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Grant Bosse

Grant Bosse: Hassan’s budget complaints are overheated

Gov. Maggie Hassan had some harsh words for the budget approved by the Senate Finance Committee:

“While the Senate Finance Committee has begun to recognize in its revenue estimates New Hampshire’s strengthening economy and has made some progress on restoring priorities, they have unfortunately chosen the fiscally irresponsible approach of sweeping, across-the-board cuts instead of being forthright about the programs they would eliminate. These deep cuts to Health and Human Services and employees will cost hundreds of jobs and put at risk critical areas, including mental health care, funding the waitlist for people with developmental disabilities, the CHINS program, and the ability to deliver basic services.”

I’ll leave the first bit about revenue estimates aside. Hassan’s criticism centers on “sweeping, across-the-board cuts” to Health and Human Service programs that don’t exist. Hassan pillories a Senate budget that spends, in some cases dollar for dollar, exactly what she and House budget writers recommended.

My colleague Joshua-Elliott Traficante at the Josiah Bartlett Center finds that the governor’s budget, the House budget, and the budget up for debate by the full Senate this week have nearly identical priorities for the critical areas that Hassan claims are at risk.

All three budgets would spend $138,486,334 on developmental services in Fiscal Year 2014 and $148,758,998 in 2015, up from $127,905,281 this year. How’s that for bipartisan cooperation? The Senate Finance Committee cut and pasted Hassan’s budget proposal, a 15 percent increase in two-year general fund spending on developmental services. How’s that for bipartisan cooperation?

Hassan and the House budget set aside $127,688,005 for behavioral health, a 16.77 percent general fund increase over two years. The Senate plan includes $127,606,940, a 16.70 percent increase. Apparently, that 0.07 percent makes all the difference.

The major disparity between the House and Senate budgets is in uncompensated care. The governor and the House are counting on huge increase in the Medicaid Enhancement Tax, which the Senate, the New Hampshire Hospital Association, and Hassan’s own Medicaid director agree are unrealistic. With less revenue coming in, the Senate sends less money back to hospitals. This has nothing to do with the critical Health and Human Services programs Hassan cites.

So where does Hassan imagine these devastating cuts are hiding in a budget that mirrors her priorities? They’re in the “back of the budget.” Every New Hampshire budget in memory includes instructions to state agencies to return unspecified savings over the next two years. Hassan supported back-of-the-budget cuts as a state senator, and she included them in her budget earlier this year.

The Senate Finance Committee increased the back-of-the-budget instructions to Health and Human Services, and included $50 million in savings from personnel costs, at least $20 million of which need to come from the general fund. The impact on the health agency would be about $26 million, assuming it accounts for half of the personnel savings, since it employs about half of state workers. That’s about 2 percent of the two-year Health and Human Services general fund budget. Hassan and the House want to save 1 percent. Hassan describes that 1 percent difference as “the fiscally irresponsible approach of sweeping, across-the-board cuts.”

Health Commissioner Nick Toumpas says he can’t find $26 million, and that caseload estimates should be $14 million higher. If forced to save $40 million over the next two years, he told the Senate Finance Committee that he would be forced to cut aid to counties, the Children in Need of Services program, the developmentally disabled wait list, mental health programs and community health

centers. Don’t believe him.

We’ve come to expect government officials to threaten women and children first. Back-of-the-budget cuts do not put essential

services at risk. They are the Legislature’s way to force commissioners to define non-essential services. Gov. John Lynch loved them.

“Gov. Lynch asked the Legislature to force a $50 million cut into the back of the budget to improve his negotiating position with the SEA,” remembers Josiah Bartlett Center President Charlie Arlinghaus. “When the law requires a $50 million cut, choices are narrowed.”

Lynch and the union came to the bargaining table with two choices: layoffs or lower salaries and benefits. In 2010, Lynch went further, instructing agencies to find $140 million back-of-the-budget savings to make up for lagging revenue.

“As budget writers sit down for a committee of conference, they are already in agreement over most of the Health and Human Services budget,” Elliott-Traficante concludes. “Finding common ground on MET revenues will likely be their key challenge.”

They must also decide whether to expand Medicaid, and how much, if any, to cut state employee costs. House and Senate budget writers are actually very close with one month until the end of the fiscal year.

(Grant Bosse is editor of New Hampshire Watchdog, an independent news site dedicated to New Hampshire public policy. He is a senior fellow at the Josiah Bartlett Center for Public Policy.)

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