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NH gov: $140M in budget cuts, layoffs unavoidable

By Norma Love
Associated Press Writer / February 11, 2010

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CONCORD, N.H.—Gov. John Lynch plans to cut $140 million from New Hampshire's state budget over the next 17 months, and sees layoffs as unavoidable.

"It's very difficult to imagine a scenario totaling $140 million in savings that won't include some layoffs," Lynch told reporters Thursday in announcing the planned cuts.

The state has laid off about 200 workers since the start of the two-year budget cycle last June 30. Some layoffs were due to the union representing most of the state's 11,500 workers rejecting a furlough plan that Lynch had proposed as an alternative to layoffs. Other layoffs were due to program cuts and the closure of a prison.

"It would be good if they looked first at other ways rather than putting the fear out there that there would be layoffs," said Jay Ward, political director for the State Employees' Association.

Lynch attributed the shortfall to lagging revenues due to the recession, a state Supreme Court ruling denying the state's right to $110 million from a surplus insurance fund and increasing demands for social services.

Lynch told agencies to plan on reducing spending 2 percent for the rest of this year and by 8 percent next year. He said he asked them to come up with possible cuts over the next few weeks. Lynch said he will review proposals and then begin implementing them.

"We'll do whatever we can to protect essential services," he said.

Lynch said the cuts are needed to deal with an anticipated $140 million shortfall by the end of the next fiscal year on June 30, 2011.

The reductions are in addition to $43 million in cuts being made at the Department of Health and Human Services. HHS Commissioner Nicholas Toumpas unveiled $28 million of the cuts last week, but is still hunting for $15 million more. Some of the cuts are to free up money to pay for a rising demand for services, such as welfare.

Lynch said he is committed to ensuring the budget is balanced and the state meets its core responsibilities, which include preserving public safety, protecting the most vulnerable citizens and funding education.

"Though we are beginning to see improvements in the economy, we must continue to be vigilant with our management of the state budget," Lynch said.

The cuts will be made to the state's $3.2 billion, two-year budget from general taxes. The total budget is $11.5 billion once federal and other funds are included.