United States Budget Dilemma - Have We Gone Past The Point of No Return?

The following video is a real good look at why the Federal Government can't get their budgets balanced.

Even Rep. Paul Ryan's budget, as tight as he can make it results in a deficit!

We may already be beyond where Greece and some of the Eurozone countries are regarding their debt and the ability to get back to a balanced budget! If it is ugly in Europe one can only imagine how bad things will get here in the good old USA.

NHGOP Response to What Voters Hope is Obama's Last SOTU Address

"Tonight, New Hampshire voters heard another lofty speech filled with promises to boost job creation and rebuild our economy, but this is the same empty rhetoric they've heard year after year.  President Obama simply doesn't realize that his commitment falls short because his so-called 'accomplishments' are the problem.  ObamaCare, reckless spending and job-destroying regulations are hurting small business owners and drowning out the free market with more government.

"Despite these promises, the unfortunate reality is that the national unemployment rate is significantly higher today than it was when he took office.  Too many New Hampshire workers either can't find a job or are under-employed.  

"As we look ahead to 2012, the President's broken promises on the economy and his record of more spending, more debt and more taxes will prove to be a liability for Democrats running for office across our state."

OBAMA'S PROMISE AFTER PROMISE AFTER PROMISE

2009: "It's an agenda that begins with jobs." (President Barack Obama, White House Press Office, 2/24/2009, Accessed: 1/24/2012)

2010: "That is why jobs must be our number-one focus in 2010." (President Barack Obama, White House Press Office, 1/27/2010, Accessed: 1/24/2012)

2011: "All these investments. . . . will make America a better place to do business and create jobs." (President Barack Obama, White House Press Office, 1/25/2011, Accessed: 1/24/2012)

NH House leadership on the passage of SB 148

CONCORD – The House today voted 261 to 104 to direct New Hampshire's  Executive Council to return $666 thousand in planning funds sent to the state by the federal government for the purpose of implementing an insurance exchange for Obamacare. Following the vote, House leaders released the following statements:

“This bill sends the Obamacare money back to Washington with specific instructions to use it to reduce our massive federal deficit. Obamacare has been found unconstitutional by two federal courts and we are awaiting the final decision by the U.S. Supreme Court. Spending that sort of money to comply with a mandate that is three years away and stands on very shaky ground makes no sense. It is irresponsible to knowingly waste tax dollars, be it state or federal, when we face historic budget deficits in Washington and Concord. No bit of money should be considered ‘insignificant’ in the ongoing discussions of balancing the budget. We simply have to be better stewards of taxpayer money,” said House Speaker William O’Brien (R-Mont Vernon).

“Obamacare increases the federal deficit by over $700 billion over the next decade and it will increase, not decrease, premiums. I am pleased that the House sent a message today that we‘re not interested in federal money with strings attached and that we will fight to preserve our sovereignty. The House stood firm on its position that, without exception, Obamacare is unconstitutional and wrong for New Hampshire.  Accepting these federal funds would crack open the door to Obamacare in New Hampshire and begin a process that would be very hard to slow down or reverse. No matter who designed the exchange it would surely be detrimental to the state’s health care system and the economy,  and extremely expensive for the taxpayers of New Hampshire. The public resentment to Obamacare is one of the main reasons why the public supported Republicans last November. It is clear our taxpayers don’t want their money spent on this disastrous scheme by the Democrats to control our health care,” said House Majority Leader D.J. Bettencourt (R-Salem).

NH Watchdog - NH's Artificial Surplus

NH “Surplus” relies on borrowing, transfers
By Grant Bosse

(CONCORD) Governor John Lynch yesterday announced that the state ended Fiscal Year 2010 with a $70 million surplus, but that figure includes both new debt and an $80 million transfer from the current fiscal year. The unaudited “surplus statement” comes from the Department of Revenue Administration. Lynch claims that the “surplus” came about from “our strong fiscal management”, but the real reason the state balance sheet appears balanced is because lawmakers approved a number of tactics to artificially inflate FY10′s bottom line at the expense of future years.

