Hassan’s budget relies on cigarette-tax increase, a casino and ‘conservative’ revenue estimates
A pack of cigarettes would cost more under Gov. Maggie Hassan’s proposed state budget, which also relies on revenue from casino gambling.
Hassan, a Democrat, presented a budget to the Legislature yesterday that proposes general-fund spending for the next two years of $2.8 billion, an increase of 7.1 percent, or $184.2 million, from the current biennium.
To help pay for it, she’s proposed allowing a single casino to set up shop in the state, which she expects to generate $80 million in license revenue.
Her other revenue proposals are less dramatic.
Under her budget, the state tobacco tax would rise. The state’s tax was cut to $1.68 per pack in the last budget, and that 10-cent cut will be automatically reversed later this year.
Hassan has proposed an additional increase of 20 cents, taking the tobacco tax to $1.98 per pack and bringing in an estimated $20 million more each year.
According to the Campaign for Tobacco-Free Kids, an advocacy group, the national average is $1.48 a pack. Even with Hassan’s proposed increase, New Hampshire would have the lowest per-pack tax in New England, just below Maine’s $2 tax.
“The higher the cost of cigarettes go, the less children will get into smoking,” said Rep. Jim MacKay, a Concord Democrat and chairman of the House Health, Human Services and Elderly Affairs Committee. “I think there is a very good chance of it passing.”
Republicans aired few complaints yesterday about Hassan’s baseline estimates for revenue from traditional state levies like the business profits tax, the business enterprise tax, the meals-and-rooms tax and the interest-and-dividends tax.
Senate Majority Leader Jeb Bradley, a Wolfeboro Republican, said Hassan should be praised for “very conservative revenue estimates. That’s very good.”
In all, her budget estimates revenue from those taxes will increase 2 percent in 2014 from the current year, and rise 1.9 percent in 2015 from 2014.
Hassan also assumes the state will see a big increase in revenue from the state’s insurance tax in fiscal 2015, as health coverage expands under the implementation of President Obama’s 2010 health care reform law. That’s expected to generate an additional $22.6 million for the state that year.
Hassan’s budget also tweaks the formula for the state’s Medicaid Enhancement Tax, sending more money to hospitals for uncompensated-care grants and less to the state’s general fund.
Among other revenue-side changes, Hassan wants to:
∎ Suspend most of the pending changes to state business-tax laws that were passed by the last Legislature but won’t go into effect until the next biennium, which begins July 1.
∎ Repeal the state’s new education tax credit program, also a product of the last Legislature.
∎ Add processing and auditing positions at the Department of Revenue Administration.
Bradley said the Republican-led Senate, and the Finance Committee led by Salem Republican Sen. Chuck Morse, will take a hard look at the guts of the budget once it passes the Democratic-led House this spring.
“How do the numbers add up? And we can’t be paying for things with uncertain revenue sources,” Bradley said. “So, as the budget goes through our good friends in the House and gets to Sen. Morse’s committee, these are the things that I think Republicans, but certainly Democrats also, will be asking, to make sure that the numbers add up and this is a balanced budget.”
(Sarah Palermo contributed to this article. Ben Leubsdorf can be reached at 369-3307 or firstname.lastname@example.org or on Twitter @BenLeubsdorf.)