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Op/Ed: The $800 Million Budget Deficit Myth

State Rep. Cindy Rosenwald takes aim at what she sees as Republican budget mythology.

By State Rep. Cindy Rosenwald, D-Nashua

For nearly two years now, Republicans in the State House have been telling a favorite story. They have told it so often that it has taken on the aura of sacred truth. The story goes that when the Republicans swept into power in 2010, they, and only they, were able to finally balance the state budget and correct an $800 million deficit left by the Democrats.

Republicans love their sacred story, and I am sure many of them believe it. The problem is, this story is not a sacred truth; it is a myth. The actual truth is much more pedestrian: biennial budgets are always balanced, and there never was a Democratic deficit of any size. In fact, if one looks at the numbers, Democrats left the state with a surplus at the end of the most recent biennium.

Let’s look at this budget deficit story a bit more closely. The Democratic budget, which ended June 30, 2011, was balanced. Not only did the Democratic majority not leave a deficit during the worst recession in most people’s memory, we actually left a net surplus of $11 million, which the House wanted to put in the Rainy Day Fund this year.  Leaving a small surplus at the end of a difficult budget period looks like good fiscal management, doesn’t it?

So if Democrats leaving the state budget in good shape with an $11 million surplus is the truth, how did the Republicans turn the reality of the Democratic surplus into the myth of the Democratic deficit? Well, the answer lies in the additional federal stimulus money that flowed into New Hampshire for two and a half years through the American Recovery and Reinvestment Act. 

This extra money, $802 million in total, helped maintain essential safety net programs for vulnerable residents hit hard by the recession. The federal money was one-time assistance. The Democratic majority knew all along it would not continue, and that budget cuts would have to be made during the following biennium so that there would not be a deficit. There never was a carry-forward loss; the Democrats never left the state with a deficit. Remember, there was actually an $11 million surplus left by the Democratic majority.

So the Democrats’ deficit is a myth. It makes a good story, but it just isn’t true. What is true, however, is that the Democratic budget surplus is being used to help erase a deficit in the first year of the Republican budget.

The story here is that the Republican leadership in the House insisted on cutting the tobacco tax by 10 cents a pack, ignoring testimony that this tax cut could lead to a multi-million dollar state revenue loss. The cost of cigarettes never dropped for the consumer, but cigarette companies gained a huge subsidy from New Hampshire’s tax payers. In fact, this corporate welfare has led to the state’s cigarette tax revenues falling off almost $20 million so that cigarette companies could increase their profits. 

Governor Lynch will be able to apply the surplus left by the Democrats to erase the deficit built into the budget by the Republicans so that they could give a huge tax break to cigarette companies. Who can blame the Republicans for not wanting to tell this part of the narrative? No wonder they stick to the other story.

Everyone loves a good tale, but educated voters look beyond myth for the true story. The truth is that there never was any deficit in the last Democratic budget.  The real Democratic legacy was a budget surplus that erased a potential deficit created by the Republicans. 

(Representative Cindy Rosenwald of Nashua is serving her fourth term and is a member of the House Finance Committee.)

