Entries by Editorial Staff

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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.

April 19, 2010 by

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.

March 29, 2010 by

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.



March 15, 2010 by

I-93, New Hampshire Ten Year Highway Plan and the Federal Highway Bill

While originally on the deferred project list for the New Hampshire Ten Year Highway Plan, the I-93 widening projects for Exits 2 and 3 are back in the plan.

The House Public Works Committee placed the projects back into the plan based on events in Washington concerning the Federal Highway Bill. When the Governor’s proposal was being put together, the conventional wisdom coming from Washington was that there would probably be a 33% cut to Federal Highway money given to the states. The New Hampshire Department of Transportation, rather than using optimistic numbers, appropriately decided to use a conservative estimate in their planning.

While this initially left the Exits 2 and 3 off the 10 Year Plan, they were placed at the top of the deferred list, meaning that in the event of more funding, they would be returned first to the Plan.

With the US House plan that sought cuts not moving forward and a US Senate Plan that provided a two year extension at current levels of Federal funding for the states heading for a vote, the NH Public Works Committee amended the 10 Year Plan and added the Exits 2 and 3 projects back. However, the amendment added the caveat that should Federal Funding not be the same as last year, then the Exit 2 and 3 projects would be removed.

The US Senate version of the Federal Highway Bill passed the body today and it is uncertain which direction US House leadership will take on the bill. Current authorization to tax runs out on March 31st, so both bodies must agree to a plan by then.

Luckily here in New Hampshire, the State Senate does not have to vote on a 10 Year Plan until after the Federal Highway Bill has passed, so they will be able to work with concrete Federal Funding figures, rather than projections.

March 14, 2010 by
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Don’t Enact Failed Bureaucracy Thirty States Repealed

The current legislature and governor are pushing us to establish a new government agency to control hospitals by setting prices and overseeing hospital management. Similar bureaucracies have been abandoned in more than thirty states that tried them. That model cannot be replicated here without spending more than $100 million that we don’t have.

March 3, 2010 by
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Don’t Enact Failed Bureaucracy Thirty States Repealed

The current legislature and governor are pushing us to establish a new government agency to control hospitals by setting prices and overseeing hospital management. Similar bureaucracies have been abandoned in more than thirty states that tried them. That model cannot be replicated here without spending more than $100 million that we don’t have.

March 3, 2010 by

Substance Over Soundbites Because we shouldn’t choose a President from 30 second soundbites Join us for a series of substantive policy discussions with the Presidential Candidates and other policy leaders No time limits.  No subject limits.  In-depth follow-up questions. The deepest discussions of public policy of the campaign. Sen. Rand Paul On behalf of Congressman […]

January 4, 2010 by

Verizon Wireless Arena Bonds State Revenue Sharing Decision could Endanger Manchester Arena

The state’s decision to freeze revenue sharing under the Meals and Rooms Tax could endanger the financing for the Verizon Wireless Arena in Manchester. Last week, Moody’s Investors Services downgraded the bonds used to fund the arena, held by the Manchester Housing and Redevelopment Authority, from Baaa3 to Ba2. The lower rating puts the bonds in “non-investment grade” or “junk bond” status, meaning they have only moderate security of future repayment. Manchester Mayor Frank Guinta notified Governor John Lynch of the decision in a letter on Friday.

November 9, 2009 by
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Tax Summit and Spending Summit Presentations: The $625 Million Problem

In October, state legislators held a tax summit and a week later held a spending summit. Charlie Arlinghaus’s presentations to each gathering are attached here. Arlinghaus outlined the state’s only two successful modern attempts at tax reform in 1970 and 1993 and warned legislators that reform attempts will only be trusted if revenue neutral. At the spending summit, he pointed out a $200 million deficit in the current budget and warned about a $625 million deficit lurking in the next budget.

Spending Outlook

Taxes and the Economy

October 27, 2009 by