Two-year, $11 billion state budget clears Democratic-led House, heads to GOP-led Senate

Last modified: Thursday, April 04, 2013
The Democratic-controlled House passed a state budget yesterday that spends about $11 billion over the next two years, increasing taxes on tobacco and gasoline and boosting funding for community colleges and mental health services.

The budget now goes to the Republican-controlled Senate, which will craft its own plan over the next two months. That budget could look very different – for example, the Senate is looking to casino gambling, not tax increases, for revenue.

“The House budget looks to spend millions of dollars in revenues the Senate will not approve and the state should not expect,” said Sen. Chuck Morse, a Salem Republican and chairman of the Senate Finance Committee, in a statement.

The House passed its budget yesterday on a 194-172 vote, with all but five Democrats supporting it and every Republican opposed. A trailer bill making related changes in state law passed on a 193-166 vote, also largely along party lines.

“This budget is a modest restoration of some of the most devastating cuts of two years ago,” when the GOP controlled the Legislature, said Rep. Cindy Rosenwald, a Nashua Democrat and vice chairwoman of the House Finance Committee.

Rosenwald added, “It strengthens our safety net, supports higher education and invests in our communities. . . . We will be reversing the health and public safety crisis which has deepened in mental health over the past two years. . . . And this budget restores the Children in Need of Services programs. CHINS will again be there as an option for families, to help troubled adolescents become upstanding citizens rather than criminals.”

House Republicans complained the budget relies on unrealistic revenue estimates and grows government too much, while cutting some important programs like school building aid.

“The bottom line is, if you’re committed to job creation and expanding our economy, this budget is not one you should vote for,” said Rep. Bill O’Brien, a Mont Vernon Republican and the former speaker of the House. “Abandon the talking points, abandon the boogeyman philosophy that . . . distracts us from what the issues are and vote with the hard-working taxpayers and the small businesses of New Hampshire to reject this budget.”

In all, the House’s budget is similar to the two-year budget proposed Feb. 14 by Gov. Maggie Hassan, a Democrat. It trimmed about $57.7 million in general-fund spending over the biennium, and removed $80 million in proposed revenue from a single casino license.

(Hassan has endorsed a bill that would allow a single casino in the state. It passed the Senate, but the House hasn’t voted on it and has traditionally opposed proposals for expanded gambling.)

Hassan expressed unhappiness yesterday about some of the cuts made by the House.

“The House budget as it stands falls short of our balanced budget proposal in key areas that are critical for strengthening our economy and improving the health and well-being of our people,” she said in a statement.

Spending up

The budget assembled by the House Finance Committee and approved yesterday contains roughly $2.6 billion in general-fund spending and roughly $11 billion in total state spending over the next biennium, which begins July 1.

That’s a 9.3 percent increase in total spending from the current biennium, counting actual spending in fiscal 2012 and projected spending in fiscal 2013.

Representatives squabbled yesterday over the numbers – some Republicans said a spending increase of 16 percent is concealed using accounting gimmicks, while Democrats said the increase in general-fund spending is just 3 percent.

Hassan proposed big increases in funding for mental health services, the University System of New Hampshire, community colleges and services for adults with developmental disabilities.

The House trimmed some of those increases, offering $12 million less than Hassan had proposed for the university system and $33 million less in payments to hospitals for uncompensated care. The House also cut money Hassan had proposed for local school building aid and public charter schools.

The budget increases the gas tax by 12 cents, from 18 cents per gallon to 30 cents per gallon, over three years for gasoline and six years for diesel fuel. It also raises the per-pack tax on cigarettes by 30 cents, to $1.98 a pack. Fees for a marriage license and an individual saltwater fishing license each increase by $5.

And, as Hassan had proposed, the House budget delays the implementation of several pending changes in business tax laws that had been passed by the last Legislature.

Amendments rejected

Yesterday’s debate lasted five hours and featured few fireworks. Republicans proposed 16 amendments to the operating budget, and all 16 were defeated on roll call votes.

Some of the proposed amendments included:

∎ A one-year moratorium on new electrical transmission lines and wind turbines, proposed by Weare Republican Rep. Neal Kurk. The House Finance Committee rejected a similar moratorium last week, as did the Senate; yesterday’s amendment was rejected by the full House on a 229-126 vote.

∎ An amendment raising the tobacco tax by 20 cents a pack instead of 30 cents. The House previously passed legislation calling for the 20-cent hike, but yesterday’s amendment was rejected, 197-168.

∎ An amendment to protect a dozen or so specific state funds from being raided to fill an expected deficit for the current fiscal year. It was narrowly defeated, 186-185.

∎ A proposal to shift up to $7 million in long-term care costs from counties to the state. Hassan’s budget had proposed a larger downshift to counties, and the amendment was rejected, 195-171.

∎ A proposal to allow the pending changes in business tax laws to go into effect as planned starting later this year, instead of delaying them two years. It was rejected, 202-165.

Several of the proposals that would have increased state spending for specific programs moved money from the fund for uncompensated care payments to hospitals.

On to the Senate

The budget now goes to the Senate, where Republicans hold a 13-11 majority.

The six-member Senate Finance Committee is expected to start working on the budget next week. The full Senate must vote on the budget by June 6, and negotiators from the House and Senate will then hammer out a final compromise plan.

Morse, the budget-writing committee’s chairman, said the House’s budget is an improvement on Hassan’s proposed budget. But, he said, it overestimates revenues, especially from the state’s Medicaid Enhancement Tax, and increases state spending.

Morse also said he has “concerns with a number of policies included in the House budget, such as allowing the governor significant latitude to raid dedicated funds as well as the suspensions of the newly enacted school building aid program and job-fostering business tax reductions.”

Minority Leader Sylvia Larsen, a Concord Democrat, in a statement called the House budget “a plan that reflects many of Gov. Hassan’s responsible budget priorities.”

Larsen added, “As the Senate begins its budget process, Senate Democrats stand ready and willing to work with Senate Republicans to develop a fiscally responsible budget that meets the needs of the citizens and the businesses of our state.”

Both Hassan and Morse yesterday called on the House to pass the casino bill that passed the Senate last month, describing it as an important additional source of revenue.

Capital budget

The House yesterday also approved a two-year capital budget of $227.2 million, on a 285-68 vote.

The budget includes money for three new liquor stores and repairs to the State House’s dome. The single largest item is $38 million for a new women’s prison, replacing the aging and crowded facility in Goffstown. The new prison would likely be in Concord.

Rep. Steven Beaudoin, a Republican from Rochester, sought yesterday to remove that $38 million from the capital budget, offering an amendment that would instead study “alternatives to the construction of a new facility,” such as housing some prisoners in county jails.

“This would be an immediate solution to our overpopulation problem at the women’s state prison,” Beaudoin said.

But Nashua Rep. David Campbell, a Democrat and chairman of the House Public Works and Highways Committee, said Hassan and the Senate are both on board with a new prison.

Beaudoin’s amendment was rejected on a 253-98 vote.

(Ben Leubsdorf can be reached at 369-3307 or bleubsdorf@cmonitor.com or on Twitter @BenLeubsdorf.)