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Patricia "Ricia" McMahon
State Representative
District 3


July 2, 2010

Representative McMahon is a member of the House Executive Department & Administration Committee, and represents the towns of Newbury and Sutton.

In Difficult Times Revenue Projections Surpass Expectations

The Governor and Legislature during the recent session worked to assure that essential services remained in place to prevent shifting costs to local property tax payers. New Hampshire's budget required difficult choices and the legislature set priorities during a national economic recession that strained state budgets across the country. Despite these challenges the state budgeted nearly half (45%) of its resources in aid to municipalities (cities, towns and school districts).

As most states faced plummeting revenues last year, the New Hampshire House initiated reductions in the budget to close the gap when economic predictions indicated that the national recession would have an even further negative impact on state revenues. Collaborating throughout the spring, the Legislature and Governor were able to agree on the methods to close a $300 million budget shortfall. In addition, the Merrimack County legislative delegation, also mindful about budget concerns and potentially lower revenues, made reductions to the county budget. These efforts positioned New Hampshire to actually have a budget which addresses our most pressing needs now, while deferring others until the national economy recovers.

The results of those difficult decisions had consequences: some employees in state government faced lay offs, state agencies were required to freeze spending and authorizations for new expenditures from the prior budget were eliminated. Sadly this resulted in over 2,000 New Hampshire families on a waiting list for the first time since the state began subsidizing child care in order that low income parents could go to work.

The court system also experienced funding reductions which resulted in furloughs and also the elimination of some district courts across the state. Both Newbury and Sutton had an option to select a more convenient location for hearing criminal and family court cases. Each town had a different preference and both choices received legislative approval. 

The legislature, along with public employees, created a retirement health benefit which is not a cost to municipalities or to the state. This allows employees to pay tax-free into a health fund they will use for medical needs in retirement.

Education funding coupled with goals set to reduce our state's dropout rate, and provide alternative programming for students at greatest risk, showed an unprecedented 30% reduction in dropouts this past year. This improvement is a tremendous accomplishment for our state, our young people and their future.

Efforts to help improve our state's economy and create jobs, through expanded job training, tax incentives for research and development, the promotion of renewable energy and rebuilding our roads and bridges will lay the foundation for the continued fiscal health of New Hampshire's citizens and communities.

The following is a paragraph from the last NH Municipal Association newsletter:

"Addressing a state budget shortfall of this magnitude was an extremely onerous task, with difficult choices having to be made every step of the way. Although there may be some indirect impact on municipal budgets from the significant reductions at the Department of Health and Human Services, overall the adoption of SSHB 1 did not result in a direct downshift of state budget shortfalls onto cities and towns, and ultimately property taxpayers. For this, your legislators should be commended." 

Over the past six years New Hampshire has experienced one of the lowest unemployment rates in the nation and is expected to lead the region's economic recovery. 

The good news at this point in the calendar is that New Hampshire unlike a number of other states has a balanced budget for FY 2010 ending June 30, 2010. There is some other good news. June revenues surpassed expectations. Approximately $37 million was generated above revenue projections at the end of this fiscal year. Hopefully this trend will continue during FY 2011 beginning July 1, 2010 and the legislature that convenes next January will have the advantage of increased revenues from this July through June of next year from a variety of sources.


Ricia McMahon
State Representative, Merrimack County District 3
Newbury and Sutton

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