CONCORD - Gov. John Lynch today presented the Joint Legislative Fiscal Committee with a financial strategy to address a projected revenue shortfall and help ensure the state has a balanced budget by the end of the current fiscal year.

“We are in the midst of an unprecedented global economic crisis. We are in the midst of an unprecedented global economic crisis. When we crafted this budget 18 months ago, no one could have predicted the depths to which our nation’s economy would sink,” Gov. Lynch said.

“This crisis has led to budget shortfalls in states across the nation. And while we are better positioned than most states, New Hampshire is not immune to the global economic conditions. The challenge before us is very real and very significant,” Gov. Lynch said.

The fiscal committee voted to approve two Executive Orders issued by Gov. Lynch.

The first Executive Order includes specific agency reductions totaling $53.6 million. As part of these reductions, The Department of Environmental Services will be deferring new state aid grants until the next biennium, which will save $3.3 million.

The Land and Community Heritage Investment Program will not enter any new commitments for 2009, and will repay the general fund $3 million of 2008 fiscal year funds. The University and Community College systems both agreed to pay their 8 percent reduction targets without increasing tuition.

The second Executive Order implements several cost-saving measures across state government directing agencies:

• To limit overtime wherever possible.
• To ensure that all state vehicles are parked overnight at state offices, unless absolutely necessary for a state employee to carry out their job responsibilities.
• To limit mileage reimbursement by requiring employees to car pools and use pooled state vehicles wherever possible.
• To print all publications exclusively online wherever possible.
• To retain only essential consulting services and to terminate existing consulting contracts where feasible.
• To cancel subscriptions for books, newspapers and periodicals wherever possible.
• To undertake a reduction in their telephone landlines where possible - a move that is saving the Judicial Branch $10,000 - and to reduce mobile cell phone use and encourage the pooling of cell phones.

In addition, no tuition reimbursements will be authorized without a waiver for the remainder of the fiscal year.

Together these Executive Orders will produce a savings of at least $56.6 million.

In addition, Gov. Lynch has been in discussions with the legislative leadership about the need for legislation that allows the state to reduce the revenue shortfall by about another $20 million. It would include legislative and judicial branch reductions and an additional lapse from the retirement system valued at about $2.6 million; authorize the Highway Fund to repay $5 million in general funds; to transfer about $10 million in surplus from various dedicated funds to the general fund; and to make $2 to $3 million in additional agency reductions that would require full legislative approval. It would also recommending the deferral of pay increases for non-classified and unclassified employees, which would save $500,000.

Gov. Lynch said he will continue discussions with representatives of employees about additional steps to address salary or benefit costs. Those changes would need to be agreed to as part of a renegotiation of the Collective Bargaining Agreement.

The executive orders and proposed legislation, the revenue shortfall gap will be reduced from $250 million to about $75 million.

“We have made significant progress, but we must still work together to address the remaining challenge,” Gov. Lynch said.

Gov. Lynch said that while a record $89 million remains in the Rainy Day Fund, those savings should be used only as a last resort.

“These are tough times for New Hampshire families and businesses. The global economic situation continues to be volatile, and we must continue to carefully watch revenues closely and take the necessary steps to manage the budget,” Gov. Lynch said. “I am committed to ensuring we continue to be fiscally responsible and end the biennium with a balanced budget.”

Copy of the Executive Orders are below.

Executive Order 2008-10

State of New Hampshire
By His Excellency
John H. Lynch, Governor

Executive Order 2008-10

An order directing a reduction in Executive Branch expenditures

WHEREAS, RSA 9:16-b provides that “[n]otwithstanding any other provision of law, the governor may, with prior approval of the fiscal committee, order reductions in any or all expenditure classes within any or all departments, as defined in RSA 9:1, if he determines at any time during the fiscal year that: (a) Projected state revenues will be insufficient to maintain a balanced budget and that the likelihood of a serious deficit exists; or (b) The actual lapse for each fiscal year is not going to equal the level estimated in the forecast of funds, unappropriated surplus, as issued by the legislative budget assistant;”

WHEREAS, the Governor has determined that the budgeted state revenues are insufficient to fund state budgeted expenditures as authorized by Chapter 262, N.H. Laws of 2007;

WHEREAS, the Governor and Legislature are committed to taking such steps as are required to achieve a balanced budget by the end of the biennium;

WHEREAS, the Governor has met with the presiding officers of the House and Senate and has thus determined that it is in the public interest to meet with the legislative fiscal committee, which has, in turn, responded to the Governor’s initiative by consenting to certain actions to reduce executive branch expenditures;

NOW, THEREFORE, I, JOHN H. LYNCH, Governor of the State of New Hampshire, by virtue of the power and authority vested in me by RSA 9:16-b and part II, article 41 of the New Hampshire Constitution, do hereby order the following:

a. The appropriations as authorized for the fiscal year ending June 30, 2009 for each department listed below are hereby reduced by the amount indicated.

