Governor Lynch Tells State Agencies Budget Requests Too High

Governor Lynch Tells State Agencies Budget Requests Too High

Directs Agencies to Develop Budgets That Do Not Exceed Fiscal Year 2007; Cut Vacant Positions

CONCORD - Saying state agency budget requests came in at unacceptably high levels, Gov. John Lynch today directed state agencies to develop budgets that do not exceed fiscal year 2007 and to cut long-term vacant positions.

Gov. Lynch gave the instructions as he opened three days of hearings on state agency budget requests.

"We will develop a fiscally responsible budget that meets the needs of our citizens. To meet that goal, however, will require all of us to roll up our sleeves and work together. It will require all state agencies to take a hard look at their budgets and to develop better ways of conducting the people's business," Gov. Lynch said.

Agency budget requests for the next biennium are $1.2 billion higher than the current budget.

"That proposed increase is not acceptable," Gov. Lynch said. For example, Health and Human Services alone requested a $428 million - or 13 percent - increase in its maintenance budget.

"That is why I am now directing agencies to put together budgets that do not exceed fiscal year 2007 adjusted authorized spending. This budget should absorb salary and benefit increases, as well as any other increased costs of operations," Gov. Lynch said.

In addition, Gov. Lynch directed agencies to eliminate any positions from their budgets that have been vacant for longer than six months. There are currently 742 positions in state government that are in the category, representing approximately $73 million in salary and benefits over the next biennium. Nearly half of those positions have been vacant since July 1, 2005.

"I recognize there are some vacant positions that are necessary, particularly in direct care. And we will review these vacancies with departments individually and decide which positions it may make sense to add back," Gov. Lynch said.

In addition, Gov. Lynch directed departments to limit their budgets for current expense, out-of-state travel, and equipment to the fiscal year 2006 spending levels.

When he issued his budget instructions in July, Gov. Lynch directed all state agencies to use a zero-based budgeting approach to build their budget, and to look toward streamlining costs and eliminating inefficient programs.

"We will review these budgets with agencies carefully, looking at their entire cost structure, not just the costs associated with general funds," Gov. Lynch said.

In addition, Gov. Lynch in July directed agencies to provide detailed information about the use of consultants.

"Consultants may make sense for a small number of specialized or short-term projects, but any consultant spending should be the exception, not the rule. That is why we will be scrutinizing any proposed use of consultants in department budgets," Gov. Lynch said.

Gov. Lynch will present his proposed budget to the Legislature by Feb. 15, 2007.

"We faced a great challenge with the last budget and came together to pass a balanced budget that meets the needs of our people. I am confident that we will do the same with the budget," Gov. Lynch said.

A copy of Gov. Lynch's remarks is below.

# # #

Gov. John Lynch
Open State Agency Budget Hearings
Legislative Office Building, Concord
Friday, November 18, 2006

Good morning. I want to thank you all for coming this morning. During the next several months, we will be working closely together, and with Democrats and Republicans in the legislature, to develop the best possible budget for our state.

We face challenges. Our state's population, and therefore the needs we must meet, is increasing. Benefit costs are increasing. And the federal government continues to cut funding for key services.

But we will develop a fiscally responsible budget that meets the needs of our citizens.

To meet that goal, however, will require all of us to roll up our sleeves and work together. It will require all state agencies to take a hard look at their budgets and to develop better ways of conducting the people's business.

All agencies should have already used a zero-based budgeting approach to build their budgets, with an eye toward streamlining costs and eliminating inefficient programs. We will review this with you individually and carefully. And we will be looking at your entire cost structure, not just the costs funded by general funds. I will expect all agencies to also justify the costs associated with federal funds and any other funding sources.

Agency budget requests for the next biennium are $1.2 billion higher than the current budget. That proposed increase is not acceptable.

For example, Health and Human Services alone requested a $428 million - or 13 percent - increase in its maintenance budget.

That is why I am now directing agencies to put together budgets that do not exceed Fiscal Year 2007 adjusted authorized spending. This budget should absorb salary and benefit increases, as well as any other increased costs of operations.

In addition, agencies should eliminate any positions from their budgets that have been vacant for longer than six months. There are currently 742 positions in state government that are in the category, representing approximately $73 million in salary and benefits over the next biennium. Nearly half of those positions have been vacant since July 1, 2005.

It does not make sense for agencies to request funding for positions that will never be filled as a way of meeting a lapse target. That is the wrong way for us to do business.

I recognize there are some vacant positions that are necessary, particularly in direct care. And we will review these vacancies with departments individually and decide which positions it may make sense to add back.
In addition, I am asking departments to limit their budgets for current expense, out-of-state travel, and equipment to the Fiscal Year 2006 spending levels.

When I issued budget instructions in July, I directed agencies to provide detailed information about the use of consultants. Consultants may make sense for a small number of specialized or short-term projects, but any consultant spending should be the exception, not the rule. That is why we will be scrutinizing any proposed use of consultants in department budgets.

If you have not already met, I would like to introduce Linda Hodgdon, my budget director. Linda will be leading this process. I expect every state agency to work closely with Linda and respond in a timely, accurate and comprehensive way to any of her requests for information.

We faced a great challenge with the last budget and came together to pass a balanced budget that meets the needs of our people. I am confident that we will do the same with the budget.

I will be very involved in the budget process, and I look forward to working with all of you - lawmakers, agency heads, and the people of New Hampshire - to make sure we put forward a fiscally responsible budget that meets the needs of New Hampshire.

Thank you.

http://www.nh.gov/governor/news/111706.htm