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Grant Bosse

Grant Bosse: Legislature needs to watch out for budget gimmicks

The New Hampshire House Finance Committee begins its work on the state’s two-year budget this week, and the governor has already made lawmakers’ job a lot harder. Her budget recommendations are incomplete, violate New Hampshire law and use a variety of gimmicks to hide increased spending.

The first problem is that Gov. Maggie Hassan hasn’t actually submitted her entire budget yet. State law gives the governor until Feb. 15 to present her recommendations for state expenditures, her estimate of state revenue and the changes in state law that would be required to implement that budget. The taxes and spending make up House Bill 1. The statutory changes become House Bill 2. Hassan hasn’t written her version of HB 2 yet, putting the entire budget process at least two weeks behind schedule.

This may be Hassan’s first budget, but New Hampshire governors have a long rap sheet when it comes to breaking this particular law. John Lynch’s first budget was introduced over a month late, but his next three missed the deadline by just a couple of weeks.

Craig Benson appears to have made the deadline for his sole budget. The House introduced HB 2 on Feb. 20, 2003, but that was the first session following the governor’s Feb. 13th budget address, and thus the earliest opportunity to file the bill.

Jeanne Shaheen was another repeat offender. Her first version was only week late, but her second budget wasn’t introduced until late March. During Shaheen’s third term, House Finance Chairman Neal Kurk used

the prior year’s budget as the baseline for HB 2, rather than the governor’s recommendations, and he introduced it on Feb. 15.

Neither of Steve Merrill’s recommendations came in until March, so it’s not as if Democrats are the only ones incapable of meeting a deadline. While House Finance should be accustomed to this predictable delay, it still abbreviates an already packed budget schedule.

Shades of Lynch

Hassan is reviving several of Lynch’s budget tricks. Lynch moved the entire Liquor Commission out of the general fund, and then bragged about cutting general fund spending. Hassan is taking $56 million in board and care revenue off the books in order to claim that her budget only increases general fund spending by 7 percent. But we’re still spending that $56 million. (Board and care revenues are reimbursements to the state from insurance companies and the federal government for services at state hospitals. It makes sense to account for them outside the general fund, but doing so as part of a claim to hold down spending is misleading.)

Like Lynch, Hassan wants to raid dedicated funds to cover the anticipated deficit in the current fiscal year. We don’t yet know which funds or how much, because the details are in the unfinished HB 2.

Hassan has taken criticism from left and right for including $80 million in gambling revenue, even though her own budget doesn’t authorize gambling. Spending the money from such a speculative source is wishful thinking.

Hassan’s rose-colored glasses also envision a big increase in Medicaid enhancement tax revenue, even though the MET shortfall caused the current year’s deficit. Sen. Chuck Morse thinks Hassan’s estimates are $100 million too high, which would also mean $100 million less in federal matching funds. Perhaps Hassan is counting on hospitals to pay whatever the state says they owe, like they did under Mediscam.

Raid on the highway fund

Hassan is also asking the Legislature to raid the highway fund in violation of state law. After years of dipping into gas tax revenue for state agencies marginally related to transportation, the Legislature in 2008 imposed some discipline on itself. It mandated that an increasing percentage of the highway fund stay within the Department of Transportation, while a decreasing percentage could be diverted to Safety.

The highway fund diversion bill sailed through the Democratic House by voice vote and passed the Senate unanimously. Hassan voted to limit highway fund diversion in 2008. Now she wants to ignore it.

Her budget exceeds the current highway fund diversion cap by $28 million. She wants to use that money to hire more state troopers. And then she complains that transportation is underfunded and urges the Legislature to raise more taxes to pay for it.

We’d have $28 million more for roads and bridges, if the governor would simply obey a law that she supported.

Hassan claims that the GOP Legislature ignored the diversion cap last year, and she’s just continuing that practice. She’s wrong. The last budget did suspend the maximum amount going to Safety, but it upheld the minimum percentage staying at DOT.

Hassan is running the same old trick plays from the Lynch playbook. The Legislature would be wise to call an audible.

(Grant Bosse is editor of New Hampshire Watchdog, an independent news site dedicated to New Hampshire public policy.)

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