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UPDATED: Legislature OKs $10.8b biennial budget

State House Bureau

June 26. 2013 5:54PM

CONCORD — With overwhelming support, the House and Senate Wednesday sent the state's proposed 2014-2015 biennial budget to Gov. Maggie Hassan, who is expected to sign it.

The $10.8 billion budget includes $2.8 million in state general fund money. The plan spends $800 million more than the current biennial budget.

"After the deep cuts and radical ideology of the last legislature, we came together, Democrats and Republicans, to develop a fiscally responsible bipartisan budget that puts New Hampshire back on track and helps set the foundation to build a more innovative economic future," Hassan said after the votes. "The large, bipartisan support for the priorities in this budget — caring for our most vulnerable, public safety, education and preserving our natural resources — demonstrates that our shared values as Granite Staters are far more significant than our differences."

While lawmakers found much to like in the budget, there were a few complaints, particularly Medicaid expansion; the lack of new revenues for highways and bridges; and across-the-board cuts in personnel, the Health and Human Services Department and the court system.

And budget writers admitted it is a budget that will require scrutiny with only a $44,000 projected surplus at the end of the second year.

"This budget is the Senate's budget, distinctly. There is no cigarette tax increase, no gas tax increase, not even an increase in marriage license and salt water fishing license fees," said Senate Finance Committee Chair Chuck Morse, R-Salem. "The reality is that this budget has to be managed. We'll be there to help but I don't think we'll be there to raise revenues."

While many called the budget a true compromise between the House and Senate and Republicans and Democrats, others said the latest spending plan was a continuation of the goals set last year under former House Speaker William O'Brien, R-Mont Vernon.

O'Brien said lawmakers could improve the plan by adding the projected $50 million surplus this fiscal year to the state's rainy day fund.

"Even with that possibility, it is a good budget," O'Brien said. Budget writers "extended the O'Brien budget for another term; and increased the O'Brien budget by the rate of inflation and it serves New Hampshire well."

But House Finance Committee Chair Mary Jane Wallner, D-Concord, who chaired the conference committee that arrived at last week's compromise plan, said the governor laid the foundation for the budget they were acting on that day.

"Like all compromises, there are things here for us to like and things here that will disappoint all of us," Wallner said. "There are relatively few changes to the budget the House sent over that restored many of the devastating reductions made in the biennium we are in now."

The biggest point of contention between the House and Senate was Medicaid expansion under the Affordable Care Act which would add about 58,000 people to the rolls of the state and federal health insurance program. The Senate wanted more time to study expansion, while Hassan and the House want expansion to begin Jan. 1.

A commission will study Medicaid expansion with an Oct. 15 deadline for recommendations. Hassan said she will ask the Executive Council to call lawmakers back into session to address the commission's recommendation if House and Senate leaders do not.

"This is a true compromise between the House and the Senate," said House Finance Committee Vice Chair Cindy Rosenwald, D-Nashua, said. "The Senate got what it wanted, it wanted some time to study expansion before acting and the House got want it wanted, a quick study committee moving to an opportunity to cover 35,000 state citizens without insurance."

The budget includes a $25 million reduction in personnel costs, but appropriates $17 million for new state employee labor contracts with a 6 percent raise over two years.

One of the four state employee unions has ratified the contract, but the largest, the State Employee Association, has rejected the agreement. Lawmakers did not change the budget to address labor negotiations.

The budget includes $100 million more for higher education, $28 million more for the mental health system, eliminates the developmentally disabled wait list for services and reinstates the school building aid program.

There is $3.4 million for four new charter schools. The UNIQUE scholarship program is reinstated as is another program helping nursing homes.

There is no 20-cent per pack tobacco tax increase the House wanted, but an automatic 10—cent increase begins this summer. And the budget does not include a 12-cent gasoline tax increase approved by the House.

The budget plan eliminates the tips tax and foregoes a $5 increase in the salt water fishing tax.

The budget includes $13.5 million in business tax credits passed last year that Hassan and the House wanted delayed two years.

The Senate passed HB 1 budget on a 24-0 vote and the House 337-18, while HB 2 passed the Senate on a 24-0 vote and the House on a 346-12 vote.

Both Democrats and Republicans praised the budget that passed Wednesday.

House Speaker Terie Norelli, D-Portsmouth, said "The budgets we approved today are both a product of compromise and a statement of restoring investments in our citizens, communities and state."

House Minority Leader Gene Chandler said the budget contained realistic revenue estimates and is fiscally responsible.

"This budget will keep our state government on a fiscally sustainable course by keeping spending levels in check," Chandler said. "Being able to produce a budget that helps fund important priorities while not including any tax or fee increase is a significant achievement."

Not everyone praised the budget however.

New Hampshire Fiscal Policy Institute Executive Director Jeff McLynch said the budget begins to reverse some of the damage done two years ago.

"Nevertheless, it also represents a missed opportunity. Budget negotiators could not agree on the suspension of costly and ineffective business tax breaks or on other changes in tax policy," McLynch said. "Had they done so, they would have been able to make greater strides in improving public services, like New Hampshire's transportation infrastructure, vital to everyone living, working or visiting here," he added.

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