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Wednesday, August 6, 2014

Hassan puts large spending on hold after state revenues sink

CONCORD – Gov. Maggie Hassan said she’s directed that large state spending plans be put on hold after state revenues took another dip last month.

State taxes and fees brought in $98 million or 25 percent less that came into coffers the same month a year ago. ...

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CONCORD – Gov. Maggie Hassan said she’s directed that large state spending plans be put on hold after state revenues took another dip last month.

State taxes and fees brought in $98 million or 25 percent less that came into coffers the same month a year ago.

Administrative Services Commissioner Linda Hodgdon said much of the shortfall was because in July 2013 there was a windfall in cigarette taxes as wholesalers stocked up on product just before a tax increase kicked in.

But Hassan said in a statement slumping revenues from business taxes and the state tax on stock dividends and bank account interest call for stronger spending controls.

“As we recast our revenue estimates for 2015, I will be directing state agencies to put all potential large expenditures on hold, and the spending, out of state travel and hiring freezes that I enacted earlier this year will remain in effect,” Hassan said in a statement. “I will be working with agency heads to identify other potential steps to ensure a balanced budget.”

While it’s not a big month for the state’s two main taxes on business, both were off $5 million, or 23 percent, in July compared to the same month ago.

The 5 percent tax on interest and dividends likewise brought in 25 percent less than July 2013.

Hassan, a first-term Democrat, blames much of the shortfall on business and investment tax breaks the Republican-led Legislature granted in 2011 and 2012.

Senate Republican leaders fired back Tuesday defending support for those tax breaks and blaming Hassan for excessive state spending that has put the state budget at risk.

“This is not a result of creating business incentives to grow jobs. This is the result of the Governor filling every vacant position and, we assume, not meeting budget reduction targets since she refuses to release them,” said Senate Majority Leader Jeb Bradley, R-Wolfeboro.

Hassan called for a meeting of her panel of revenue estimating experts and urged legislative committees to work on their own updates.

“We must continue to work together across party lines to address these revenue trends and responsibly manage the state’s budget while protecting our bipartisan priorities,” Hassan said.

Kevin Landrigan can reached at 321-7040 or klandrigan@nashuatelegraph.com. Also, follow Landrigan on Twitter (@Klandrigan).