Gov. Lynch Delivers Spending Cuts As National Economic Downturn Continues

By Brian Lawson, PolitickerNH.com Reporter

For Immediate Release:                                  Contact: Colin Manning
Friday, November 21, 2008                                       (603) 271-2121

Gov. Lynch Delivers Spending Cuts As
National Economic Downturn Continues

Fiscal Committee Approves Financial Strategy As Part of Continuing Efforts to Address National Economic Slowdown

CONCORD - Gov. John Lynch today presented the Joint Legislative Fiscal Committee with a financial strategy to address a projected revenue shortfall and help ensure the state has a balanced budget by the end of the current fiscal year.

"We are in the midst of an unprecedented global economic crisis. We are in the midst of an unprecedented global economic crisis. When we crafted this budget 18 months ago, no one could have predicted the depths to which our nation's economy would sink," Gov. Lynch said.

"This crisis has led to budget shortfalls in states across the nation. And while we are better positioned than most states, New Hampshire is not immune to the global economic conditions. The challenge before us is very real and very significant," Gov. Lynch said.

The fiscal committee voted to approve two Executive Orders issued by Gov. Lynch.

The first Executive Order includes specific agency reductions totaling $53.6 million. As part of these reductions, The Department of Environmental Services will be deferring new state aid grants until the next biennium, which will save $3.3 million.

The Land and Community Heritage Investment Program will not enter any new commitments for 2009, and will repay the general fund $3 million of 2008 fiscal year funds. The University and Community College systems both agreed to pay their 8 percent reduction targets without increasing tuition.

The second Executive Order implements several cost-saving measures across state government directing agencies:

        *       To limit overtime wherever possible.
        *       To ensure that all state vehicles are parked overnight at state offices, unless absolutely necessary for a state employee to carry out their job responsibilities.
        *       To limit mileage reimbursement by requiring employees to car pools and use pooled state vehicles wherever possible.
        *       To print all publications exclusively online wherever possible.
        *       To retain only essential consulting services and to terminate existing consulting contracts where feasible.
        *       To cancel subscriptions for books, newspapers and periodicals wherever possible.
        *       To undertake a reduction in their telephone landlines where possible - a move that is saving the Judicial Branch $10,000 - and to reduce mobile cell phone use and encourage the pooling of cell phones.

In addition, no tuition reimbursements will be authorized without a waiver for the remainder of the fiscal year.

Together these Executive Orders will produce a savings of at least $56.6 million.

In addition, Gov. Lynch has been in discussions with the legislative leadership about the need for legislation that allows the state to reduce the revenue shortfall by about another $20 million. It would include legislative and judicial branch reductions and an additional lapse from the retirement system valued at about $2.6 million; authorize the Highway Fund to repay $5 million in general funds; to transfer about $10 million in surplus from various dedicated funds to the general fund; and to make $2 to $3 million in additional agency reductions that would require full legislative approval. It would also recommending the deferral of pay increases for non-classified and unclassified employees, which would save $500,000.

Gov. Lynch said he will continue discussions with representatives of employees about additional steps to address salary or benefit costs. Those changes would need to be agreed to as part of a renegotiation of the Collective Bargaining Agreement.

The executive orders and proposed legislation, the revenue shortfall gap will be reduced from $250 million to about $75 million.

"We have made significant progress, but we must still work together to address the remaining challenge," Gov. Lynch said.

Gov. Lynch said that while a record $89 million remains in the Rainy Day Fund, those savings should be used only as a last resort.

"These are tough times for New Hampshire families and businesses. The global economic situation continues to be volatile, and we must continue to carefully watch revenues closely and take the necessary steps to manage the budget," Gov. Lynch said. "I am committed to ensuring we continue to be fiscally responsible and end the biennium with a balanced budget."

BRIAN LAWSON is a PolitickerNH.com Reporter and can be reached via email at brian.lawson@politickernh.com.

Related topics: John Lynch, spending, budget, spending cuts, New Hampshire

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