By Charles M. Arlinghaus
From the print edition of the Union Leader

Although the State of New Hampshire was prevented from taking what has always been considered private property in the so-called JUA case, it has come up with a clever scheme to pass convoluted rules that it thinks will allow it to transfer the cash to state control as a partial fix to the state budget crisis. In reality, it merely assures the state will again lose in court and rack up large legal fees.

(CONCORD) Bond market investors continue to see New Hampshire as a safe bet, as they scooped up $150 million in newly issued capital bonds yesterday. State Treasurer Catherine Provencher offered $90 million in tax-exempt state bonds and $60 million in Build American Bonds, which are partially subsidized through the American Recovery and Reinvestment Act.

Provencher tells NH Watchdog that the bond sale was “very successful”.

By CHARLES M. ARLINGHAUS
From the print edition of the Union Leader

It’s hard to pick the biggest problem in state government because the most immediate crisis obscures all others. We spend a lot of time focused on the $600-$700 million budget problem we face in January – as well we should – but it keeps us from noticing the slower growing problems that pose a long term threat. One such problem is the state’s debt that creeps slowly along like an invasive species of plant that will eventually choke out everything else if we don’t notice it soon.

Like most states, New Hampshire divides its budget into an operating budget to pay for regular expenses and a separate Capital Budget used to borrow money theoretically for long term expenses like new buildings or other items that aren’t paid off in just one year.

The governor and legislature pay a great deal of attention to the regular budget, at least the general fund portion of it. However, the capital budget is not often the subject of debate and rancor. Generally, people assume we have to borrow money for some capital expenses and there really isn’t much to debate.

(CONCORD) New Hampshire’s debt has grown by 30% over the last five years. According to official documents provided to potential bond buyers ahead of tomorrow’s planned sale of $150 million in new debt, the General Obligation Debt climbed from $634 million at the beginning of Fiscal Year 2006 to $823 million at the end of FY 2010.

(CONCORD) New Hampshire Treasurer Catherine Provencher is preparing this year’s annual General Obligation Bond Sale four months earlier than last year. The state is preparing to borrow $150 million in General Obligation Capital Improvement Bonds in order to pay for the state’s capital budget, construction projects in the University System, and Building Aid payments for local school construction projects.

According to the Preliminary Official Statement (POS) provided to potential investors last week, the state is looking to sell $90 million in traditional tax-exempt bonds, and $60 million in Build America Bonds. These bonds were authorized under last year’s American Recovery and Reinvestment Act (ARRA), and are taxable, but the federal government provides a 35% subsidy on the interest to the state issuing them. This federal stimulus subsidy brings the effective interest rate of Build America Bonds down to 3.5% to 4%, depending on the market at the time of the sale.

By Charles M. Arlinghaus
From the print edition of the Union Leader

I’ve been telling you for months that we have a budget crisis because we spent money we don’t have yet the governor is running around the state claiming he cut spending. Surely one of us is lying, right? Actually, no. The use of a number of clever accounting gimmicks makes calculating spending more confusing than it needs to be.

Governor Lynch will tell people over the next few months that he cut general fund spending by six tenths of a percent. Yet, I’ve been telling people we have a problem because basic state spending increased by $600 million over four years when revenues declined by $100 million. The difference between those two statements defines our fiscal problem.

(Hillsboro, NH) Federal taxpayers are either spending $220,000 to preserve a unique piece of local history, or they’re throwing money away on New Hampshire’s version of a “Bridge to Nowhere”. An historic bridge that can only be accessed from one side of the river it crosses is being highlighted as a sign of misplaced priorities in the federal stimulus bill.

The Union Leader tops its print edition with a story by correspondent Greg Kwasnik about the use of $150,000 in federal stimulus money to preserve an historic stone arch bridge in this reporter’s hometown of Hillsboro.

By CHARLES M. ARLINGHAUS
From the Union Leader

For more than a decade, education funding has been a constant source of turmoil in the Legislature, finally taking a break only this last session. The silence doesn’t mean the problem is fixed but merely that it’s being ignored until it explodes again next year.

For the last decade, each legislature has played a game of mother-may-I with the state Supreme Court. The court decided that the system we had used for the past 200 years or so was now “unconstitutional.” Every two years, the Legislature would pass another plan, it would be challenged, and the court would say “try again.”

(WASHINGTON, DC) $48 million that New Hampshire lawmakers have already included in the state budget are a step closer to the state, following a key procedural vote in the U.S. Senate. The House and Senate had both rejected bills that extended higher federal funding under the Federal Medicaid Assistance Program (FMAP), but Senate leader put the program into a broader state budget bailout package.

From the print edition of the Union Leader

Most state governments continue to hope for a new federal bailout from Washington to save their finances. New Hampshire should hope Uncle Sam puts the credit card away and does no further damage to the state. Federal bailouts have wrecked the state’s finances and represent a hidden problem no one is paying any attention to.

In recent years, New Hampshire staved off fiscal collapse not by making tough decisions but by loans and handouts. One set of bailout money is the source of next year’s budget crisis. The state used $702 million of one-time revenue to prop up its $5 billion operating budget, about 14% of the total spent. That $702 million includes some borrowing and other sources but $359 million of it is stimulus money from the federal government.