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Budget hearing breezes by in hour

Last modified: 6/9/2010 12:00:00 AM
Gone were the hordes of AIDS patients and cancer survivors. The state's judges were nowhere to be seen.

When Gov. John Lynch originally presented his plan to cut a budget shortfall now pegged at $295 million, the public hearing lasted seven hours. Yesterday, after a month and a half of debate, discussion, last-minute bill changes and intense lobbying, an informational session on the latest budget plan included just one hour of public testimony. State Sen. Lou D'Allesandro, a Manchester Democrat and Senate Finance Committee chairman, spent almost as much time reading a 10-page budget impact statement word for word as the public spent testifying.

The House and Senate will vote on the bill at a special session tomorrow.

Although nearly 150 people attended yesterday's hearing before the House and Senate Finance committees, most were other state lawmakers, along with a large number of lobbyists and some candidates for state office. There were only a few members of the public. Some lobbyists said afterward that legislators knew their views and the budget appeared to be a done deal. Others said they were satisfied with the outcome.

'Given where things are, I think this is probably the best that could be done under the circumstances,' said Douglas McNutt of AARP, an advocate for senior volunteer programs that were restored to the budget. 'Obviously, we'd like more funding for home- and community-based care. Everyone's rates are being cut. . . . But I don't know what other alternatives there are at this point.'

David Juvet of the Business and Industry Association said the association's major concerns were met - the bill does not include a capital gains tax or an increase in business taxes, and it includes the repeal of the extension of the interest and dividends tax to owners of limited liability companies, commonly referred to as the LLC tax. And though it freezes the insurance premium tax at its current rate, it does not raise the tax. BIA opposes the use of Regional Greenhouse Gas Initiative funds, but Juvet said the association already predicted that the general fund would raid it when RGGI was set up.

'We didn't see the necessity of (testifying),' Juvet said. 'The bill is what it is. It appears they have the support to pass it.'

The bill includes about $270 million in cuts, bonding and new revenue sources that were already discussed at length in a committee of conference during the regular session.

According to the Legislative Budget Assistant, the bill includes $50 million in agency spending reductions. An additional $44 million comes from dedicated funds and money left over at the end of the year in a variety of departments and accounts. The bill includes $187 million in one-time events - such as taking federal stimulus money, refinancing debt and bonding money for the university system. Just $3 million comes from increased taxes and fees.

The bill would require the state to take $5 million from the rainy day fund to fill the shortfall in fiscal year 2010, which ends this month. The state already took nearly $80 million from the rainy day fund to balance the 2009 budget, which left the fund with about $9 million. The money taken this year would be repaid the following year.

At the end of fiscal year 2011, the state would be left with a surplus of $11.6 million, according to figures from the legislative budget assistant.

Calling out cuts

Several last minute changes - which were added to fill the remaining shortfall - did come under fire yesterday.

The proposed bill would cut $1 million from the judicial branch. That is significantly less than the governor's original proposal, which would have cut $4 million from the judicial branch. But the House had proposed eliminating the cut altogether.

Howard Zibel, general counsel for the state court system, said the cut would mean fewer trials and longer waits for citizens.

'The judicial branch doesn't have any programs,' Zibel said. 'We just have justice to give to the people of New Hampshire. With these cuts, there will be less of it.'

Zibel pointed out that the Legislature already passed a bill requiring the courts to increase wages of court security officers, at a cost of $1.2 million. The Legislature added an additional $80,000 in court security costs by declining to close four courts - though the local communities will pay for the courts' overall operations. Zibel said the only place to cut is in judge time, jury trials and court security.

In response to the newest proposed cut, Chief Justice John Broderick yesterday ordered another three furlough days during which courts will be closed in October, November and December. The courts will have been closed for nine days since April. Broderick also asked Lynch not to fill nine full-time judicial vacancies. Broderick will meet with county sheriffs tomorrow to determine whether the courts will need to cut sessions because of a lack of funding for security. The court system announced earlier that courts will be closed to the public for a few hours each week so employees can process orders and reduce backlogs.

The proposed bill includes taking $3.1 million in RGGI funds. In response to concerns about diverting that money, state Rep. Marjorie Smith, a Durham Democrat and House Finance Committee chairwoman, said the state is still using millions of dollars in federal stimulus money for energy-efficiency projects, which is the goal of RGGI.

The $3.1 million would pay the general fund back for its administrative costs in implementing the fund, Smith said.

The bill also cuts $1.5 million in land conservation funds from the Land and Community Heritage Investment Program. According to LCHIP Executive Director Deborah Turcott Young, the $1.5 million represents all the money left in LCHIP's fund that is not already obligated to specific projects. That money was supposed to go to a new round of grants in July. If the grant round still goes forward, LCHIP will only have available any money it gets in June or later. LCHIP is funded by a fee for document recording at the county registers. LCHIP gets an average of $300,000 a month, but beginning in July, half of that money will go to the state's general fund instead.

Chris Wells of the Society for the Protection of New Hampshire Forests said that with the latest diversion, the Legislature will have taken a total of $4.5 million, or more than 60 percent, of all funds collected from the fee - which was supposed to be dedicated to LCHIP.

'This action . . . would render LCHIP essentially meaningless in terms of its ability to contribute to conservation in New Hampshire and likely require the program to lay off some or all of its small staff,' Wells warned. 'LCHIP would be kept alive in name only.'

Several cuts to Health and Human Services also drew criticism. Ellen Edgerly of Rochester, whose daughter suffered from a traumatic brain injury, urged lawmakers to take out a provision cutting $50,000 for services to those with brain injuries. She said there is already little funding to serve a growing population.

'Servicemen and women who suffered traumatic brain injury and post-traumatic stress disorder are now starting to return home in record numbers,' Edgerly said.

Jennifer Decker, who has cerebral palsy and works for Granite State Independent Living, asked the committee to reduce cuts to personal care services for the disabled. Already, she said, those with disabilities are being asked to figure out which services they could do without.

'In the short term, consumers are not getting the services they need to live independently,' Decker said. 'In the long term, people with disabilities may have to consider living in more institutionalized settings that cost more to the state.'

Jay Ward of the State Employees' Association asked lawmakers to keep in mind state workers - noting that the state workforce has already shrunk by 400 in the last year, and the current bill would require more layoffs.

'State employees have already given a lot. We're asking more of them in this bill,' Ward said.

Along party lines

In a straw poll on the budget bill, House Finance Committee members voted along party lines, with Democrats supporting it and Republicans opposing it. Legislative leaders expect a similar result when the full House and Senate vote today.

State Rep. David Hess of Hooksett, the deputy Republican leader, introduced a standalone bill to repeal the LLC tax.

'There's almost universal support for the repeal of the tax, but for some reason or other it got into the red zone but never crossed the finish line the last two months,' Hess said. The budget bill also includes the repeal, but a standalone bill could provide political cover to Republicans who support repealing the tax but will not vote for the budget bill.

Yesterday morning, a group of about 30 small-business owners, led by conservative activist Andrew Hemingway, urged lawmakers to repeal the LLC tax. Hemingway said the repeal had been attached to seven different bills, with bipartisan support, but never made it out of the Legislature.

'The administration in power held the tax over our heads and played political games with it, played with the welfare of business and the economy of our state,' Hemingway said.

The informational session was held by the House, not the Senate, so there was no discussion of an expanded gambling bill that will be introduced by D'Allesandro in the Senate.


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