Entries by Editorial Staff

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Fiscal Management Starts at Home

The incoming Senate and House have their work cut out for them when it comes to the state budget. The economic downturn, coupled with decisions on the parts of both the Legislature and the Governor, have left a $700 to $800 million dollar hole in the budget. The Legislature, while looking for cuts in other departments, which resulted in hiring freezes and layoffs, increased its own budget faster than the budget overall. Given current revenue forecasts, overall spending will have to decrease. The Legislative Branch, having seen the largest increases, has much more room to cut than other departments. Though the Legislative Branch accounts for less than 1% of the budget, it is crucial for legislators to lead by example

Apples to Apples Budget Comparison

This is the latest version of our spreadsheet comparing state spending in 2008-09 to 2010-11. Because $248 million of general fund spending was moved offline, apples to apples comparisons are not obvious from official documents. Using official state data, we compare the same spending from 2008-09 with the same spending in 2010-11 despite label changes […]

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The Fiscal Collapse of a Once Proud State

Not too long ago we believed in balanced budgets. But that’s all changed. Other states made the tough decisions. We did not. Today the State of New Hampshire is just another failed enterprise hoping the federal government will cut them a check before the debt capsizes that ship.

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Wishful Thinking Outnumbers Cuts and Tax Increases in New Hampshire Budget Package

Borrowing, transfers, and wishful thinking draw the actual spending cuts and tax increases included in a $295 million budget deal unveiled Tuesday, June 8 at the State House.

House and Senate budget writers have crafted a package that includes nearly $72 million in spending cuts, which doesn’t include an $18.5 million increase in HHS spending. It also contains $4.99 million in tax increases, $51.21 in lapses and transfer among state agencies, $65 million in borrowing, and $112.87 million in speculative revenues that may never be realized.

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Measuring The Revenue Shortfall Revenue on track to fall $84.8 million short in first half of budget

Summary: Using a historical projection model, state revenues can be projected to fall $84.8 million short of the amount budgeted to balance spending in the first year of the two-year budget. Revenues in the second year of the budget are built off the first year’s projection plus 2.2% growth over that base. At that rate of growth, revenues would be an additional $86 million out of balance in the second of the two budget years. The combined revenue shortfall of $171 million is the largest component of a budget deficit greater than $250 million that legislators must resolve to balance the state’s finances.

Why do gas prices spike in the Spring?

As noted in last post, gas prices always spike seem to spike in the spring. Why is that?

Well, there are several reasons. The first are the basic laws of supply and demand. With nicer weather, people tend to drive more, increasing the demand and thus the price.

The second is what is called the Seasonal Gas Transition. Taking effect in 1995, amendments to the Clean Air Act of 1990 mandated a different formulation of gasoline for the summer months, colloquially known as the ‘summer blend’ to cut down on pollution. Changing output from summer to winter blends of fuel is not as easy as flipping a switch. Rather, the refinery must often shut down completely in order make the change over.

In addition, the summer blend mandates a lower percentage of Butane in gasoline for environmental reasons. The Butane is replace with more expensive ingredients, further boosting the price.

The summer blend also reduces the mileage per gallon, further increasing demand on gas to travel the same distance.

Perhaps most troubling is that different areas have different blend requirements, meaning that surplus fuel in one area can not be easily shipped to a deficit area, resulting in potential large regional price differences and giving oil companies distorted market power than they otherwise would have. This could be easily solved by doing away with these variations entirely or at the very least parring them down to a more reasonable number.

The actual cost of the summer blend is difficult to calculate and as a result, there are a wide range of opinions as to the exact cost. Estimates range from $.01 to $.15 per gallon.

February Foreclosure Filings decline in NH, Nationally

Today RealtyTrac released its February foreclosure data, which showed a slow down in filings both here in New Hampshire as well as Nationally. Foreclosure filings are the number of properties that either receive a default notice, a foreclosure auction notice or are repossessed by the bank.

New Hampshire saw filings drop from 1053 in January to 737 in February, a 30% drop. Nationally filings fell 2%. It should be noted that January was a exceptionally high month do to the end of the moratorium on foreclosure filings by many major banks as a result of the robo-signing scandal. With January excepted, February’s figures are only slightly higher than the monthly average over the last 12 months.

Sales of homes in some state of foreclosure fell as well, from 223 to 80.