Governor’s packs Consensus Revenue Panel with Democrats

By Grant Bosse on January 23, 2013
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(CONCORD) Governor Maggie Hassan has packed a panel formed to estimate New Hampshire’s revenues with liberal think tanks and members of her own Administration, as she drafts her Budget Proposal for the Legislature. Hassan has tapped members of the New Hampshire Center for Public Policy Studies and the New Hampshire Fiscal Policy Institute to serve on a Consensus Revenue Estimating Panel. The seven-member group meets for the first time tomorrow to begin to estimate how much money the state will have available in its two-year budget beginning July 1, 2013.

Four members of Hassan’s Administration, Budget Director Gerard Murphy, Administrative Services Commissioner Linda Hodgdon, Revenue Commissioner Kevin Clougherty, and Community College Chancellor Ross Gittell will serve on the Panel alongside Dennis Delay from the left-of-center Center for Public Policy Studies and Jeff McLynch from the even more liberal Fiscal Policy Institute.

Manchester attorney Richard Samuels rounds out the group. Samuels has donated predominately to Democratic candidates over the past decade including Hassan’s 2012 campaign. He also contributed to Republican Senator Chuck Morse last year. Gittell, who worked as an economist at the University of New Hampshire before taking over the Community College System last year, has in the past lobbied the Legislature to adopt a broad-based sales tax.

Hassan promised during her campaign to base her budget on the recommendations of a consensus revenue panel, but today’s Executive Order lacks contrary voices that might challenge Hassan, who has backed overly optimistic revenue estimates in the past. The 2007 and 2009 budgets that Hassan helped write as Senate Majority Leader both contained massive revenue shortfalls.

Josiah Bartlett Center President Charlie Arlinghaus criticized the revenue estimates in those budgets as overly optimistic at the time, and authored a column in this morning’s Union Leader urging budget writers to avoid that mistake again.

The budget passed in 2007 created disasters that are still being sorted out. Some of us warned that revenues were overestimated by several hundred million dollars. We were ridiculed for our pessimism. In fact, at the end of the two-year budget, revenues were $384 million short of the budgeted amount. The state finances were in crisis and odd decisions were made.

A shortfall of that size was unprecedented, and the governor looked to unique financial arrangements to borrow money to pay for operating expenses. The problem was not resolved, it was delayed. The next budget wasn’t much better. Operating expenses artificially propped up by money we didn’t have were again propped up with borrowing and a one-time federal bailout. Revenue estimates were again exaggerated to make the budget easier. The shortfall was smaller – a mere $87 million this time – but lawmakers were without a recession to blame for the error.

Hassan has until February 15th to present her proposed budget to the Legislature, but she says the Consensus Revenue Estimating Panel will meet throughout her first term to provide updated estimates to the Legislature.

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