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N.H. Senate revenue chairman cautiously optimistic

The chairman of New Hampshire’s Senate tax-writing committee said yesterday he is cautiously optimistic the economy is on a gradual upswing but not at a pace allowing the state to spend at pre-recession rates.

Ways and Means Chairman Bob Odell, a Lempster Republican, estimates growth for each of the next two fiscal years will be 2 percent. But he doesn’t buy the estimates from hospital taxes that Democratic Gov. Maggie Hassan and the House used to build their budgets. Odell said they are millions of dollars too high, which could create a problem for the Senate in writing its budget.

The current budget, written by Republicans, cut state hospital aid for all but a handful of critical access hospitals. Hassan’s proposal would restore about half of the $200 million cut in the last two years – but only if the hospital tax revenue comes in much higher than Odell believes are realistic.

If the estimate is too high, Senate budget writers will be faced with either not giving the hospitals state aid or with making cuts elsewhere. The state is in a difficult position since it needs the hospitals to agree to be part of its managed care network for Medicaid clients to implement the system, but the hospitals are balking at the state’s low reimbursement levels for Medicaid patients. Hassan and lawmakers hope restoring some of the hospital aid will encourage them to join the state’s network.

Odell’s committee is meeting May 14 to set the revenue estimates the Senate will use to write its version of the state budget for the next two years. The Senate votes on its budget June 6. The House and Senate then will try to negotiate a compromise before the new fiscal year begins July 1.

In projecting future revenue for the next budget, Odell said his committee will come up with a base amount that does not include money not likely to be repeated, such as from lawsuits. He said he estimates so far this year the state is $21 million above projections. His committee could decide the base amount the state can expect to get each of the next two years is $2.3 billion. Two percent growth would be only $44 million a year, he said.

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