CONCORD — A Wall Street firm is downgrading New Hampshire’s bond outlook from stable to negative, but at the same time affirmed the state’s high bond rating.
Standard & Poors revised its outlook Monday, citing a recent lower court ruling that a hospital tax generating $185 million in revenue a year was unconstitutional. Standard & Poors said the amount is significantly higher than the state’s $9 million in savings. The firm also noted that the public pension fund has a large unfunded liability.
Gov. Maggie Hassan said yesterday the announcement reinforces the need to address the tax issue and its implications for the state budget.
“The Standard and Poor’s announcement reinforces the need for hospitals, providers, legislators and state officials to quickly work together to address the budget and healthcare challenges posed by the Medicaid Enhancement Tax ruling, a direct result of shortsighted action taken in the FY 2012-2013 budget,” she said in a prepared statement. “We have worked together to address issues that affect our bond rating, such as finally funding a new women’s prison and reaching a landmark settlement in the state’s mental health lawsuit. In addition, I continue to believe that using a significant portion of our surplus to strengthen the state’s Rainy Day Fund is a fiscally responsible step forward that will improve our long-term financial standing.”
Senate President Chuck Morse said the revised outlook also shows the need to put more into savings and to address the pension system’s unfunded liability.
“Standard and Poor’s adjustment to the state’s bond outlook emphasizes the importance of reaching a long-term solution to how we fund our state’s health care safety net programs,” Morse said.
House Republican Leader Gene Chandler, R-Bartlett, weighed in, too.
“We were warned by our state treasurer in January that without a significant change in policy in regards to our Rainy Day fund, we could see our credit rating drop,” he said. “While this is not the sole factor in the ratings change, it does compound the problem and affects our ability to address potentially major issues like what we face with the recent Medicaid Enhancement Tax court rulings.”