By GARRY RAYNO, InDepthNH.org
CONCORD — Saved by amnesty.
While the bottom line for January’s state revenues may look good, it belies some troubling trends that are likely to led to a revenue deficit at the end of the 2026 fiscal year.
The state’s two-and-a-half month tax amnesty program, which lawmakers expected to raise about $5 million last summer, has been a godsend for the last two months turning what would be revenue deficits into surpluses.
Last month the amnesty program produced $46 million for the state coffers, and in January another $16.5 million totaling $62.5 million.
Without the amnesty money, the state’s revenue picture would be a lot darker than it is more than halfway through the fiscal year.
In January, the state took in $193.1 million, while budget writers anticipated $184.8 million, for a $8.3 million surplus.
However, without the amnesty money, the total is $176.6 million or a $6.1 million deficit.
The amnesty money has also helped the revenue totals for the fiscal year to date slide into positive territory as the state took in $1.4 billion, a $44.2 million surplus, but without the amnesty money the state would be facing a revenue deficit of $14 million.
Without the amnesty money, the state took in $18.3 million less than a year ago, and the total for the year to date would be $25.3 million less than a year ago.
“It is important to note that without that unusual windfall, regular revenues remain $14.0 million behind budget for the year and the state’s largest revenue source, business taxes, are below plan by $40.1 million,” according to the Department of Revenue Administration.
Business taxes had three straight months of producing more than they did the year before until January, when they again produced less than a year ago, which has been the trend for the past two years.
For January, business taxes produced $32.5 million, which is $19.2 million less than estimates and $5.5 million less than a year ago. For the year to date, business taxes produced $483.6 billion, which is $40.1 million less than estimates and $11.2 million less than a year ago.
According to the DRA, the decrease from the prior year was due to a decrease in corporation estimates, returns, and extension payments.
The state’s second biggest tax producer, the rooms and meals tax, produced $25.2 million in January, $2.2 million below estimates and $100,000 less than a year ago.
According to DRA, the activity for taxable meals was up 1.7 percent and hotels was up 3 percent.
For the year to date, the levy produced $218.6 million, which is $3.7 million below estimates, but $5.5 million more than a year ago.
On the positive side, the returns from the Lottery Commission, which goes to the Education Trust Fund, produced $28.2 million for January, which is $8.4 million more than estimates, but $300,000 less than a year ago.
January’s revenues were due to a large Powerball jackpot, the DRA said.
For the year to date, the Lottery has produced $127.5 million, which is $30 million more than estimates and $24.3 million more than a year ago.
What has been a disappointment to budget writers has been the revenue from the new video slot machines, which have been slow to take off, producing $1.9 million in January, below estimates by $4 million The terminals have produced $3.3 million for the year to date, which is $14.6 million less than estimates.
The real estate transfer tax produced $21.2 million in January, which is $3.8 million more than anticipated, and $4.1 million more than a year ago.
According to the DRA, the number of transactions were up by 9.5 percent and property values were up 23.3 percent.
For the year to date, the levy produced $149.8 million, which is $21.9 million more than a year ago, and $6.8 million more than estimates.
The Other category continues to perform better than anticipated, producing $18.3 million, which is $9.7 million more than estimates, but $13.2 million less than a year ago.
The interest earned on federal COVID relief and rescue money not yet spent as well as past surplus funds has driven the rise in revenues for the category.
The DRA also said the large number for January is also due to timing for reimbursements for indirect costs.
For the year to date, Other has produced $83.8 million, which is $20.7 million more than estimates, but $13.2 million less than a year ago.
The tobacco and insurance taxes and securities revenues were ahead of estimates for the month, but the communications, beer and utility property taxes were below estimates as were revenues from the liquor commission and court fines and fees.
The Highway Fund comprised largely of the gas tax and vehicle registrations produced $22 million for January, which is $700,000 less than estimates and a year ago.
For the year to date, the fund totaled $152.4 million, which is $6.3 million less than estimates and $6 million less than a year ago.
The Fish and Game Fund, comprised of fishing and hunting licenses, collected $1.3 million for the month, which is $400,000 more than estimates and $100,000 more than a year ago.
For the year-to-date, the fund collected $8.3 million, which is $300,000 more than estimates and $200,000 more than a year ago.
Garry Rayno may be reached at garry.rayno@gmail.com.