Governor Hassan Orders Hiring, Purchasing Freeze

Gov. Maggie Hassan will issue an executive order to freeze "generally funded hiring, equipment, purchasing and out-of-state travel" to offset April's drop in revenues.

Hassan announced the move in a letter to the Joint Legislative Fiscal Committee Chairwoman, Mary Jane Wallner of Concord, and requested the committee take it up next week.

The freeze is due to shortfalls in revenues from business taxes and the interest and dividends tax, to the tune of $22 million.

State revenues remain above plan for this fiscal year, but the cushion was reduced to $3.9 million in April, according to the governor.

"The Department of Revenue Administration continues to analyze the reasons for these sudden drops in revenue. But the decreases appear to be related, at least in part, to a number of changes in the state tax code in recent years, as well as to businesses beginning to apply various tax credits and carry forwards accrued during the recession. Revenues from business taxes and the interest and dividends tax actually came in below last year’s receipts in April."

With a freeze in place, agencies will have to request a special waiver in order to make purchases deemed critical to operations.

Senate President Chuck Morse, R-Salem, issued a statement on the executive order announcement:

"I appreciate the Governor’s long overdue announcement of a plan to restrict state spending. As she recognizes in her letter, the issues facing our state today are not revenue problems, they are spending problems.

"As Governor Hassan noted, state revenues are slightly above plan for the year as a result of the Senate Republican’s responsible revenue estimates. I’m also pleased the Governor has finally recognized the necessity of the back of the budget reductions included the budget, and am confident that today’s letter will put to bed ongoing attempts to reopen that discussion.

"As announced last week, Senate Finance Chairman Jeanie Forrester will continue to work with the Departments to evaluate their spending and lapse positions for the current fiscal year in order to prepare legislative leaders should events necessitate additional legislative action. We welcome the Governor’s involvement in these constructive conversations."

William Hinkle, press secretary to Governor Hassan, responded to the Senate President's remarks:

"Through March, state revenues were running about $25 million above plan, and Governor Hassan had already acted to implement the Fiscal Year 2014 component of the employee-related back-of-the-budget cut. Revenues in April came in drastically below plan and below last year, driven at least in part by short-sighted decisions made by the previous legislature. The Governor and the legislature passed a bipartisan budget , with shared priorities and shared spending levels. Now that the revenue situation has abruptly changed, the Governor will continue working with members of both parties to resolve these issues in order to strengthen our fiscal standing and invest in the priorities that will keep our economy moving forward."

Mary Jane Wallner said the executive order was a proper step to take. In a statement, she said, "We applaud the Governor’s pro-active planning and believe it is a demonstration of responsible budget management. The House will join the Governor in her efforts by taking belt tightening measures."