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Press Release

For Immediate Release
August 7, 2014

Contact:
Communications Office
(603)271-2121

Governor Hassan Directs State Agencies to Submit Conservative Budget Proposals for FY16 and FY17
Directs Agencies to Also Propose Plans to Increase Efficiency and Effectiveness, Conduct Cost-Benefit Analysis of Contracted Services

CONCORD – Continuing efforts to maintain fiscal responsibility and ensure a balanced budget, Governor Maggie Hassan directed state agencies to submit conservative budget proposals that keep spending increases at a minimum for the FY16-17 state budget.

In addition, Governor Hassan directed each agency to submit proposals for improving their efficiency and effectiveness and to conduct a cost-benefit analysis for contracted services. The instructions were included as part of the state’s biennial budget manual, which was delivered in training sessions yesterday.

“By working together and putting the needs of our people first, we have been able to make significant progress while maintaining fiscal responsibility, carefully managing limited state resources and protecting New Hampshire’s bond rating,” Governor Hassan wrote. “As a state, we remain committed to wise investments in our students and our workers, in protecting our quality of life, public safety, and environment, in maintaining our roads and infrastructure, in providing a safety net for our most vulnerable citizens, and in ensuring that the burden on taxpayers in New Hampshire remains among the lowest in the nation.  Meeting those goals as we develop the 2016 and 2017 state budget will require continued innovation on all of our parts.”

As required by law, the Governor’s letter directs agencies to submit both maintenance and change budgets, and she requests that growth in spending be kept to a minimum and that agencies also consider and recommend areas where they can potentially reduce costs. Under state law, agencies are required to submit a maintenance budget that represents the cost of continuing business in the same way as today. Agencies are also required to submit a change budget that incorporates new costs. Governor Hassan directed agencies to put in their change budgets any costs for implementing previously unfunded but legislatively mandated programs; any new or improved programs and technology that are necessary for efficiency gains within state government; and any new or currently unfunded positions.

In line with a suggestion in a 2013 legislative audit, as part of the budget process Governor Hassan is also directing agenices to review any currently contracted services, including consultant contracts, and to conduct a cost-benefit analysis of continued contracting versus bringing services in-house from a financial, operational and management perspective.

In addition to the maintenance-level and change-level requests, Governor Hassan is also requiring departments to submit a separate planning document that would set the agency’s total budget for fiscal year 2016 at 100 percent of the fiscal year 2015 adjusted authorized budget and for fiscal year 2017 at 103 percent of the fiscal year 2015 adjusted authorized budget.

And continuing her efforts to innovate in state government in order to save taxpayer dollars and improve state services, the Governor is also requesting that agencies submit one detailed proposal for every division in their agency to make state government more effective and efficient. Those proposals are due back to the Governor’s Office by December 1.

Last year, Governor Hassan worked throughout the budget process to bring people together from both parties to pass a fiscally responsible, balanced budget - without a sales or income tax – that keeps New Hampshire’s economy moving in the right direction, investing in priorities such as education, public safety, caring for our most vulnerable citizens and preserving our natural resources.

The full text of the Governor’s letter to agency heads is below.

Dear Agency Head:

First, I would like to thank you for your leadership and hard work.  Please know that I, along with the people of New Hampshire, am grateful for the public service that you and your dedicated employees consistently provide every day.  By working together and putting the needs of our people first, we have been able to make significant progress while maintaining fiscal responsibility, carefully managing limited state resources and protecting New Hampshire’s bond rating.

Although we have much to be optimistic about, we remain in challenging fiscal times as the economy continues its recovery from the Great Recession. As a state, we remain committed to wise investments in our students and our workers, in protecting our quality of life, public safety, and environment, in maintaining our roads and infrastructure, in providing a safety net for our most vulnerable citizens, and in ensuring that the burden on taxpayers in New Hampshire remains among the lowest in the nation.  Meeting those goals as we develop the 2016 and 2017 state budget will require continued innovation on all of our parts.

As required by law, you should submit both maintenance and change budgets. Any items – including currently unfunded positions – that are required by law but not funded in the current budget should be placed in the change budget. While we recognize there will be growth in some categories, such as personnel and utilities, agencies should not apply automatic “inflation” factors to line items. Each program and each line item should be examined from the ground up to determine first whether the spending continues to be necessary and second whether it can be reduced.  Growth in all spending categories should be kept to a minimum, and agencies should recommend areas where they can reduce costs by being more efficient and innovative. 

The change-level request would include any increases above the maintenance-level request for 1) previously unfunded but legislatively mandated programs; and 2) any new or improved programs and technology that you believe are necessary for efficiency gains within state government. Any new positions should appear as part of the change request. Please only include critical increases that you can strongly justify, including any analysis showing future estimated cost reductions and avoidance.

As part of our ongoing efforts to be more innovative, I am asking agencies to submit to the Governor’s Office proposals for making their agencies more efficient and effective. Agencies should submit at least one detailed proposal for every division in their agency. All agencies should also submit at least one proposal to make state government as a whole more effective and/or efficient.

These proposals will be due to the Governor’s Office by December 1st.

In addition, as part of the budget process, agencies should review any currently contracted services, including consultant contracts, and conduct a cost-benefit analysis of continued contracting vs. bringing services in-house, from a financial, operational and management perspective.

When compiling your agency budget requests, please also keep in mind any assistance you will need as part of the implementation of the next budget.  Specifically, please identify any necessary statutory or rule changes, requested flexibility in certain areas, or potential inter-agency cooperation that will assist you in achieving any innovations and efficiencies as part of the biennial budget process for the fiscal years 2016 and 2017.

I ask that, in addition to your maintenance-level and change-level requests, you submit a separate planning document that would set your agency’s total budget for fiscal year 2016 at 100 percent of the fiscal year 2015 adjusted authorized budget and for fiscal year 2017 at 103 percent of the fiscal year 2015 adjusted authorized budget.  Please ensure that the fiscal year 2015 adjusted authorized includes all supplemental appropriations or appropriation reductions and any so-called back-of-the-budget reductions. 

I would like to express my gratitude in advance for all of your hard work, creativity, and cooperation.  The budget process is time consuming and requires difficult decisions, but it also generates the fresh ideas and innovative thinking necessary for us to ensure that we have provided New Hampshire citizens with the best possible product. 

With Every Good Wish,

Margaret Wood Hassan
Governor