The rising sun illuminates the Statehouse dome, Thursday, Jan. 7, 2021, in Concord, N.H., on the day Gov. Chris Sununu was scheduled to be inaugurated at noon for his third term as governor. (AP Photo/Charles Krupa)

CONCORD — State revenues continue to be higher than expected, and that has Gov. Chris Sununu calling for House budget writers to fund programs he eliminated in his budget proposal.

In a letter to the House Finance Committee, which is working on the $13.8 billion budget he proposed last month, the governor said he originally based his revenue estimates on actual returns through January, but February revenues continue to show improvement over earlier estimates by 17 percent for the first eight months of the fiscal year and 18.5 percent above February estimates.

“Based on these revised revenues, coupled with updated agency lapse estimates, we continue to reduce our projected draw on the Rainy Day Fund to close out the current biennium,” Sununu wrote in a letter to legislative leaders Wednesday. “When the pandemic first arrived this time last year, none of us could have predicted an economic picture as bright as our economic reality today.”

Originally Sununu planned to use about $30 million of the state’s rainy day fund to help balance this biennium’s budget which ends June 30.

The governor said the current trends indicate an additional $70 million in general and education trust funds will be produced over the next biennium.

Sununu set five priorities for the use of the additional money:

Maintain transitional housing services at the Department of Corrections. In his proposed budget, he did not fund the Shea Farm facility in Concord.

2. Return funding for existing positions in the shared services division at the Department of IT.

3. Return funding for family resource centers at the Department of Health and Human Services.

4. Return funding for civilian positions at the Department of Safety.

5. And provide $400,000 for the state’s match for federal funds for the Small Business Development Center at the University of New Hampshire. UNH has hosted the SBDC for 36 years.

“I encourage the legislature to consider this strong positive trend in revenue performance as the budget works its way through the process,” Sununu wrote.

Last week the House adopted a resolution from its Ways and Means Committee for initial revenue estimates for the next biennium that are $67 million less than Sununu presented in his proposed budget last month.

The $70 million in additional revenue would make the gap $137 million with what the House committee believes will be produced over the next two fiscal years.

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February Revenues

February is not a large month for state revenue, while March and April produce much more money for the state due to hefty business tax returns.

For February, state revenues were $120.3 million, or $18.8 million more than budget writers anticipated when they crafted the budget two years ago.

Most of the surplus revenue is from business tax receipts and Lottery Commission earnings.

For the year, state revenues are $1.36 billion, up $147 million over last year, and up $103 million over estimates when $30 million in revenues collected this year are allocated to the prior fiscal year under the state’s annual audit,

Business taxes for February produced $29.4 million, $10.6 million above plan, and Lottery revenue was $19.7 million, which is $10.2 million above plan.

The state’s second largest revenue producer, the rooms and meals tax, continued to be hampered by the coronavirus pandemic.

The tax returned $22.9 million, $3 million below the budget plan. The Department of Revenue Administration said hotel activity was down 24 percent from a year ago, and meals sales down 9.7 percent.

The tobacco tax and real estate transfer taxes continued to perform above estimates while the insurance tax was down $2.1 million for February.

The Highway Fund also continued to feel the pinch of the pandemic down about $3 million in February.

For the year, the fund has collected $161 million, $8 million less than estimates.

The Fish and Game Fund has produced $9.2 million for the year to date, which is $1.6 million more than estimates.

Garry Rayno may be reached at garry.rayno@yahoo.com.

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