NH State Revenue Post-Covid
by GST Secretary Dan McGuire
April state revenue numbers are in and they were horrible, roughly $80 Million (22%) below plan.
April is traditionally the highest revenue month due to April 15 business and interest & dividends tax filings.
That deadline was extended to July 15, so it is expected that some of the shortfall will be made up later.
On the other hand, the rooms & meals tax was “only” down $12M or 43%. A lot of that is because some March revenue is collected in April, so we can expect May’s number to further fall off the cliff.
What if the state experiences three months of 20% lower revenue and a six-month recovery to plan?
That is like a year of 10% less revenue than expected, or a shortfall of about $300M.
With 13 months left in the biennium, the state needs to cuts its expenses by $25M per month right away.
That’s 4,000 fewer state workers, far from the 160,000 private sector workers who have lost jobs so far.
The longer this is put off, the more difficult the problem gets.
It appears the extra $1.25 Billion the federal government sent to the state is four times the shortfall.
But that won’t solve the problem, however, as the governor has said that this money can only be used for Covid expenses, such as increased payments to front-line health workers.
It is not there to back fill lost state and local revenue.
Businesses have had to discover their “essential” worth, or lack thereof, during the shutdown.
Look forward to cries of “You can’t cut us!” and “We’re essential!” from the public sector.
Posted by GST Secretary Dan McGuire