Using a recently released report from the Department of Administrative Services and its own independent investigation into the data, the Josiah Bartlett Center is publishing a series of stories on its investigative journalism website, NewHampshireWatchdog.org. Monday:  NH state workers drive 1.5 million personal miles a year Tuesday: NH takes the keys from Liquor Commissioners Wednesday: [...]

The oft cited growing unfunded liability, pegged at the end of last fiscal year at $3.7 billion, has been the driving force behind pension reform in Concord. This shortfall is not just a result of poor investment returns from the recent recession, rather it is systemic. Every year, for the past ten years, the dollar value of the unfunded liability has increased. Even in years with double digit investment returns, liabilities continued to out pace the growth of assets.

With mounting unfunded liabilities in their pension systems, made worse by the recent economic turmoil, many states have begun looking at other retirement benefit options. In recent years, policy makers in a number of states have turned away from the pure pension model, instead opting for plans that are not only fair to the employees but also free the taxpayers from being left with the bill for huge deficits. Given the scale of the pension funding crisis, several reform minded states have instituted a variety of systems to replace their pension systems, which are outlined in the following paper.

Pure Defined Contribution System:

A pure defined contribution system functions in the same way as a private sector 401(k) does. However, rather than having employee contributions matched by the employer up to a certain percentage of salary, state plans tend to fix the contribution rates, similar to a defined benefit plan. Under a defined contribution plan, all of the risks and rewards of the investments are placed with the employee. Due to this shift in risk from the employer to the employee, there will never be an unfunded liability under a defined contribution system because there are no liabilities other than the initial contribution by employers.

In 2008, New Hampshire joined a ten-state regional compact designed to reduce greenhouse gas emissions through a cap-and-trade program on electric generation facilities. This report examines how that program has been implemented in New Hampshire over the past two years, how much revenue has been generated from the sale of carbon allowances, and how New Hampshire officials have spent that money.

With ten of the twelve months of revenue collected for Fiscal Year 2011, revenues are on track to be $54.6 million short of the budgeted amount. The shortfall will not only require action to balance the last budget but also reduces the base used to project revenue growth for the 2012-13 budget currently under consideration.

January 2011 Charlie Arlinghaus on Understanding the State Budget and Current Shortfall. Grant Bosse presented on Growing State Debt Shortfall. Rep. David Campbell outlined State Transportation Spending . and Rep. Ken Hawkins explained The State Retirement System.   Please note that each file is a large pdf file and may take a few moments to [...]

The incoming Senate and House have their work cut out for them when it comes to the state budget. The economic downturn, coupled with decisions on the parts of both the Legislature and the Governor, have left a $700 to $800 million dollar hole in the budget. The Legislature, while looking for cuts in other departments, which resulted in hiring freezes and layoffs, increased its own budget faster than the budget overall. Given current revenue forecasts, overall spending will have to decrease. The Legislative Branch, having seen the largest increases, has much more room to cut than other departments. Though the Legislative Branch accounts for less than 1% of the budget, it is crucial for legislators to lead by example

After months of discussion about the exact size of the historic deficit we face next year, the news is filled suddenly with reports of a surplus. Did something change or are we just in the middle of election season? The short answer is things haven’t changed but the easiest distraction from bad news is to ignore it completely. The deficit is still huge. It will dominate the state’s financial future. And, paradoxically, we have a mid-budget surplus for the same reason we face a huge deficit.