still prudent to plan for an overall revenue shortfall.

"December revenues are an encouraging sign that our economy continues to strengthen, with the meals and rooms tax and the real estate transfer tax continuing to outperform projections. However, revenues from business taxes and the interest and dividends tax remain significantly below the year-to-date plan, and we know that we must continue to take prudent, strategic action to maintain fiscal responsibility and ensure a balanced budget for Fiscal Year 2015."

In light of the projected shortfall in revenue, additional appropriations, and increased caseloads at the Department of Health and Human Services, Governor Hassan has already taken a number of pre-emptive steps to ensure a balanced budget, including issuing an Executive Order reducing Executive Branch expenditures by $18 million and putting in place freezes on generally funded out-of-state travel, hiring and equipment. The Department of Health and Human Services (HHS) will present at the January fiscal committee its plan for ensuring that it balances its budget.

In addition, Governor Hassan announced today that she is recommending two pieces of legislation to close the remaining estimated gap and ensure a balanced budget for Fiscal Year 2015.

The first is a one-time tax amnesty program that will allow taxpayers who fell behind on their tax obligations during the recession to catch up with reduced penalties and interest. Under the proposed legislation, the amnesty period would be from May through July 15.

The state instituted a tax amnesty program in February 1998, receiving $13.5 million in additional revenue, and in February 2002, receiving an additional $14.9 million in revenue. Another amnesty in 2006 that only applied to the real estate transfer tax garnered $6 million.

"As New Hampshire emerges from the recession, this is an opportunity to allow taxpayers who may have fallen behind to catch up with reduced penalties, helping them get out from under the weight of these debts in a fiscally responsible manner for the state," Governor Hassan said.

In addition, another piece of legislation would make approximately $1.4 million in additional general fund reductions to the legislative and judicial branches, as well as to Fish and Game. It also reduces the Health Care Reserve Fund from five percent to three percent, a reduction approved by the state's actuaries, which will save $1.7 million. The legislation would also address a shortfall in plea-by-mail revenue that is used to fund state police detectives.

"Moving forward, I will continue to work with legislators from both parties and our state agencies to ensure a balanced budget for Fiscal Year 2015, while also maintaining our bipartisan commitment to supporting job-creating businesses, expanding middle class opportunity and keeping the State of New Hampshire moving in the right direction," Governor Hassan said.

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