News Flash July 11, 2012 at 05:56 PM
Sponge Bob Democrat Economics Exposed
News Flash July 11, 2012 at 07:49 PM
Three things cannot be long hidden: the sun, the moon, and the truth. Buddha
Atlant July 11, 2012 at 08:17 PM
Do you figure that by posting 75% of the replies in this topic* that you're somehow "winning" something? * And most of your replies are nothing but insults.
News Flash July 11, 2012 at 08:27 PM
Maybe the Democrats should not LIE about the 17 million surplus vs the 800 million dollar deficit. Who is insulting who.
Jack Flanagan July 12, 2012 at 02:21 AM
Mr Healey, 30 were removed and I am not sure how many reduced. No to the checkbook questioned. I am glad you have given up on trying to argue against facts. But now it is insults. Rep Jack Flanagan
News Flash July 12, 2012 at 03:38 AM
Democrats always fold under the pressure of the truth
Andrew M. Zuba July 12, 2012 at 03:31 PM
Wasn't $500k moved from the conservation fund to the general fund to help balance the budget? I thought the account was funded by fishing and hunting license fees and that the intended use was for upgrades to boat ramps, trails and recreation areas and the like. Will that money ever be replaced or has it vanished forever? I do not know who took the money but I would like to see it returned if that is at all possible. There are shenanigans on both sides of the aisle so I take Rosenwald's offering here w/a healthy amount of skepticism.
News Flash July 12, 2012 at 07:02 PM
"Evil Tea Party Manipulates NH House To Produce First Balanced State Budget Since 2006" http://granitegrok.com/blog/2012/07/evil-tea-party-manipulates-nh-house-to-produce-first-balanced-state-budget-since-2006
News Flash July 12, 2012 at 07:38 PM
About That 800 Million Dollar Deficit http://granitegrok.com/blog/2012/07/democrat-house-rep-cindy-rosenwald-about-that-800-million-dollar-deficit
Super Fun Size July 12, 2012 at 08:10 PM
What? A right wing activist wants to continue the lie? Who would have thought?
Super Fun Size July 12, 2012 at 08:19 PM
New Hampshire's Overall Economic Ranking Dropped from 10th to 34th in “America’s Top States for Business”rankings. NH has seen its rankings in workforce, economy, infrastructure and transportation, and education all drop. These areas received what the Nashua Telegraph called “devastating” blows from the GOP legislature’s cuts to the state budget. http://nhdp.org/under-gop-nh-drops-in-cnbcs-best-state-for-business-rankings-republican-legislatures-cuts-have-hurt-new-hampshire/
News Flash July 12, 2012 at 08:21 PM
Quoting the NH Democrat Party. Healy now that is a joke
News Flash July 12, 2012 at 08:23 PM
Healy you got a problem reading what Rosenwald said. I think so. Then again democrat activists like yourself have a hard time with the truth
Jim U Lacrum July 14, 2012 at 05:13 PM
This article, the story upon which it is based, and the comment thread are a solid microcosm for the immature playground fight that our political system has become. It costs us absurd amounts of money and freedom so that these children can keep us bickering with each other while they carve up the playground amongst their respective camps. We need to drop this foolish idea that every issue of public policy needs to be labeled "liberal" or "conservative," "left-wing" or "right-wing," or "Democrat" or "Republican" in order for anyone to make a decision about it. We've been divided and conquered this way for a very long time, and it has gotten us nowhere good. The two parties, for all their apparent differences, have one major interest in common: maintaining their own power at any expense to the public. Every problem they encounter while in office is supposedly the fault of the other party; they feed on our polarization in order to continue taking turns holding the reins. The truth is that most of our problems are the fault of both parties, collectively, and we need to be rid of them both.
Super Fun Size July 14, 2012 at 06:13 PM
You ran against these evil taxes but keep them?
Super Fun Size July 14, 2012 at 06:15 PM
NF, You should try to work on your spelling, lots of people will pick on your for that.
Seamus Carty July 16, 2012 at 11:47 PM
"lots of people will pick on your for that"? Pick on your what? Maybe this was meant to be "pick on you for that"...
Seamus Carty July 16, 2012 at 11:49 PM
"Prior to January 2007, the New Hampshire’s State Budget was just over 9 billion. The State budget Republicans inherited when they won the legislature back four years later was 11.5 billion. So Democrats, when given complete unrestricted stewardship of the budget and a Democrat governor willing to sign off on it, ballooned the cost of your state government by 17.5% in the first biennium (before the fiscal crisis) and by as much as 25% over four years" "it took 219 years (2628 months) to get the New Hampshire budget to just over 9 billion dollars a year. New Hampshire Democrats added 2.5 Billion to that in just 48 months." Any dispute on these numbers?
Joe Barton July 24, 2012 at 02:05 PM
Democrats lie all the time just look at William Hudson Connery III http://granitegrok.com/blog/2012/07/running-in-rockingham-17-a-democrat-socialist-from-tenessee
C Barry July 24, 2012 at 02:22 PM
Democrats cant help but lie. They would not get elected if they told the truth now would they.
Super Fun Size July 24, 2012 at 02:29 PM
C Barry make baseless comments.
C Barry July 24, 2012 at 02:31 PM
Name one time where a democrat has told the truth.
Super Fun Size July 24, 2012 at 02:35 PM
C if Barry could pick out a lie.
Joe Barton July 24, 2012 at 02:39 PM
It depends on how you look at it but the bottom line is the Democrats left 802 million in unfunded liabilities to the next session. These liabilities were covered by Federal stimulus money that would knowingly not be available for the next house session. So a better analogy would be the democrats using a credit card to pay for stuff; getting a cash advance; and then leaving the next session to pay the bill when it comes in.
C Barry July 24, 2012 at 02:43 PM
Tell me one time a democrat has told the truth about the 800 million deficit. Democrats lie abut spending and taxes.
Super Fun Size July 24, 2012 at 02:55 PM
Are you talking about the one time expenditure of stimulus money that the GOP wants to call a deficit?
Super Fun Size July 24, 2012 at 02:56 PM
Not even close Joe.
Jack Flanagan July 24, 2012 at 03:25 PM
Joe Barton, you are 100% correct. The Democrats had left $900 million dollars of UNFUNDED mandates or a deficit in spending. The Republican controlled legislature reviewed anticipated revenues, sat down with all department heads to review budgets and then made the required cuts. The hypocrisy is that the Democrats knew the shortfall was coming, but now just throw bombs because they don't like the process or the cuts. To Mr. Healey, you have no clue what you are talking about, AGAIN!
News Flash July 24, 2012 at 03:26 PM
Right on Joe. You have it absolutely correct. Ignore the PAID CAMPAIGN WORKERS.
C Barry July 24, 2012 at 03:30 PM
Who the heck is the democrat jerk that talks and talks. The guy does not shut up. Just like an old women.

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