New Hampshire

State Budget Practice Report Cards and Budget Resource Guide

New Hampshire was one of sixteen states to earn an A average in budget maneuvers for fiscal 2016 through 2018. In doing so, it showed no evidence of deferring recurring expenditures or accelerating revenues, or using other one-time techniques to achieve budgetary balance.

That mark contrasts with the state’s low averages in the budget forecasting and legacy cost categories. In budget forecasting for 2018, New Hampshire received the lowest grade possible, a D-minus, along with Alabama, Missouri, and North Dakota. New Hampshire’s poor showing reflected a lack of information on how it derived its short-term projections of revenue growth. It also failed to employ other fundamental practices, including consensus revenue estimates and multiyear revenue and expenditure forecasts. 

New Hampshire’s insufficient funding of other postemployment benefit costs for public workers, principally health care, contributed to its D average in legacy costs. The accrued liability for these benefits is $2.1 billion, equivalent to almost half of the state’s general fund budget in fiscal 2017. Although New Hampshire has fully funded its actuarially determined pension contributions in recent years, it often fell short in the past. Its pension funded ratio was only 62.6 percent as of 2017, almost six percentage points below the total for all states.

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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 2018 Volcker Alliance report, Truth and Integrity in State Budgeting: Preventing the Next Fiscal Crisis which 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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