Governor Sununu Budget Proposal

by | Feb 19, 2021 | Legislation, Special Alerts

Governor Sununu issued the following overview regarding his 2/10/21 Budget Proposal for 2021 – 2022.
Click here to read the Governor’s Executive Budget Summary.

A Budget for Renewed Strength, Responsibility, and Innovation

Managing Through the Crisis

Managing Expenses and Freezing Hiring: When the economic impacts of the pandemic undercut the strongest economy in our state’s history, New Hampshire took decisive action as it faced an uncertain path ahead. A budget shortfall once predicted to surpass $350 million has been reduced to less than $50 million. The Education Trust Fund is projected to end the biennium with a positive balance and the longstanding highway fund deficit has been substantially reduced. Meanwhile, the Fish and Game Fund is healthier than it has ever been as more Granite Staters recreate, hunt and fish across the state.

Public Health & Medicaid Funding: This budget has not been balanced on the backs of essential workers. Rather, New Hampshire created dynamic programs deploying CARES Act Funds to provide wage enhancements for front-line staff. Further, this budget continues the Medicaid rate increases this administration implemented on January 1, 2021.

Expanding the Recovery

Tax Relief to Benefit Everyone: This budget reduces taxes in every sector of our economy creating tax relief for our citizens. This budget does not create or increase new taxes or fees and is free of a sales or income tax. This budget does not play political games to achieve balance.

This budget reduces the Meals and Rooms Tax from 9% to 8.5%

This budget helps small businesses by reducing the Business Enterprise Tax (BET) from 0.6% to 0.55% and increases the filing threshold to an enterprise value tax base of $250,000 effectively removing the BET filing requirement for as many as 30,000 small businesses in New Hampshire.

This budget helps our seniors and retirees by beginning a full phase-out of the Interest and Dividends Tax over the next five years.

Education Funding: Education Trust Fund is projected to end the biennium with a positive balance totaling more than $50 million. This budget invests $30 million into the Public School Infrastructure Fund. Additionally, this budget makes temporary changes to the Free & Reduced Lunch portion of education adequacy formula in light of COVID-19.

Municipal Revenue Sharing: This budget will allow for up to $15 million in additional revenue for municipalities over the biennium, totaling as much as $78 million by Fiscal Year 2023.

Leveraging Federal Highway Funding: This budget injects $41 million in one-time federal relief funding for state highways passed in December through the Coronavirus Response and Relief Supplemental Appropriations (CRRSA) Act.

Preparing for the Next Crisis

Unemployment Insurance Trust Investments: This budget proposes changes to the Unemployment Insurance Trust Fund to strategically build the Trust during strong economic times to reduce the financial burden on businesses during economic downturns.

Strengthening the Rainy Day Fund: This budget expands the capacity of the Rainy Day Fund by allowing the Fund to reach 10% of the revenue raised over a biennium.

Generational Investments in New Hampshire

Student Debt Assistance: This budget reintroduces the Student Debt Assistance Plan to boost New Hampshire’s workforce in healthcare, biotechnology, social work, and other related fields. This program is funded without taxpayer dollars, and provides almost $10 million in new assistance.

Voluntary Paid Family Leave: Paid Family Medical Leave can be achieved in New Hampshire without an income tax and this budget provides the pathway for that reality. This plan leverages the state’s workforce to create a voluntary PFML plan for New Hampshire’s citizens and reduce premiums in the private market, all while offering business tax credits to boost investment and uptake.

Law Enforcement Accountability: This budget incorporates all recommendations of the Commission on Law Enforcement Accountability, Community, and Transparency under the State’s authority.

Creating the NH College & University System (11 to 1): Included in this budget is the ability to finally combine 11 loosely connected higher education systems into a single post-secondary education experience that fits the needs of a modern 21st-century student. This budget unifies the governance structure on day one and provides a glide path to full integration in Fiscal Year 2023.

A New Department of Energy: This budget refocuses energy regulators on their core mission of just and reasonable rates by combining the Public Utilities Commission and the Office of Strategic Initiatives to form a new Department of Energy.

Reform at the Department of Health and Human Services (DHHS): This budget will require additional accountability at DHHS and includes funding to invest in modernized IT infrastructure. These long-term structural investments at DHHS will provide better outcomes.

Continued Investments in Information Technology: This budget continues the transition to cloud-based services ensuring updated software with the latest security requirements.

Modernizing the Adult Parole Board: This budget reorganizes the Adult Parole Board into a 5-member board and includes funding to digitize the board’s day-to-day operations to save taxpayer dollars.

Unification of State Dispatching Functions: This budget unifies dispatching between Fish and Game and the Department of Safety and provides the opportunity to expand cross-training for dispatchers.

Deploying Federal Funds: As the federal government considers additional money for state and local governments, New Hampshire should prepare to invest any future federal support to one-time projects. New Hampshire should resist the temptation to use stimulus dollars to fund on-going expenses leading to a structural deficit.

Posted by GST Chairman Ray Chadwick.


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