Capital Beat: Amid state-budget squabbles, deficit looms for current fiscal year
All eyes are on the House this week as puts its stamp on the state budget, with about $11 billion in state spending proposed over the next two years.
Getting less attention is the question of just how the state plans to scrape together a balanced budget for the current fiscal year, which ends June 30.
As of the end of February, the state’s year-to-date revenue was $41.1 million below what had been expected. That is, if the fiscal year had ended Feb. 28 and state spending came in as budgeted, the state would have had a $41.1 million deficit.
Business-tax revenue has been lagging, but the big problem has been the state’s Medicaid enhancement tax, which was $34 million below plan as of the end of February.
Of course, that number will change. Spending could come in under budget, legal settlements could bring in one-time cash and ordinary revenue could pick up in the next few months. (March and April are big months for business-tax revenue.)
But whatever its size, there still will likely be a hole to fill this summer.
Gov. Maggie Hassan has a plan. The Democrat, as part of her proposed budget, asked the Legislature for broad authority to sweep dedicated funds to fill any deficit for fiscal 2013.
In other words, Hassan would be able to raid accounts that had been established for specific purposes – the Land and Community Heritage Investment Program, the Fish and Game Department and the like – for cash to balance the budget.
Jeffry Pattison, the legislative budget assistant, said last week the governor’s office has indicated it’s looking at the Renewable Energy Fund, since it contains about $15 million to $16 million and is expected to accrue an additional $10 million to $15 million by June. The fund was created in 2007 as part of the Renewable Portfolio Standard program, which is intended to encourage renewable-energy sources like wind and solar power.
House Republicans aren’t thrilled with Hassan’s plan. Weare Rep. Neal Kurk, the senior Republican on the House Finance Committee, blasted it repeatedly during the committee’s budget meetings last week.
“The Legislature has the power to spend money and by assigning it to the governor, I think we abrogate our authority and, frankly, our responsibility,” Kurk said at one point. “If there is to be a raid on dedicated funds, we should have the courage to state which fund and by what amount it is to be raised.
“Allowing the governor to do this,” he added, “is, I think, an abrogation of our responsibility and, frankly, an attempt on our part not to take responsibility for some of the damage that may be wreaked.”
Initially, the panel’s Democrats seemed willing to give
Hassan the authority with a mild modification, a requirement that she tell the Legislature’s bipartisan, bicameral Fiscal Committee what she did.
But during Wednesday’s late-night committee meeting, Rep. Dan Eaton brought in an amendment that would give the 10-member Fiscal Committee the power to approve – or reject – Hassan’s plans.
“I do think it’s a good and clean and fair compromise, particularly having sat on Fiscal for an extended period of time. . . . No one gets a blank check out of Fiscal, ever,” said Eaton, a Stoddard Democrat.
Kurk said the idea was an improvement, but “a relatively minor improvement.” It still, he and other Republicans said, didn’t specify what funds could be used, or set an amount.
Eaton said he would have set a number, “but I am not Carnac, and Johnny Carson is dead.”
The Republicans on the committee voted against the proposal, which passed on a 13-9 party-line vote. A subsequent attempt to strip out the language was rejected, 13-9, also along party lines.
It’s part of House Bill 2, so it’ll go to the House floor with the rest of the budget Wednesday.
Revenue numbers for the year will firm up in the next few months, so a more elegant plan could be crafted by the Senate or during budget negotiations in June.
Still, the focus this week will be on the next state budget as the two-year plan heads to a vote in the Houses.
The plan endorsed by the Democratic majority on the Finance Committee last week trimmed $57.7 million in general-fund spending from Hassan’s two-year budget, and includes no revenue from a casino license. It was opposed by the panel’s Republican minority.
The committee will brief representatives tomorrow in Representatives Hall, starting at 1 p.m.
The full House will meet Wednesday at 10 a.m., and continue its session Thursday if necessary to finish the debate and vote on House Bills 1 and 2.
It’ll then go to the GOP-led Senate, which has until June 6 to work on its version of the budget. Then, barring an unexpected agreement between the two chambers, the final negotiations will begin.
There’s considerably less rancor surrounding the third piece of legislation that will go to the House floor on Wednesday: House Bill 25, the state’s two-year capital budget.
It includes money for a new women’s prison, three new liquor stores and other big-ticket projects.
The House Public Works and Highways Committee endorsed it last week on a final vote of 19-0.
That unanimity isn’t unusual – the last time the capital budget bill came to the House floor with a less-than-unanimous committee recommendation was in 2003.
Here’s the good news: The state is trying to ensure this doesn’t happen again.
