Morse: Time to Remove Revenue Cap on Rainy Day Fund

CONCORD, NH - Senate President Chuck Morse, R-Salem, has forwarded an amendment to remove the cap on the Revenue Stabilization Account (better known as the Rainy Day Fund) onto HB 1527 in the Senate Finance Committee, according to a press statement.

Removing the cap would allow the state of New Hampshire to transfer funds above the 5 percent of revenue cap set in 1993.

“Building the Rainy Day Fund in New Hampshire has been a priority for the Senate for many years and until recently, we were unaware of the cap which limits how much money can be transferred into the Rainy Day Fund in a given fiscal year," Morse said. "The Rainy Day Fund had been critically low for many years, maintaining a balance of around only $9 million and not in danger of hitting the cap, despite a recommendation made in 2014 by the State Treasurer that an appropriate reserve level would start at $140 million.”

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Morse said the amendment would remove any limits to growing the state’s reserve fund and added that he was "proud to file and pass legislation" requiring the first 10 percent of all funds received by the state in a settlement above one million dollars be deposited into the Rainy Day Fund.

"With these new parameters, we should be able to rapidly build the Rainy Day Fund and could potentially hit the existing cap as a result of the MTBE lawsuit settlement," he added. “We also took steps to more than double the Rainy Day Fund in the current budget, which we were pleased to see Governor Hassan sign into law. In addition, we increased appropriations to the Rainy Day Fund in SB 464 in the current session.”

Morse stated that the job of legislators was to ensure New Hampshire is protected financially from unforeseen economic downturns or emergencies while also improving the state’s credit rating and overall financial health. The state Senate, he added, has made sure building up this fund has been a priority throughout the budget process and now at another critical juncture.

"We are providing a plan to extend saving capacity that will work to strengthen New Hampshire’s economic standing into the future," he added. "I ask my colleagues in the Senate to support yet another step in rebuilding the State’s financial health."