From GraniteMemo.com full article HERE
Federal pandemic funding is expiring. Inflation and interest rates are climbing. The risk of an economic downturn is real.
Ethan Dewitt, New Hampshire Bulletin
December 11, 2022
A string of state commissioners filed into the State House hearing room late last month, each with their own mission. For three days, Gov. Chris Sununu and his budget director would hold budget hearings. Administration officials detailed the progress within their departments and outlined their financial needs, making the case for more funding when Sununu crafts his budget next year.
But before the proceedings began, Sununu gave a warning.
“I think there’s a lot of opportunity on the table to be sure, but we also have to be cautious with where the economy as a whole could be going,” he said.
He continued: “There’s really no way to avoid some form of a national recession. It is real. It is coming.”
Sununu isn’t alone in that concern: A report by Moody’s Analytics in September highlighted what its authors called “a crucial juncture” for state governments. Propped up for two years with record flows of federal COVID-19 stimulus funds, state governments are about to see much of that funding expire. And with rising inflation and climbing interest rates intended to curb that inflation, the risk of an economic downturn is real.
Preparing for that downturn, the Moody’s report said, will be critical for state lawmakers in the next few years. The New Hampshire Legislature must pass its next two-year budget by July 2023; by tradition, Sununu will present his draft budget to lawmakers in February.
But New Hampshire is among the five least-prepared states for a recession, the analysis concluded; if the state were to face a moderate recession, it could see an 18.1% tax revenue shortfall, one of the biggest in the country.
Read the rest of the article HERE