State revenue surplus reaches milestone
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Jun. 6—CONCORD — New Hampshire hit another milestone in a year of record state revenues, with tax proceeds more than $400 million over forecast and with another month still to go.
May isn't considered a big month for taxes and fees, but even this one grew the revenue surplus by $24 million, almost 21% over what was expected.
All told, the state has taken in $406 million more than the estimate in the two-year state budget signed by Gov. Chris Sununu in June 2021.
The $2.7 billion in total revenue received so far is $250 million more than what came in during the same 11 months ending in May 2021.
The state took in $140 million in May, which actually was $8.3 million less than the state saw in the same month last year.
The massive surplus this fiscal year has been fueled by the state's two business taxes.
In April the two business taxes took in $83 million more than projected.
May was no different, with business taxes up $39 million over the month's forecast.
June is one of the four big months for business taxes. The expectation is that could expand the surplus to more than $450 million.
The May report also revealed how much the state's tax on restaurant meals and hotel bookings continues to recover from its nadir during the pandemic.
After netting $3.9 million more than expected in May, the surplus from that tax alone tops $52 million.
Revenue Commissioner Lindsey Stepp noted the gain from the restaurant portion of the tax from a year ago was 7.5% and collections from hotel rentals was up 25.7% compared to the same month last year.
The state budget Sununu signed cut this tax from 9% to 8.5% this year.
Real estate taxes
Rising home prices continue to help deliver even more money through the tax on real estate transactions.
In May, the tax — split by the buyer and seller — took in $16 million, or $1.5 million over forecast.
For the year, the $212 million that's come is $28 million more than last year and $33 million above estimates.
While the number of sales in April were off by 17% compared to 2021, the value of those fewer sales collectively were 17% more than last year.
Much of this revenue surplus had been expected, and some of it has already been spent.
The money will be used to lower the statewide property tax all property owners pay by $100 million in the coming year.
Lawmakers also approved spending bills in the 2022 session that spent some more, including $20 million in more education aid to the poorest communities, $67 million more in local road and bridge work and a $9 million down payment on a new parking garage for legislators.
Gov. Chris Sununu has stressed his desire to earmark surplus spending to one-time uses such as road/bridge work in 2023 and a $30 million account in school safety upgrades two years ago.
The fiscally conservative Josiah Bartlett Center for Public Policy recently urged Sununu and lawmakers to consider setting aside some of the surplus to pay down the unfunded liability in the pension system.
The Bartlett Center said doing so would lower future borrowing costs and improve the financial rating of the retirement system.
"This would save taxpayers money in the long run and be a responsible use of these unexpected revenues," Drew Cline, the center's president, said in its policy statement. "The state's tremendous budget surplus is a windfall that should be used wisely."
