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New accounting rules hit surplus

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This week state comptroller Gerard Murphy told budget writers in the legislature that new accounting rules will reduce last year’s budget surplus by roughly $20 million.

This was bad news for Republican budget writers, who based their budget proposal on a $49 million surplus. Gov. Maggie Hassan vetoed that budget proposal in June.

“While the $20 million figure is just an estimate at this time, potential liabilities such as this represent some of the concerns that the governor expressed about the legislature’s over-estimated carryforward amount when she vetoed the fiscally irresponsible Committee of Conference budget,” Hassan’s communications director, William Hinkle, told the Union Leader.

However, the comptroller’s estimate may not be accurate.

The new accounting rules require employers, such as the state, to show a share of the retirement system’s unfunded liability on balance sheets – but employers’ contributions to the retirement system will not change.

In a press release the New Hampshire Retirement System (NHRS) said, “While [we] made these changes in an effort to make financial statements more transparent, a potential unintended consequence is that these new numbers may cause undue confusion and concern. The bottom line is, these are accounting changes only and nothing has changed with the way NHRS is funded or how much employers are required to contribute to the plan.”

Marty Nolan of the NHRS told the Union Leader that his office is reaching out to the comptroller “to better understand the issue and see if we can be of assistance in clarifying it.”

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