New Hampshire seeks spending cuts amid COVID-19 concerns
New Hampshire Gov. Chris Sununu is preparing contingency plans as the COVID-19 pandemic threatens state revenues.
Sununu sent a letter Friday to state Rep. Mary Jane Wallner, D-Concord, who chairs the New Hampshire House Joint Legislative Fiscal Committee, stressing the need to prepare for cutting expenses because of potential negative economic impacts resulting from the virus. The Republican governor said he asked all of his administration’s department heads to formulate plans for immediately reducing expenditures and identifying long-term savings.
“We need to begin making preparations and taking actions now to ensure that our budget remains balanced in the face of a likely decline in revenues,” Sununu said in his letter. “We must be prepared to make adjustments as the full extent as the full disruption of COCID-19 are understood, including its impact on travel and tourism, trade and business revenues.”
New Hampshire revenues are mainly generated by property taxes since the state has no sales or income tax. The Granite State’s general obligation bonds are rated Aa1 from Moody’s, AA-plus from Fitch Ratings and AA from S&P Global Ratings.
As of Sunday afternoon, New Hampshire had 13 diagnosed COVID-19 cases, which more than doubled from six reported before the weekend. Sununu issued an emergency order Sunday closing all public schools statewide through April 3 while directing them to transition into remote learning. Many of New Hampshire’s ski resorts are also suspending operations.
“As this virus has shown, no one can predict what priorities may change in the next 18 months,” Sununu said. “Time and flexibility will be needed to understand where spending adjustments might be possible and what reductions might be made without disrupting core services.”
Sununu and state lawmakers forged a compromise $13 billion budget last September following a two-month battle stemming largely over future of the state’s business tax rates. The finalized fiscal plan triggers a drop in the business tax rate in 2021 if revenues are more than 6% over projections for the 2020 fiscal year. Sununu previously vetoed a Democratic-backed budget before the June 30, 2019 deadline that would have phased out business tax cuts enacted in 2015.