HHS seeks to restore $7 million; Republicans want money added to rainy day fund
Advocates for a number of public assistance programs, specifically those supporting children, asked the House Finance Committee yesterday to restore $7 million in back-of-the-budget cuts to the Department of Health and Human Services by tapping into a $15 million surplus.
A bill sponsored by Democratic Reps. Mary Jane Wallner of Concord, chairwoman of the finance committee, and Susan Almy of Lebanon would take that $7 million from fiscal year 2012-2013’s $15.3 million surplus and put the rest of that surplus toward the rainy day fund.
But Republicans are challenging the bill, saying all of the surplus money should go into the rainy day fund, which is far below desired levels. The committee will hold a work session on the bill Thursday.
The $7 million cut – $3.5 million each for fiscal years 2014 and 2015 – came at the end of the budget process last year, after the department’s line item budget was already in place.
If the money isn’t restored, advocates said, programs such as Financial Assistance to Needy Families or Meals on Wheels wouldn’t be able to serve everyone in need. Some of the $7 million could also restore funding for Children in Need of Services. Paying for these services now could prevent lawsuits down the road, Almy said, pointing to the settlement the state owes over inadequate mental health services.
“New Hampshire loses in too many ways if the cuts go forward,” Almy said.
MaryLou Beaver, director of Every Child Matters, highlighted New Hampshire’s growing child poverty rate, up to 15.6 percent last year from 11.7 in 2011. Many programs run through health and human services are a vital to this group of children’s health and well-being, she said.
“Every child, regardless of their family’s economic situation, needs a safety net,” Beaver said. “New Hampshire’s safety net for children has holes in it and is becoming shredded.”
HHS started the biennium with a roughly $36 million shortfall, or $17 million per year, said Steve Mosher, the department’s chief financial officer. Administrators narrowed the gap by $10 million in part by keeping more than 200 positions vacant and making cuts to administrative accounts.
The $7 million from the surplus would not go to additional spending but would instead help the department meet its original projections crafted in last year’s budget. About 80 percent of HHS’s budget is spent on entitlement programs, with Medicaid being the most costly, Mosher said.
Aside from holding more positions vacant, the department has two options for making up the shortfall: reducing entitlement programs, which would require legislative relief, or reducing the department’s $23 million lapse, meant to cover unexpected costs of programs such as Medicaid and Financial Assistance to Needy Families.
“We don’t know what those bills are going to be,” he said. “We do our best but we can’t estimate exact dollars.”
But Rep. Neal Kurk, a Weare Republican, said giving back the $7 million is akin to reopening the budget, which sets a bad precedent. If HHS gets the money it needs, other departments could ask for surplus money as well.
“We’ve already done our budget,” Kurk said after the hearing.
He and Republicans on the whole do not support the bill and instead want to see all of surplus money go to the rainy day fund, which has $9 million in it now. In a presentation to the Senate Finance Committee earlier this week, state Treasurer Catherine Provencher said the fund balance should be at least $70 million.
In December, the New Hampshire Republican Party, conservative group Americans for Prosperity and state Sen. Jeanie Forrester, chairwoman of the Senate Finance Committee, called for the entire $15 million surplus to go to the rainy day fund.
“We must resist the temptation to spend every extra dollar. We should stick to the bipartisan budget already put in place, and dedicate $15 million to begin to rebuild New Hampshire’s rainy day fund,” Forrester said in a December statement.
Sending all of the money to the rainy day fund would need to be done legislatively, either as a separate bill or as an amendment to the bill presented yesterday morning. If the Legislature does not act, the $15.3 million surplus will go to the budget for the next biennium, starting in June 2015.
The Senate Finance Committee heard testimony Tuesday on its own bill that would use part of the surplus to restore HHS funding and send the rest to the rainy day fund. Sen. Andrew Hosmer of Laconia is the only Senate Democrat who is not sponsoring the bill.
(Kathleen Ronayne can be reached at 369-3390 or firstname.lastname@example.org or on Twitter @kronayne.)