The New Hampshire state government will have to cut programs and lay off employees in order to balance its budget, Gov. John Lynch said on Thursday. The governor's announcement comes as the state government, facing a budget shortfall due to the economic recession, is attempting to reduce expenditures.
"Some layoffs are unavoidable, particularly as we look to eliminate programs," Lynch said, according to the Associated Press.
Several of the promises the governor made in his inaugural address will have to be deferred until the economy improves, Colin Manning, Lynch's press secretary, said in an interview with The Dartmouth. Manning added that the state government is still considering which programs to cut.
"Right now, the governor is making some of the final decisions, putting together the budget for the next two years," Manning said.
Lynch may consider reducing aid to local communities, freezing increases in school spending and cutting nonessential programs. All state spending aside from mandatory debt repayment is under scrutiny, Manning said.
Lynch will present his budget proposal to the New Hampshire legislature on Feb. 12.
Mike Barwell, communication administrator for the State Employees Association, said cutting jobs and programs will harm the state economy and the people dependent on government services.
"In a time of economic downturn, the need for public assistance is greater," he said. "To cut public services at the time when they're needed most is not necessarily a wise move."
Barwell said the state should instead reduce spending by reevaluating its practice of hiring outside contractors and consultants.
Because they are employed by for-profit corporations, he said, these contractors cost the state at least 15 percent more per hour than state employees.
"We estimate that approximately one-third of the state budget over a two-year period is paid to outside contractors and consultants to the government -- that's $2 billion in costs," Barwell said.
The state could also save money by promoting greater efficiency at all levels of government, Barwell said.
There is no simple or easy way to address the current budget shortfall, said Dennis Delay of the New Hampshire Center for Public Policy Studies, a Concord-based think-tank.
"The simple fact of the matter is there are no good choices at this point," Delay said. "You can debate cutting expenditure versus raising revenue in other ways, and frankly they're all unattractive choices."
New Hampshire could also attempt to implement short-term solutions by privatizing state programs and selling debt, Delay said.
A wide coalition of business interests has spoken out against a tax increase, Delay said. Many New Hampshire elected officials have also pledged not to raise taxes, Barwell said.
Despite its budget shortfalls, Delay noted that New Hampshire's situation is not as bad as that of many other states like Florida and Nevada, whose economies rely on real estate. He pointed to California as a particularly hard-hit state, saying it has been forced to stop payment of tax refunds and other remunerations.
"Every state in the country that's in a budget crisis is either cutting programs or increasing revenue or some combination of both," he said.
