By CHARLES M. ARLINGHAUS

A few times a year, the state opens the doors to all its cupboards and lays itself bare to the financial world. A peek inside those cupboards reveals much about our financial state with a bare minimum of disguising political varnish.

New Hampshire, like every other state in the country, borrows money a few times each year. Rather than applying to the bank for a mortgage, we offer bonds for purchase. The bond purchaser loans us money and then receives his or her loan back, bit by bit, with interest.

To assure the bondholder that we are a good financial risk and that he ought to invest, the state publishes a fairly comprehensive description of the current state of its finances in a bond statement. Because this is the equivalent of a loan application, it tends to be factual with almost no political commentary. The bond purchaser doesn’t care how noble you may be. He just wants to know how much is in savings, what you owe, if there are outstanding lawsuits, etc. In other words, is this loan a good risk?

One of the first things we discover from the statement is that the cupboard isn’t quite bare. The state did run a $93 million “operating deficit” in the year ending June 30, but we have money in the bank. The budget is nominally balanced with $65 million of the medical malpractice money a court has already ruled the government can’t take. However, even if the court ruling stands (as it likely will), the state has $76 million in its “rainy day fund” it can tap.

I should note that Grant Bosse did a series for the Josiah Bartlett Center establishing that New Hampshire has no unusual cash flow difficulties and unlike California or the City of Detroit is in no danger of bankruptcy or a cash crunch, regardless of what happens to the malpractice money.

There’s also more semi-good news. The state’s retirement shortfall is a little less horrific than a few months ago. I’ve written before about the state’s $7 billion debt mountain. We have significant unfunded liabilities in our pension system, in post-employment health benefits, and in another benefit category called OPEB. As of the last valuation, those unfunded liabilities had declined to $6.5 billion. Given the rise in asset values since the end of the fiscal year, our combined shortfall has declined further to a mere $6 billion. Consider us downgraded from a nightmare to just a really scary dream.

Our financial presentation to potential bond purchasers also included one of the best big-picture descriptions of the effect of stimulus money on the state budget.

The stimulus money can be divided into two types. The first amounts to the equivalent of a state government bailout — we can use it to offset our state programs. New Hampshire has or will receive a total of $378 million that we can use to supplement tax revenue in three ways: An increased Medicaid match pays for $177.4 million to balance last year’s budget and the current budget; another $164 million will go to the education trust fund and the community colleges and university system as general revenue; the final $36 million of this pool is to be used for whatever we want.

The other 60 percent of the almost $1 billion in stimulus money is dedicated to “specific program purposes that are being administered through state agencies.” In other words, the federal government is spending $584 million on things it has decided are important and is having eight state departments administer the programs.

The biggest single chunk is $235.8 million administered by the state Department of Transportation. This is the “shovels-ready” stimulus spending that was used to sell the program even though it now accounts for only 25 percent of the package.

New Hampshire has actually handled the transportation spending well. We didn’t add $235 million to a 10-year plan that already spent more than we will raise. Instead, we selected projects on our own 10-year plan that met Washington’s guidelines, but that we probably couldn’t afford.

Some reports in the press have suggested an audit of the fiscal year that ended June 30 is late because of highway fund issues. In addition, we’re telling potential investors that an audit will not happen until the Supreme Court rules on the medical malpractice fund taking. The audit will come 30 days after that ruling, not before.

A transparent financial picture is mandatory to sell bonds, but we’re all investors in state government whether voluntarily or involuntarily.

Charles M. Arlinghaus is president of the Josiah Bartlett Center for Public Policy, a free-market think tank in Concord.