 

Building Aid

The FY10 Budget continued the recent practice of borrowing money to meet the state’s payments to local school districts under the Building Aid Program. By taking $45 million out of the General Fund, and paying for it out of the Capital Budget, the Governor and Legislature have created the illusion of a spending cut, while actually increasing the cost of the program.

University System of New Hampshire Loan

The budget fix proposed by Governor Lynch this spring, and approved by the Legislature in June, included a $25 million cash transfer from the University System of New Hampshire in lieu of the budget cuts that hit every other state agency. In exchange for the quick cash, the University System received $25 million in additional bond revenue from the Capital Budget. Neither this new debt, nor the $45 million in Building Aid debt, is included as spending under the “surplus statement” issued yesterday. These two provisions alone would wipe out the “surplus” claimed by Governor Lynch.

$80 million transfer

The budget fix also included an $80 million transfer in the Education Trust Fund from FY11 to FY10. An extra $80 million was inserted into the FY10 account, which then automatically transferred to the state’s General Fund, where it was counted towards the “surplus” generated by DAS. But that $80 million now needs to be moved back into the Education Trust Fund for FY11. Since the Education Trust Fund and General Fund operate on a two-year budget cycle, the transfer written into the budget in June has no legal or financial significance. But it does create an artificial surplus in FY10 and a matching deficit for FY11. Since the “surplus statement” ends with the close of FY10 on June 30th, it includes $80 million that is no longer there.

Prospective Deficit

The “surplus statement” does not address the prospective budget deficit that faces the next Legislature in January. Assuming all current spending continues, and one-time revenues and spending cuts do not reoccur, the state starts the FY12-13 budget cycle with a budget hole between $600 million and $900 million.



New Hampshire debt climbs 30% in five years

(CONCORD) New Hampshire’s debt has grown by 30% over the last five years. According to official documents provided to potential bond buyers ahead of tomorrow’s planned sale of $150 million in new debt, the General Obligation Debt climbed from $634 million at the beginning of Fiscal Year 2006 to $823 million at the end of FY 2010.

The amount of new debt issued each year has also grown dramatically, from $75 million in FY06 to $282 million in FY10. The cost of the additional borrowing will start to hit the state’s bottom line this year. Nearly $123 million in bonds are due to be repaid this Fiscal Year, with $425 million payable in the next four years alone.

New Hampshire’s total debt tops $1.3 billion. This includes Turnpike and Highway Bonds which are funded through dedicated revenue sources, but does not include the state’s unfunded obligations to the state retirement system.

According to the Preliminary Official Statement issued for tomorrow’s $150 million General Obligation bond sale, New Hampshire debt per capita has risen from $491 in 2006 to $621 today. As a percentage of personal income, the debt has gone from 1.2% to 1.45%.

Earlier this year, the Legislature approved an additional $75 million in borrowing to help erase a $295 million budget hole. This included $50 million in new debt to make FY11 debt service payments, and $25 million from the University System, which will be paid back through the state’s annual Capital Budget. According to estimates provided by the State Treasurer’s Office, New Hampshire’s debt service ratio will reach 8% of General Fund expenditures next year. The state’s debt service ratio was 5.6% in 2005, and 5.7% in 2008.

According to State Treasurer Cathy Provencher, New Hampshire has traditionally carried a low debt burden. She cautions that the nation’s leading bond rating agencies would raise red flags if the state’s debt service ratio reached 10%. Provencher cited the state’s stable bond rating as the reason she scheduled the state annual General Obligation bond sale for this week. This year’s GO bond sale is the earliest by far over the past eight years. Since FY04, the annual bond sale has ranged from as early as November 4th to as late as January 19th. Provencher says that she does not plan to go back to the bond market again until the Fall of 2011.