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For the first time in a long time, New Hampshire is looking at a state budget surplus coming into the final weeks of the state fiscal year, which ends on June 30th. At present, it looks like state revenues are running about $80 million in the black, and there are some projections out there that say the number could turn out to be as high as $100 million before the fiscal year ends. Although there are a lot of differences of opinion between legislators on each side of the aisle concerning what should be done with the surplus funds, one point of consensus is that the State's Rainy Day Fund needs to be beefed up. Rating agencies apparently would like to see at least $150 million sitting in that Fund, and legislators would like to get the fund into that neighborhood because that would bolster the State's bond rating and therefore serve to reduce what it costs the State to borrow money over the long term. That obviously would be good news for taxpayers (and since businesses provide a major chunk of the State's revenue stream, this would naturally be a boon on the business side).
During yesterday's Senate session, Senate President Chuck Morse proposed an amendment to HB 1527 that would remove a cap on the amount that can be placed in the Rainy Day Fund in any given year (currently the law allows only 5% of general fund revenue to go into the Rainy Day Fund in a single year). The cap was put in the law at least several years back, but it seems to have gone largely unnoticed until this year (which tells you something about the state of the revenue situation during the intervening years).
Yesterday's proposal had bi-partisan support. Not only did Republicans and Democrats alike take the floor to praise the amendment, but the Senate then took the rather unusual step of conducting a full roll call on a bill that would be passing unanimously ((typically, bills that are going to be passed unanimously or by a large margin are voted on simply by a general voice vote that does not reveal which way individual Senators vote; the roll call on this bill gave each Senator the chance to be individually recorded as being in favor). The Governor then issued a press release applauding the Senate vote.
We don't expect to see a conclusion to these discussions until we get closer to June 30th. But it is a refreshing change to have the State looking at what to do with a surplus, rather than trying to figure out what needs to be done to address a looming deficit.
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