In ‘Pledge 2.0,’ Havenstein commits to controlling spending

Last modified: 9/24/2014 12:15:12 AM
Granite State politicians have long pledged to oppose sales, income and other “broad-based” taxes. Republican gubernatorial candidate Walt Havenstein now says that’s not enough, and he vowed yesterday to oppose any “unfunded obligations” that could lead to future taxes – something that, he said, Gov. Maggie Hassan has failed to do.

“My commitment to the people of the state of New Hampshire is to make sure I don’t put anything in place in terms of policy that will obligate the state’s taxpayers to future spending obligations,” Havenstein said, summing up what his campaign has dubbed “Pledge 2.0.”

Havenstein, flanked by about 17 other Republicans at a press conference yesterday morning, did not offer specific examples of cuts he would make to reverse the spending trends he warned against. Pressed for details, Havenstein said such cuts would depend on where the state’s spending figures stand and said it’s difficult to project that based on the information the state has made available at this time. As outlined in an economic plan he put forward earlier in the campaign, Havenstein said he would aim to cut spending by about 2.5 percent – but that would “depend upon how fast we can grow our economy.”

Havenstein has repeatedly characterized Hassan’s economic track record as problematic. At the press conference, Havenstein pointed to two instances in which he believes Hassan fell short of the ideals of his new pledge: her budget proposal last year that relied on revenue from a casino that hadn’t yet been legalized, and her support for a publicly funded Medicaid expansion plan. While neither of those panned out – the budget was reworked after the casino proposal failed, and the state’s Medicaid expansion is using federal Medicaid money to fund private health insurance for qualifying adults through the end of 2016 – Havenstein said the intent behind her original positions is what matters.

When Havenstein was asked for specific examples of problematic spending policies that went into effect, Sen. President Chuck Morse jumped in to criticize Hassan’s handling of two lawsuits against the state regarding the Medicaid Enhancement Tax and mental health reform.

“These things are adding to future taxation that are going to drive us to an income tax,” Morse said, adding that the governor did not adequately involve the Legislature before accepting the settlements. “I think it’s extremely important that Walt pledges he’s not going to head in that direction.”

In both cases, the Legislature needed to approve bills tied to the settlements before they took effect. Morse raised similar concerns when the legislation related to the mental health settlement was discussed in the Senate Finance Committee.

Havenstein, for his part, later said he was not familiar with the specifics of those lawsuits and would not have necessarily opposed the settlements. Still, he felt Morse’s concerns relative to the Legislature’s role in reaching those settlements were valid.

policy experts weigh in

Hassan’s campaign spokesman Aaron Jacobs disputed allegations that the governor was not being transparent on the state’s finances. In an emailed statement, Jacobs said spending is routinely reported on the state’s TransparentNH website, and that “closing the books” is a “multistep process.”

“Agencies need to pay final bills for the fiscal year, some of which may not have been received, and go through hundreds of line items,” Jacobs said. “But as Governor Hassan let the Legislature know in May, agencies have worked hard to meet their lapses and to meet the priorities established in our bipartisan budget. As has been tradition, and is the law, that information will be delivered to the Fiscal Committee once we finish preparing the unaudited financial statements.”

And while Morse and Senate Majority Leader Jeb Bradley joined Havenstein in hammering Hassan’s spending history, Sens. Sylvia Larsen and Lou D’Allesandro defended her leadership on the budget and on the state’s legal settlements in statements issued after the press conference. Larsen and D’Allesandro, both Democrats, are members of the Senate Finance Committee alongside Morse. Jacobs, in a separate statement, said Havenstein’s unfamiliarity with the settlements that came up during the conference and his responses otherwise illustrated a lack of understanding about New Hampshire’s government and budgetary process.

New Hampshire Democratic Party Chairman Raymond Buckley, who was on hand for Havenstein’s press conference, said the new pledge amounts to little more than “puffery 2.0” – a nod to a comment Havenstein made earlier this year referencing the use of tax pledges as empty political promises.

“There’s no substance to this in any way, and there’s no substance to his candidacy,” Buckley said of Pledge 2.0. “There was no specifics, there was nothing offered. . . . He simply doesn’t understand how government works, how the state budget is written or how the process is.”

New Hampshire Fiscal Policy Institute Executive Director Jeff McLynch, commenting on Havenstein’s proposal, cautioned against focusing on spending without also examining revenue.

“If one’s concerned about the impact of changes in law on future budgets,” McLynch said, “one should be every bit as worried about proposals to reduce taxes that fail to specify how New Hampshire could afford those tax cuts.”

No matter the outcome of November’s election, Steve Norton of the New Hampshire Center for Public Policy Studies said the task of addressing about $100 million in new expenses will be a significant challenge for whoever is in charge. Even with $100 million in new expenses that were not included in the budget, however, Norton said the state’s financial outlook is “not unusual” considering that we’re just several years out of a recession.

“It’s pretty consistent with the type of problems we’ve had in the past,” said Norton, who directs the nonpartisan policy center. “But it can’t be pushed aside without some serious plans.”

In Havenstein’s case, Norton said that will likely require figuring out how he would balance his commitment to control spending while keeping up with future obligations that come before the state.

“He knows, he’s a businessman, that things are going to come up and he’s going to have to make trade-offs,” Norton said of Havenstein’s new pledge. “What are those going to be?”

(Casey McDermott can be reached at 369-3306 or or on Twitter @caseymcdermott.)

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