Governor Hassan understands that a balanced budget is the cornerstone of a strong economy and has worked with legislators from both parties to pass two fiscally responsible, bipartisan and balanced budgets since entering office. Both budgets focused on critical economic priorities for New Hampshire aimed at expanding middle class opportunities, priorities such as holding down the cost of higher education, encouraging economic development and strengthening public safety.
In 2013, the Governor worked across party lines to pass a fiscally responsible, balanced budget – without a sales or income tax – that lives within our means while protecting New Hampshire’s economic priorities. The bipartisan budget that Governor Hassan signed into law invested in priorities such as higher education, leading to the first tuition freeze at the University System in 25 years and a reduction in tuition at community colleges; public safety through adding additional state troopers; caring for our most vulnerable; and preserving our natural resources. After a unanimous vote in the Senate and near-unanimous vote in the House, it passed the Legislature as the most bipartisan budget in more than a decade.
After signing the budget in 2013, Governor Hassan took preemptive and preventative actions to maintain fiscal responsibility and to ensure that the Fiscal Year 2014-2015 budget remains balanced and finishes in the black in light of legislatively mandated back-of-the-budget cuts, additional legislatively approved appropriations, and a federal eligibility change that increased enrollment – from mostly children – in traditional Medicaid. These preemptive steps to ensure a balanced budget for Fiscal Years 2014-2015 include Executive Orders freezing generally funded out-of-state travel, hiring, and equipment and reducing Executive Branch expenditures by $18 million, as well as a separate plan to ensure a balanced budget at the Department of Health and Human Services.
Earlier this year, the Governor proposed a budget for the Fiscal Year 2016-2017 biennium that was transparent and honest about how to support critical economic priorities without an income or a sales tax. The Governor’s fiscally responsible plan clearly set those priorities, including holding down the cost of higher education, combatting the heroin and opioid crisis, ensuring access to affordable health care, and repairing our roads and bridges. The Governor fought at every step to ensure fiscal responsibility while protecting against holes in future budgets that would have come at the expense of critical economic priorities like education, health care, transportation, and public safety.
By working with her colleagues in Republican leadership, Governor Hassan was able to forge a fiscally responsible, bipartisan compromise on the budget that protects New Hampshire’s priorities and allows the state to move forward. It is a budget that invests in critical economic priorities laid out in the Governor’s original proposal like holding down the cost of college tuition; combating the heroin crisis, including the addition of two state troopers to combat the crisis; maintaining roads and bridges; and continuing to strengthen and increase access to health care – not just for the next two years, but for years to come.
The fiscally responsible, compromise budget includes business tax cuts on a faster timeline than originally proposed, but it does so with important safeguards for future budgets. The compromise budget implements the business tax cuts in two phases. The first phase of the tax cuts will go into effect immediately, while requiring that certain revenue targets must first be met in order for the second round of tax cuts to occur. The agreement also shifts the timeframe to allow the next legislature to determine what spending or revenue offsets should be made to pay for the second round of tax cuts – before they go into effect.
As part of the compromise, the business profits tax would be reduced to 8.2 percent and business enterprise tax to .72 percent for taxable periods ending on or after December 31, 2016. It also includes a trigger mechanism based on general and education trust fund revenue levels for the Fiscal Year 2016/2017 biennium. If those revenue levels are met, the business profits tax would be further reduced to 7.9 percent and the business enterprise tax to .675 percent for taxable periods ending on or after December 31, 2018, after the next legislature has an opportunity to craft the 2018-2019 budget.
There is much in the compromise budget plan that reflects the priorities Governor Hassan laid out in February, including funding for mental health, combating substance misuse, economic development and public safety. In addition, it includes the previously negotiated, modest cost-of-living pay increase for state employees that was announced in February. New Hampshire’s hard-working state employees and the critical services that they provide make a positive impact on the lives of New Hampshire's citizens each and every day, and including the previously negotiated contract is an important step toward maintaining fiscal responsibility while supporting our hard-working state employees.
While this compromise does not include everything that the Governor originally proposed, particularly additional substance misuse funding and the immediate reauthorization of the bipartisan New Hampshire Health Protection Program, when coupled with the proposed bill, it still addresses the Governor’s major concerns with the budget – the impact of unpaid-for tax cuts. This comprise budget helps New Hampshire move forward as a state, and Governor Hassan remains committed to continuing to work with people across New Hampshire and legislators from both parties to move forward with the reauthorization of the state’s bipartisan health care expansion plan, to build on efforts to combat the substance abuse crisis, and to keep New Hampshire’s economy moving in the right direction.
For more information on the FY 2014-2015 budget, visit the following links:
For more information on the Governor’s FY 2016-2017 budget proposal, visit the following links: