New Hampshire budget writers resolved some of their biggest differences Wednesday, dropping a paid family and medical leave program that would have triggered a veto but including business tax rates the governor opposes.
A committee of House and Senate lawmakers has until the end of the day Thursday to sign off on a proposal that will be voted on by the full Legislature next week. Members agreed Wednesday on a $138 million increase in education funding, which was less than the House originally proposed and more than what the Senate included in its budget. House negotiators gave up a capital gains tax extension they wanted, and agreed to the Senate’s plan to send $40 million in unrestricted money back to cities and towns instead of the $12.5 million they had included in their budget.
“I think we’ve really worked together well and have been able to produce a budget I hope we can all be proud of,” said Rep. Mary Jane Wallner, D-Concord, the committee’s chairwoman.
The paid family and medical leave program had been included in both the House and Senate budgets after Sununu vetoed a bill both chambers had passed. The proposal negotiators agreed upon Wednesday removes the policy provisions from the budget and leaves in $3.5 million that only would be spent if a similar bill becomes law.
“The policy debate will continue. There are different ideas out there, I think some are more reasonable than others, but in any event, this funds, in the budget, the start-up costs but leaves the policy debate for the future,” said Senate Democratic Leader Dan Feltes of Concord.
Sununu opposed the plan because it was mandatory and funded through a payroll tax deduction. He had proposed a voluntary program in conjunction with the state of Vermont.
“It was understood by the Legislature that continuing down the path of mandating an income tax on the people of New Hampshire for this program was not viable. It wasn’t the New Hampshire way of doing things,” Sununu told reporters. “I’m still hopeful that they’ll take up a good way to do it.”
On the business tax front, Democrats want to halt two years of scheduled cuts in the business profits tax and the business enterprise tax, a move they estimate will produce $90 million. Sununu said he would consider foregoing the second year of cuts but if the budget includes halting both, he will veto it.
“We have a $260 million surplus. How does the government go out and tell the people of New Hampshire that they have to pay more,” he said. “They will not accept tax increases nor should they, because we don’t need it.”
The $13 billion, two-year budget proposal also would spend $60 million to increase reimbursement rates for Medicaid providers. Sununu argued that rate increases should be targeted to the most inequitable areas instead of given across-the-board.