For the twelve months preceding September 2009, New Hampshire revenues destined for the General Fund and Education Trust Fund were 6% less than for the twelve months ending a year earlier. The decline in state revenues is broad based, affecting all revenue sources, whether from business, consumer spending, or gaming.
In December 2007, when the latest national recession started, state revenues were growing by 7% annually, but the rate of growth in state revenues started to slow. By October 2008, total state revenues were decreasing compared to the previous 12 months.
The state government is funded mainly by specific taxes on meals and rooms, beer, tobacco, business profits, lottery sales, liquor sales, interest and dividends, and real estate transactions, to name just a few sources. Each revenue source has shown a unique pattern, but all are declining.
The chart shows the year over year change in total revenue, and for selected sources – business taxes (the combination of the Business Profits Tax and Business Enterprise Tax), Meals and Rooms, and Sweepstakes (Lottery) revenue.
Meals and Rooms tax revenue grows more slowly, but is also more stable, than most other revenue sources. Business taxes were increasing at close to 15% percent annually, before slowing considerably in March 2008. Business taxes declined by 20% in the twelve months ending September 2009, compared to a year earlier. And, state sweepstakes revenue, which consists of lottery and scratch ticket sales, showed weakness in March 2007 and have been declining almost consistently since May 2007.
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