Governor’s 2022-23 budget cuts general fund spending for first time in decade
Gov. Chris Sununu’s proposed 2022-23 state budget cuts state general and education trust fund spending for the first time in a decade.
Strangely, this generally was not the big story in media coverage of the budget.
But it is a big story — because reductions in state spending are extremely rare.
Comparing the governor’s proposal to the current two-year budget, the governor’s plan represents a decrease in budgeted state general and education spending (not total spending — more on that later). That would be the first reduction since the 2012-2013 budget.
How much of a decrease depends on what baseline you use.
The governor’s budget summary shows a general and education fund spending reduction of $40.4 million, or about 0.7%.
That’s based on actual 2020 spending and authorized (budgeted) 2021 spending. (The 2021 fiscal year ends at the end of June, so we don’t have actual spending for the year yet.)
What the state actually spends in a fiscal year is not the same as what the state budgeted for that fiscal year. Typically, the governor manages spending so that some money is left over at the end of the year.
In response to the pandemic, Gov. Sununu got quite aggressive about saving money, as revenues were projected to crater throughout much of 2020.
Comparing the governor’s budget to the 2020-21 budget, the governor’s general and education spending is lower by $108 million.
Such a savings from one budget to the next is highly unusual. Only twice since World War II has a state budget been lower than the previous budget.
Actual spending is a different story. With 4.5 months left in the fiscal year, it’s possible that the governor’s budget will spend more in general and education funds in 2022-23 than the state spent in 2020-21. We’ll have to see how the rest of this fiscal year works out.
If you haven’t had enough caveats, here’s another.
The budget was released Thursday and we haven’t gone through it line by line. We are looking at bottom-line totals. Perhaps a closer inspection will find details that produce… more caveats.
But looking at the bottom lines for budgeted general and education fund spending, this proposal represents a savings to state taxpayers.
This will be confusing if you’ve seen stories that report higher spending in the proposed budget. That’s because total spending includes federal money and therefore is much larger than general and education fund spending.
Basically, the general and education funds spend money raised in New Hampshire from Granite Staters. The total state budget includes billions of dollars in federal funds.
The governor’s budget increases total spending by $712 million, or $5.6%, to $13.36 billion.
The last time total spending went down was also in the 2012-13 budget. In that budget, led by then-House Speaker Bill O’Brien, general fund spending decreased by $536 million, or 18%, and total spending decreased by $1.2 billion, or 11%.
There’s much more to cover in this budget, of course. The governor proposed some substantial reorganizations of several state bureaucracies (including all of higher education), tax cuts (including phasing out the interest and dividends tax), a large increase in health and human services funding, and much more. We’ll do deeper dives later.
For now, the big initial takeaway is the unusual reduction in state taxpayer-financed spending.