 

b. In lieu of a reduction in appropriation, the University System has agreed to pay $4,516,101 prior to June 30, 2009. $ 4,516,101

c. In addition, the Community College System has agreed to pay $1,672,864 in monthly installments prior to June 30, 2009.
$ 1,672,864
TOTAL $53,645,955

d. The reductions directed by this order shall remain in effect until June 30, 2009 or until terminated, provided, however, that individual exceptions to any of the above provisions may be requested by any department in writing to the Governor. Any exceptions granted by the Governor shall be transmitted to the fiscal committee.

Given under my hand and seal at the Executive Chambers in Concord, this 21st day of November, in the year of our Lord, two thousand and eight.

___________________________
Governor of New Hampshire

Executive Order 2008-11

State of New Hampshire
By His Excellency
John H. Lynch, Governor

Executive Order 2008-11

An order directing Executive Branch spending reductions

WHEREAS, RSA 9:16-b provides that “[n]otwithstanding any other provision of law, the governor may, with prior approval of the fiscal committee, order reductions in any or all expenditure classes within any or all departments, as defined in RSA 9:1, if he determines at any time during the fiscal year that: (a) Projected state revenues will be insufficient to maintain a balanced budget and that the likelihood of a serious deficit exists; or (b) The actual lapse for each fiscal year is not going to equal the level estimated in the forecast of funds, unappropriated surplus, as issued by the legislative budget assistant;”

WHEREAS, the Governor has determined that the budgeted state revenues for Fiscal Year 2009 are insufficient to fund state budgeted expenditures as authorized by Chapter 262, N.H. Laws of 2007;

WHEREAS, the Governor and Legislature are committed to taking such steps as are required to achieve a balanced budget by the end of the biennium;

WHEREAS, the Governor has met with the presiding officers of the House and Senate and has thus determined that it is in the public interest to meet with the legislative fiscal committee, which has, in turn, responded to the Governor’s initiative by consenting to certain additional actions to further reduce expenditures for purchases in the executive branch;

NOW, THEREFORE, I, JOHN H. LYNCH, Governor of the State of New Hampshire, by virtue of the power and authority vested in me by RSA 9:16-b and part II, article 41 of the New Hampshire Constitution, do hereby order the following steps to apply to all departments as defined in RSA 9:1 in order to effect a reduction in expenditures:

1. Overtime: Overtime hours funded with general funds shall not be authorized, with the exception of overtime that is necessary for direct care, to ensure public safety, to respond to emergencies, to comply with provisions of collective bargaining agreements or pursuant to a written overtime policy approved by the agency head and deemed essential to carry out the core mission of the department.

2. State Vehicles: All state vehicles shall be parked overnight at the primary business office of the state employee assigned to the vehicle, unless the agency head determines that storage of the vehicle at a personal residence or other location is necessary for the state employee to carry out his or her assigned duties.

3. Mileage Reimbursement: Departments shall require the use of car pools or pooled state vehicles when feasible for travel during the workday. Mileage reimbursement requests shall not be authorized where a car pool or state vehicle was feasible but was not used.

4. Publications and Printing: Reports should be published only electronically whenever possible.

5. Consultants: Departments shall only retain essential consulting services, and shall terminate existing consulting services, as feasible, unless determined to be essential to the department’s operations.

6. Books, Periodicals, Newspapers and Subscriptions: Books, periodicals, newspapers and subscriptions shall be canceled, unless determined to be essential to the department’s operations.

7. Tuition Reimbursement: No tuition reimbursement shall be authorized.

8. Phones: All departments shall implement a reduction in telephone landlines, by identifying lines that are not being used or are non-essential. All departments shall implement a reduction in mobile cellular phone usage by terminating non-essential mobile cellular phones and by encouraging the pooling of mobile cellular phones amongst state employees.

The steps directed by this Executive Order shall remain in effect until terminated, provided, however, that individual exceptions to any of the above provisions may be requested by any department in writing to the Governor. Any exceptions granted by the Governor shall be transmitted to the fiscal committee.

Given under my hand and seal at the Executive Chambers in Concord, this 21st
day of November, in the year of our Lord, two thousand and eight.

___________________________
Governor of New Hampshire