House Republican Leader Reacts to S&P Downgrade of State Bond Rating

CONCORD – House Republican Leader Gene Chandler (R-Bartlett) today offered the following reaction to Standard & Poor’s recent report (attached) revising the outlook from stable to negative on New Hampshire’s general obligation and state-guaranteed bonds citing, “Relatively low reserves, with a rainy day fund balance of less than 1% of expenditures,” and, “Low pension funding level, currently 56.7%, well below that of most other states, which we believe could result in additional pressure on future budgets, “ in addition to concern over the recent Medicaid Enhancement Tax court rulings.

House Republican Leader Gene Chandler (R-Bartlett)

“We were warned by our State Treasurer in January that without a significant change in policy in regards to our Rainy Day fund, we could see our credit rating drop. While this is not the sole factor in the ratings change, it does compound the problem and affects our ability to address potentially major issues like what we face with the recent Medicaid Enhancement Tax court rulings.”

“When situations like this occur, even though we realize it will not cover the whole shortfall, it is important to have a reserve account that can significantly offset the impact. NH’s rainy day account holds only 0.7% of unrestricted general fund revenue. This is why it is important that we pass SB415 as soon as possible to ensure last year’s surplus is saved and not spent, and will be there for us in the event of a revenue emergency. Even if the MET issue is resolved, this is a prime example of why having sufficient funds in reserve is the responsible thing to do.”

“Republicans have and will continue to put forward reasonable proposals to help address the massive unfunded liability in our pension system. Unfortunately, our efforts in the House this year to study alternatives to our current broken system have been dismissed by the Democratic leadership.”