Wednesday, February 22, 2012

On Wednesday, the Senate voted to amend the New Hampshire Constitution to create an artificial "spending cap" that would require a supermajority of Legislators to approve any increase to state spending which is over the rate of inflation.

The Senate's version of CACR 6 sets up a conflict with the House, which earlier had approved a version of CACR 6 that would require a supermajority of Legislators to approve any increase to taxes and fees.

The House version was authored by House Speaker William O'Brien.

The Senate version was authored by Senate President Peter Bragdon.

Both versions attempt to set the current state budget in stone. Requiring a supermajority of Legislators to approve any future increases -- either of revenue or spending -- would lock the state into recessionary tax and spending levels. It could also cause the bond rating agencies to drop New Hampshire's bond rating (as they have with some other states, due to supermajority requirements).

CACR 6 “would ensure the state continues to feel the effect of this recession and all future downturns long after they pass,” said Jeff McLynch, executive director of the New Hampshire Fiscal Policy Institute. “It would prevent the state from making investments in education, infrastructure and other public services that are critical to making New Hampshire an attractive place for businesses to locate and expand and for people to live, work and visit.” Read the full NHFPI press release here.
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