State Budgets: New Hampshire Facing Tax Increase Pressure for Modest Shortfall

December 28, 2008

Legislators meeting in early January must come up with options to close a remaining $100 million shortfall in the current $10.3 billion biennial budget and then begin work on next year’s budget (estimated to be about $400 million short). Gov. John Lynch (D) won approval earlier in 2008 for a higher cigarette tax, a tax on poker games, and diverting education funding to the general fund, but his proposal to defer raises for workers was rejected by the legislature. Some $50 million in cuts have been made, including suspending jury pay. Lynch has said layoffs or tapping the $89 million rainy day fund will be a last resort, and that he opposes adopting an income tax, raising the sales tax, or expanding state gambling despite calls to expand slots.

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