Senate budget plan cuts taxes, adds money for mental health beds, drug abuse

The Senate will begin consideration of an $11.8 billion state spending plan Wednesday that cuts business taxes, expands the number of mental health treatment beds and boosts funding for domestic violence shelters.

Republicans tout the plan as fiscally sound and say it fulfills the state’s needs. Senate Democrats, however, have argued it doesn’t go far enough to address addiction treatment, higher education costs or workforce development. Reflecting that division, the plan passed the Senate Finance Committee in a 4-2 vote along party lines.

Since Republicans control the Senate chamber 14-9, the budget blueprint is likely to pass. However, members are expected to offer dozens of amendments from the floor.

Here is what the proposal includes:

The state’s juvenile detention center would be partially converted into substance abuse treatment for minors. Roughly $2 million to retrofit the Sununu Youth Services Center in Manchester would come out of the so-called “alcohol fund,” which pays for treatment, recovery and prevention services. The budget doubles the percentage of state alcohol profits going into the fund, but would let the Health and Human Services commissioner tap the money to operate the Sununu Center. There is no cap on how much the commissioner could take, meaning most of the fund could be diverted to the center. The fund is controlled by the Governor’s Commission on Alcohol and Drug Abuse Prevention, Treatment, and Recovery. While the fund used to receive 5 percent of liquor profits, the formula was slashed to 1.7 percent in the last budget.

A new scholarship program would give eligible students up to $5,000 toward costs for college or a trade school, but the state university system wouldn’t see any increases. Like Gov. Chris Sununu’s budget plan, the Senate plan would not give the University System of New Hampshire more than the $81 million a year it currently receives. The community college system would get an additional $7.3 million over the two-year budget.

The scholarship program would be administered by the governor’s office, not the Department of Education, and it would get $5 million a year to hand out. Students need to meet certain criteria that include completing at least three years of high school in the state and plans to use the scholarship at a school in New Hampshire.

School districts would still see a drop in stabilization grants, but charter schools would get a bump. Under the Senate plan, charter schools would get an additional $250 per pupil in 2018 and another $125 in 2019. The moratorium on school building aid would remain in effect, but the plan launches a new Public School Infrastructure Revitalization Trust Fund overseen by the governor’s office, not the state Department of Education. The fund would be used for projects at public schools that could include improving internet access, as well as addressing security and structural deficiencies that pose an immediate safety hazard.

Funding for full-day kindergarten is not included in the state budget, but it is making its way through the Legislature as a stand-alone bill. In its current form, which recently passed the House Finance Committee, full-day kindergarten would be funded by allowing keno, an electronic lottery game.

Business tax rates would continue to decline under the Senate-approved budget. The business profits and enterprise tax rates would drop in 2020, resulting in an estimated loss of $81 million in revenue the next year, according to projections. Another reduction would take effect in 2022. Business taxes are big moneymakers for New Hampshire, and this fiscal year they are expected to bring in $565 million, roughly one-quarter of state-raised dollars. The reductions would follow cuts made in the current budget.

The business profits tax, levied on organizations with more than $50,000 in gross receipts, currently stands at 8.2 percent. The business enterprise tax, assessed on wages, interest and dividends, is 0.72 percent. The budget would lower the rates to 7.5 and 0.5 percent, respectively, beginning in 2020. Republicans say the tax cuts will drive growth, while Democrats have argued the state should be focused on workforce development.

The budget would spend $19.9 million on an expansion of mental health treatment beds and requires the DHHS commissioner to come up with a plan to move 24 children out of the state psychiatric hospital. The proposal comes at a time when patients are often forced to wait days or weeks for a bed to open at New Hampshire Hospital in Concord.

The budget lets the state establish contracts with private hospitals and nonprofits to set up 68 new beds that will range in care from patients who are committed involuntarily in psychiatric crisis to patients who are transitioning back into the community. The budget also funds another mobile crisis team, meant to treat patients in their homes and keep them out of the hospital.

A new office of the child advocate would be set up to provide independent oversight for child protection. But the budget wouldn’t fund voluntary services or help at-risk families get parenting classes, counseling or addiction treatment.

State police would get 10 new troopers over the two-year biennium, at a cost of roughly $2 million. The Senate budget would provide 58 positions at the Department of Corrections to staff the new women’s prison, which falls short of what the department had sought. The prison’s opening date depends on how quickly the department can hire enough employees to fill the jobs.

Concord School District would get $2.5 million in the budget to help ease the costs of transitioning to a new heat source in the wake of Concord Steam’s closure. The school district recently approved a $9 million project to convert Concord High School, Rundlett Middle School, Christa McAuliffe School and Abbot-Downing School to natural-gas heat in preparation for the loss of the city’s lone steam producer. The budget also allocates $18 million to replace heating systems at the State House complex.

Health care costs would rise for many state retirees, and those between the ages of 65 and 68 would face a new premium estimated at $40 a month.

The proposal is an attempt to cover the retiree health care plan’s soaring costs, which are driven by an increasing number of retirees and rising pharmaceutical prices. Retirees under age 65 would see their premiums rise from 17.5 percent to at least 20 percent. Those older than 65 but born after 1948 would face a new 10 percent premium.

In the past, the roughly 9,000 state retirees older than 65 haven’t paid premium contributions for the plan, which is a supplement to Medicare. The Senate plan scales back Republican Gov. Chris Sununu’s budget proposal, which had called for all retirees older than 65 to pay a new premium.

The budget would break up the Department of Resources and Economic Development. The Department of Cultural Resources would be combined with the divisions for forestry and lands into a new Department of Natural and Cultural Resources. It creates a new Department of Business and Economic Affairs.