As anyone who has put together a family budget knows, budgets balance revenues with expenses. The same stands for our two-year state budget. Our revenues are based on estimates projected more than two years into the future. It is more of an art than a science, but it is a vital part of the state budget process.
This year, the House’s estimate called for lower revenues, to account for potential economic downturn, and two months later, in early April, passed the budget to the Senate. As typically happens, at that time better revenue estimates were available. The Senate by-and-large adopted revenue estimates from Gov. Chris Sununu’s office, which were then revised slightly and accepted by the House and Senate when the budget passed in June.
Unfortunately, now the economy is showing signs of serious weakness. The revenues coming in – across the board – are lower. And business tax revenues are significantly lower than estimated.