Editorial: Too Much Money; N.H. Lawmakers Confront a Surplus

Well, here’s a change of pace, and a pleasant one at that: New Hampshire legislators face the quandary of figuring out what to do with an unexpectedly large budget surplus.

The books have closed on fiscal year 2013, which ended June 30, and the state ended up with about $76 million in unspent revenue. The sum of money that lawmakers actually have at their disposal is actually much smaller, because the two-year budget they approved this past session anticipated a surplus and counted on transferring about $57 million to pay for services in the current fiscal year. Still, that leaves about $19 million available for, well, whatever lawmakers choose — a radically different exercise from the budget-cutting that has been the standard legislative theme of the last five or so years.

The initial reaction was predictable, which is to say that Republicans tended to favor tucking the extra money into the rainy day fund, and Democrats inclined toward spending at least some of the surplus on human services that have suffered cutbacks.

Sen. Jeanie Forrester, the Republican Finance Committee chairwoman who represents a half dozen towns in Grafton County, said the unexpectedly large surplus presents an excellent opportunity to replenish the cash buffer the state has depleted and will be sure to need when the budget cycle leaves the state strapped for revenue. That’s not just fiscally prudent, Forrester said, it also would improve the state’s chances of having its bond rating upgraded — something that could save the state over the long run. Others who favor a more cautious approach note that a sizeable portion of the surplus results from one-time gains — undermining its value as a revenue source for programs that need to be sustained.

Gov. Maggie Hassan and other Democrats argue in favor of using some of the money to restore the $7 million that was taken out of the Health and Human Services budget at the end of the budget process. In disputing suggestions that this might be recklessly optimistic about budget trends, they note that initial reports about the new fiscal year are encouraging — state income was $27 million above projections in the first quarter. And anyone familiar with the budget cutting that has occurred in recent years realizes that spending $7 million would be only a start toward restoring services vital to many of the state’s most vulnerable residents.

“To say that we should take our surplus and keep holding it away when we’ve really been forced in these cuts to keep trimming and trimming to the bone in these services, it seems egregious,” said Catherine Hogan, the director of development and community relations at the Visiting Nurse Association and Hospice of Vermont and New Hampshire based in Lebanon. “If there’s excess, please, bring it back.”

One thing about this clash of competing goods — budgetary prudence vs. adequate human services — that is particularly striking is how different its tone is from budget battles in Washington. To be sure, New Hampshire legislators are not immune to partisanship and acrimony, but it is noteworthy that both sides acknowledge the legitimacy of the other’s priorities. Just as House Minority Leader Gene Chandler said he would be willing to consider increased spending, Rep. Laurie Harding, the Lebanon Democrat who is vice chairwoman of the Health, Human Services and Elderly Affairs Committee, granted that restoring the rainy day fund would be prudent.

It’s possible to imagine the two sides negotiating a perfectly sensible compromise, which seems to place them in a different universe from their Washington counterparts. Speaking of which, the longer the budgetary deadlock continues in the capital, the greater the likelihood the economic fallout will undermine economic prosperity and make difficult choices about how to spend future surpluses unnecessary.