New Hampshire budget doing better than expected, but still faces challenges
(The Center Square) – Halfway through the fiscal year, New Hampshire’s current state budget is doing better than expected in several areas, with some of its biggest revenue months still to come.
In recent hearings by the state House and Senate Ways and Means Committees, the budget deficit was presented in far more sanguine terms than the predictions of $500 million from 2020, New Hampshire Business Review reported. By June 30, which marks the end of the biennium, the budget deficit is predicted to be less than $155.5 million – equalling the state’s rainy-day fund total.
Legislative Budget Assistant Michael Kane said the shortfall could be covered by the rainy-day fund, but that’s up to the Legislature.
“The question is what happens to revenue for the remainder of fiscal year,” Kane said, according to the Business Review.
David Juvet, senior vice president of public policy for the Business and Industry Association of New Hampshire, said the strength of revenues coming in from business taxes is a big surprise.
“The business profits tax and business enterprise tax are exceeding expectations, and that’s pretty remarkable given the impact COVID-19 has had on state businesses,” Juvet told The Center Square.
Juvet said that not all revenue sources are performing as well, noting the rooms and meals tax in particular is, not surprisingly, underperforming.
“But the fact that other business taxes are performing so well takes a lot of pressure off the Legislature, because they won’t have to find revenue that I think they were expecting to need to find because of a deficit,” Juvet said.
This appears to bode well, especially considering the bulk of business taxes, which are the state’s largest source of revenue, is collected in the second half of the year, the Business Review reported. On top of that, 75% of the interest and dividends taxes aren’t paid until the last quarter.
Juvet said that the coronavirus vaccine offered hope for an economic recovery, but it is tempered with uncertainty. He said the biggest challenge remains that what lies ahead is hard to predict.
“We don’t really know when we’re going to be coming out of this health crisis,” Juvet said. “Everyone is relieved that a vaccine is available, but everyone acknowledges it’s going to take a significant period of time for everybody who wants to have the vaccine to be able to get it. And if it’s one thing businesses dislike in general, it’s uncertainty. But there’s a tremendous amount of uncertainty because of COVID-19.”
Disclaimer: This content is distributed by The Center Square
