New Hampshire ranks first in New England and the country in the following categories: favorable tax climate (state and local burden on income), standard of living based upon poverty rate, child and family well-being and the most livable state.

Nationally, we rank second as the most healthy state, fifth safest state and fourth for adults with high school degrees or higher. These statistics are highlighted in the 137 page New Hampshire Comprehensive Annual Financial Report. The CAFR was presented to the Joint Legislative Fiscal Committee on Thursday along with the audit of the state’s books by KPMG for the fiscal year that ended on June 30.

Of the dozens of financial charts and descriptions that make up the CAFR, the key number is the $13.8 million surplus from operations for the general and education trust funds at the end of the fiscal year. That amount added to the $9.3 million in the rainy day fund gave us $23.1 million to the good to start the current fiscal year. That is not much money to start a new year with revenue and expenditures budgeted for $2.2 billion.

While the "big" casino gambling bill of 2013 awaits a public hearing on Feb. 19, there is interest and some fascination with all aspects of gaming. The audit of the NH Lottery Commission was presented along with their annual report. Lottery profits go entirely to fund education. It only produced $67 million of the more than $900 million the state sent to communities last year for adequate education grants but it still is an important state government business.

Lottery receipts were declining six percent per year. That has been turned about and last year lottery revenue increased by seven percent and has become of one fastest growing state lottery programs in the country, Charles McIntyre, the commission’s executive director said. Total lottery sales last year were $255 million up 11.3 percent over 2011.

I usually think of the lottery around the time of the large national Powerball and Mega Millions jackpots. And big jackpot games are tied to sales … sales jump as the size of the jackpot grows. The important factor is that instant scratch ticket sales overwhelm all the other products with 70 percent of all lottery sales. Powerball comes in second with just 13 percent of sales.

The operation of the lottery business depends upon the large jackpots along with changing products. Director McIntire explained, for example, that the game, Lucky for Life, was introduced last March. It is a New England-wide lottery with the top prize being $1,000 a day for life. The commission’s report noted: "This new game only operated for three months of fiscal year 2012 and during those three months there were four jackpot prizes won; therefore, the game ended the fiscal year with a deficit due to a prize percentage of 115 percent of sales." Director McIntyre told the Fiscal Committee the game has been profitable over the last six months and sales are growing.

Audits and annual reports from our various departments and businesses provide legislators, the press and the public with important information on how government is raising and spending its money. The reports are available to the public via the internet. You can start at nh.gov.

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Claremont was the example cited by several witnesses testifying on behalf of Senate Bill 74 last Wednesday. The bill would excempt entities providing hot water through a local distribution system from Public Utility Commission regulation. I am the bill’s sponsor and Senator David Pierce (Etna) is a co-sponsor.

New Hampshire residents and businesses are heavily dependent on oil for heating homes and buildings. Even within the state, Dick Henry of The Jordan Institute pointed out, everything is not equal. He testified, "Communities like Claremont which are more than 50 miles away from the nearest natural gas pipeline suffer a distinct economic disadvantage compared to sister communities with access to natural gas. On the wholesale market today, oil is selling for five times the price of natural gas for the same amount of energy."

He went on, "If there are two equivalent enterprises, the one in Claremont, which must pay for oil, will struggle to compete with its twin in Laconia, which can purchase natural gas. The more energy intensive the business, the greater the lure to move to a location with natural gas."

Without naming names, there is a manufacturer in Claremont that produces excess hot water. That hot water, through a local or district energy distribution system, could be delivered to downtown businesses, residences and government agencies to heat their buildings. The technology is proven and available and, if passed, SB 74 would lay the foundation to move forward.

Gary Trottier, a Claremont businessman and owner of a large retail and apartment building on Opera House Square, has seen the power of change by moving in a new direction. With help from The Jordan Institute, he told the Energy and Natural Resources Committee, that he has gone from spending $60,000 annually for oil, with most of that money leaving the state quickly, to spending $20,000 per year with a Jaffrey, NH firm for wood pellets. Gary’s experience is a good example of how positive change in the energy market can be created that benefits all of us.