After years of patching holes in the roof at the Rockingham County Superior Court, the state recently accepted that the 17-year-old roof needed replacing.
The price? $551,250.
The problem? The warranty on the roof expired two years ago.
That brought Mike Connor, director of plant and property management at the state Department of Administrative Services, to the Public Works and Highways Committee last week to seek $800,000 from the capital budget for a statewide analysis of the condition and warranty status of the state’s buildings.
Minority Leader Gene Chandler, a Bartlett Republican, opposed the request. Despite the missed warranty date, Chandler said Connor’s department does a good job keeping the Legislature up to speed on the state’s buildings.
In the end, the committee gave Connor $400,000 – enough, he said, to do three or four buildings.
Ayotte still a ‘no’
As the Supreme Court deliberates two cases dealing with same-sex marriage, there’s been something of a wave of U.S. senators announcing they now support it, including Republican Sen. Rob Portman of Ohio.
Don’t count U.S. Sen. Kelly Ayotte among them. The New Hampshire Republican confirmed last week she still opposes same-sex marriage.
“I respect those who have changed their minds, but I believe in traditional marriage,” she told WMUR.
Ray Buckley, chairman of the New Hampshire Democratic Party, took her and other GOP state officials to task in a news release.
“Unfortunately New Hampshire Republicans have lurched so far to the right they are out of touch not just with the majority of Americans, but even with members of their own party nationally,” Buckley said.
The State Employees’ Association’s current contract with the state government expires June 30, and negotiations are under way for a new deal.
Also participating in the talks are three other unions that represent state workers: the New Hampshire Troopers Association, the New England Police Benevolent Association and the Teamsters.
Jim Nall, chairman of the SEA’s master bargaining team, sent an update to members last week, calling the state’s initial proposal “disappointing” and complaining that “the process has not always gone smoothly and one could reasonably say the state’s team has not always been respectful of our proposals.”
He gave no details.
“All four of the teams are speaking with one voice, saying that state employees and their families cannot continue to bear the weight of further freezes and stagnant wages,” Nall wrote.
Matt Newland, the state’s manager of employee relations, isn’t giving out too many details, either.
“We are bargaining in good faith. Contract negotiations are a process,” Newland said in a statement. “We hope to reach contracts with the unions that recognize the importance of state employees and the restraints of the state budget as well.”
(Still) supporting gambling
Eleven House members, both Republicans and Democrats, met the press last week to announce they were “new faces” in the fight to expand gambling in New Hampshire.
New? Well, not exactly.
Six of the 11 have enthusiastically voted for gambling bills before: Rep. Al Baldasaro, a Londonderry Republican; Rep. Ed Butler, a Democrat from Hart’s Location; Rep. Dennis Fields, a Sanbornton Republican; Rep. Jeff Goley, a Manchester Democrat; Rep. Patrick Long, another Manchester Democrat; and Rep. Frank Sapareto, a Derry Republican.
The other five are truly new and are serving their first terms: Rep. Pam Brown, a Nashua Democrat; Rep. William Baber, a Dover Democrat; Rep. William Friel, an Atkinson Republican; Rep. Thomas Schamberg, a Wilmot Democrat; and Rep. Kermit Williams, a Wilton Democrat.
So, does that mean they’re all “yes” votes on the Senate bill headed their way that calls for one casino?
Again, not exactly.
Sapareto and Goley said they hadn’t read the bill. Baldasaro isn’t keen on just one casino. Williams wants a convention center attached to a casino. Butler wants the North Country to have a shot at a casino.
Brown is a definite yes.
“I think it’s prudent to start with one” casino, she said. “I support (the bill) as it is.”
They said they agree on this: The state needs more revenue, and expanding gambling is the best bet for getting it.
News of note
∎ New Hampshire gets a B- grade in terms of making state-government spending data available online, according to a report from the U.S. PIRG Education Fund.
∎ In terms of economic and personal freedom, the Granite State ranks fourth in the nation, according to the Mercatus Center at George Mason University. The ranking is based on data through the end of 2010; a year earlier, New Hampshire was ranked second.
∎ The Business and Industry Association will hold a “Croissants and Crossover” breakfast Thursday at the Holiday Inn in Concord. Tickets are $25 for members and $40 for others.
Full disclosure: I’ll be on the event’s panel, along with Kevin Landrigan of The Telegraph, Norma Love of the Associated Press and Garry Rayno of the New Hampshire Union Leader.
(Annmarie Timmins contributed to this column. Ben Leubsdorf can be reached at 369-3307 or email@example.com or on Twitter @BenLeubsdorf.)