New Hampshire Revenues Dip Below Long-Term Trends
Concord, NH – New Hampshire’s state revenues in the fourth quarter of 2024 fell significantly below the 15-year trend, according to a report by The Pew Charitable Trusts. The 5.8% decline marks the highest drop in New England and ranks as the eighth largest nationwide. This reduction follows two years of decreasing revenues, exacerbated by the cessation of federal pandemic relief funds.
The state’s lawmakers had previously reduced tax rates during a surge in revenue post-pandemic, and they continue to phase out the interest and dividends tax by the end of 2024. This year’s biennial budget is expected to be one of the most challenging in 15 years as budget writers grapple to meet necessary spending levels.
While there are signs of revenue stabilization, the report indicates sluggish collections. Nationally, 27 states were below their long-term revenue trends at the end of 2023, with this number rising to 40 states by the end of 2024. Declines in revenue collections mirror those seen during past recessions, but this downturn occurs without a formal economic recession.
The report highlights concerns over long-term budget commitments made during the prior revenue boom, as states contend with rising fiscal challenges. New Hampshire’s business tax revenue has drastically reduced, indicating potential struggles in meeting fiscal projections for 2025.
As states navigate these fiscal uncertainties, the implications of federal policy changes, including potential cuts to Medicaid, loom large, further complicating budget planning for the years ahead.
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