New Hampshire

State Budget Practice Report Cards and Budget Resource Guide

New Hampshire’s mix of B and D average grades for fiscal 2015 through 2019 reflects a state that carries out some budgetary practices relatively well and others poorly. Its D average in budget forecasting, for example, was driven partly by revenue and expenditure projections that failed to extend farther than the biennial budget. In 2018–19, New Hampshire also lacked explanatory information for its short-term revenue growth projections in the governor’s biennial executive budget summaries or the monthly revenue reports from the Department of Administrative Services.

The state’s D average in legacy costs, which include public worker pensions and other postemployment benefits (OPEB), primarily health care, shows a disparity in retirement funding practices. While New Hampshire made annual pension contributions on an actuarial basis, it did not do so for OPEB, which had a net liability of $1.8 billion as of June 30, 2019. That year, New Hampshire’s pension funding ratio was 66 percent, 5 percentage points below the total for all states.

In the remaining three categories, New Hampshire fared better. In budget maneuvers, it averaged B. While it avoided one-time actions to balance budgets in 2016–17, it used transfers from special funds in the following two years. In 2019, $146.3 million of New Hampshire Liquor Commission profits were used for general fund expenses.

New Hampshire’s B in reserve funds reflected its lack of consideration of revenue volatility in policies governing the Revenue Stabilization Reserve Account, a shortcoming shared with twenty-nine other states. That fund held $115 million in fiscal 2019, equivalent to 7.7 percent of general fund expenditures, up from $22 million, or 1.7 percent, in fiscal 2015. 

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To emphasize the need for clear and comprehensible budgets to inform citizens, promote responsible policymaking, and improve fiscal stability, the Volcker Alliance in 2016 began a study of budgetary and financial reporting practices of all fifty states. The Volcker Alliance’s mission is to improve the effectiveness of the administration of government at all levels. Making state budgeting more transparent and accountable is an important part of that goal.

The report cards presented here are taken from the 2021 Volcker Alliance report, Truth and Integrity in State Budgeting: Preparing for the Stormwhich proposes a set of best practices for policymakers. For those wishing to gain greater insight into state fiscal issues, the accompanying budget resource guide is derived from the Alliance publication State Budget Sources: An Annotated Guide to State Budgets, Financial Reports, and Fiscal Analyses (2016). 

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