1 “…to raise new ideas and improve policy debates through quality information and analysis on issues shaping New Hampshire’s future.” Board of Directors Todd I. Selig, Chair Michael Buckley John D. Crosier, Sr. William H. Dunlap Sheila T. Francoeur Chuck Morse Stephen Reno Stuart V. Smith, Jr. Donna Sytek Brian F. Walsh Kimon S. Zachos Martin L. Gross, Chair Emeritus Staff Steve Norton, Executive Director Ryan Tappin Cathy Arredondo What is NH?
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3 The History (and Future) of State Budgets In One Slide
What do the Economists Say? “We’re on the way back up.”
Rosier Projections by NEEP
Employment in Portsmouth 6 Source: ELMI, NH Economic Conditions (April 2010)
7 Myths are Barriers to Informed Policy
8 Myth #1 We are a state of natives who have been living here for 100s of years? Source: 2000 Census
9 Myth #2 We are OLD? Median Age Oldest? Maine = 42 Youngest? Utah = 29 Average of US = 37 New Hampshire = 40 NH Rank = 42 Percent Over 65 Oldest? Florida = 17% Youngest? Alaska = 7% Average of US = 13% New Hampshire = 13% NH Rank = American Community Survey 3-Year Estimates 2008 Census Population Estimates
10 Myth #3 A State of Small Businesses? Department of Employment Security, 1 st Quarter 2008 All Employment, Incl Government
11 Myth # 4 The Brain Drain? New Hampshire Age Specific Net Migration, 1990 to 2000
12 Myth #5 – Tourism Drives Our Economy? Manufacturing brings in 4 X as much $ as tourism Source: Larry Goss, Plymouth State University
13 Economic Development as Good State Budget Policy Source: US Bureau of Economic Analysis
14 Budgetary Impact: Long Term Economic Development Questions Maintaining Competitive Advantages –Educational Attainment –Demographic Change –Housing Prices Mitigating Competitive Disadvantages –Energy Costs –Healthcare Costs
Where Will Future Growth Occur? Portsmouth
Jobs / Economy Changing in Portsmouth
The Budget Process and Biennium June 30 th, 2010 July 1 st 2009 You are here June 30 th, Biennium
36% 8% 15% New Hampshire The Nation California Budget Deficits (2009) New Hampshire The Nation California
The Budget Process and Biennium June 30 th, 2010 July 1 st 2009 You are here June 30 th, Biennium
Closing a $295 Million Gap in 2010 Major Components of 2010 Changes –$25 million in UNH bonding of capital maintenance costs –$80 million advance from 2011 ARRA Revenues –$25 million in executive order savings 2010 changes represent an effort to move problem off into future, largely 2011.
Closing a $295 Million Gap in 2011 Significant Uncertainty Monetization of Assets FMAP Extension DHHS Reorg $239 Million in Changes
Future Gap Use of one time monies creates future funding gap ( )
How Big a hole in 2012? Potentially VERY big, with some mitigating factors –Federal response (is ARRA $ one-time only?) –Economic recovery Three high risk spending areas –Education Adequacy –Retirement System –Social Services Demand
And the Potential Response? Spending Reductions Shifting the Burden Revenue Options