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Compromise N.H. budget wins almost unanimous support in Legislature

A nearly unanimous Legislature yesterday approved a bipartisan, $10.7 billion state budget for the next two years that contains no tax or fee hikes, delays a decision on whether to expand the Medicaid program and increases funding for mental health services, community colleges and public universities.

Gov. Maggie Hassan, a Democrat, said she’ll sign the budget passed by the Democratic-controlled House and Republican-controlled Senate.

“The large, bipartisan support for the priorities in this budget – caring for our most vulnerable, public safety, education and preserving our natural resources – demonstrates that our shared values as Granite Staters are far more significant than our differences,” Hassan, said in in a statement.

The House and Senate had passed different versions of the state budget, on votes that fell largely along party lines. But a deal was struck a week ago by budget negotiators from the two chambers, and the compromise budget sailed through the Legislature yesterday with little opposition.

House Bill 1, the operating budget, passed on a 24-0 vote in the Senate and a 337-18 vote in the House. The trailer bill making related changes to state laws, House Bill 2, passed the Senate on a 24-0 vote and the House on a 346-12 vote.

Most of the “no” votes came from Republicans. Three Democrats voted against HB 1 and four Democrats voted against HB 2.

The current biennium ends Sunday, and the new budget will take effect Monday.

Spending and revenue

On Feb. 14, Hassan presented a budget proposal to the Legislature that beefed up state services for the mentally ill, funded services for adults with developmental disabilities and increased state aid to the University System of New Hampshire and the Community College System of New Hampshire.

More than four months later, the final budget still provides funding increases in those areas compared with the austere budget passed by the then-GOP-dominated Legislature two years ago.

But many of the details are different. For example, there’s less money for public universities than Hassan had proposed, $80 million in revenue from a casino license has disappeared (the related casino bill died in the House) and a proposed increase in the cigarette tax has been shelved (though a 10-cent increase in the tobacco tax, to $1.78 per pack, will still go into effect automatically in August).

In all, the state budget spends about $10.7 billion over the next two years including $2.7 billion from the general fund, which relies on state taxes and fees. The last state budget, passed in 2011, spent $10.2 billion.

The budget for the next biennium contains several nonspecific across-the-board cuts to departments known as “back of the budget” cuts.

The Senate had proposed a $50 million cut to personnel costs over the next two
years, including $20 million from the general fund. That was reduced in the final budget to a $25 million cut with
$10 million coming from the general fund, plus a $10 million lapse that will require Hassan to find savings across state agencies.

The budget also makes a $7 million cut to the Department of Health and Human Services, a $10 million cut to the Judicial Branch, a $2 million cut to the Legislative Branch, $1.25 million cuts to the Sununu Youth Services Center and the Department of Revenue Administration and a $500,000 cut to the New Hampshire Veterans Home.

Several changes in business-tax laws passed by the last Legislature will go into effect as planned, and the DRA will add additional auditor positions to bring in more tax revenue.

The budget also fully funds the Land and Community Heritage Investment Program and includes money for four new public charter schools. Some state programs, such as school building aid, will remain frozen for lack of funding.

The last major piece of the budget to come together in last week’s negotiations was
Medicaid expansion. Hassan and the House Democrats wanted to expand the program and add an estimated 58,000 low-income residents using federal money under the 2010 federal health care reform
law, but the Senate Republicans wanted to study the option further.

Lawmakers agreed to delay a decision for now, as the Senate wished. A special study commission will get to work next month and issue a final report by Oct. 15. Hassan and other expansion advocates say they expect a special session of the Legislature will then vote on the issue.

Claiming credit

House Speaker Terie Norelli, a Portsmouth Democrat, in a statement called the budget “both a product of compromise and a statement of restoring investments in our citizens, communities and state.”

But Sen. Chuck Morse, a Salem Republican and chairman of the Senate Finance Committee, was quick yesterday to point out the final budget closely resembles the budget passed June 6 by Senate Republicans over opposition from Democrats and criticism from Hassan.

“Though some were quick to criticize our work for political purposes, I am pleased that, given a couple of weeks and more careful study, they came to largely agree that ours was a thoughtful, balanced proposal that meets our state’s needs within existing means,” Morse said. “We welcome their newfound support.”

A number of Democrats yesterday said they were willing to support the compromise budget even though they think it falls short in some areas.

Sen. David Pierce, an
Etna Democrat, said he was disappointed the budget doesn’t address funding for transportation infrastructure, contains the back-of-the-budget cuts and doesn’t expand Medicaid.

But, he said, the perfect shouldn’t be the enemy of the good, and the state will be better off because of the budget.

“More people will be able to afford college. More families struggling with mental illness or developmental disabilities will get the help they need, and they’ll get it soon. We will once again have resources to help families with troubled children,” Pierce said. “These are goals that our governor set for us . . . and we’re going to deliver on them. These steps are real, they’re meaningful
and they’re coming about because we’re compromising between different ideologies and parties.”

(Ben Leubsdorf can be reached at 369-3307 or or on Twitter @BenLeubsdorf.)

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