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Social service advocates looking for $7 milllion of surplus to go to HHS

State House Bureau

January 16. 2014 8:54PM

CONCORD — Social service advocates Thursday supported a bill to allocate $7 million of the state’s $15.3 million surplus for Department of Health and Human Services programs.

Sponsored by the House’s chief budget writers, Finance Committee Chairwoman Mary Jane Wallner, D-Concord, and Ways and Means Committee Chairwoman Susan Almy, D-Lebanon, House Bill 1411 would restore an across-the-board $7 million reduction for the agency included in the current biennial budget.

Almy told the House Finance Committee that restoring the funding would save money by avoiding costly lawsuits and would also reduce downshifting costs to counties and communities.

“If we don’t reduce DHHS’ obligation to make additional cuts, in six months, there will be further reductions in programs that our citizens and communities rely on,” Almy said.

The remainder of the $15.3 million surplus from fiscal year 2013, or $8.3 million, would go into the Rainy Day Fund, which contains far less money than bond rating agencies recommend to retain the state’s AA designation.

Committee member Rep. Neal Kurk, R-Weare, noted the Rainy Day Fund contains $9.3 million and questioned if that is adequate to retain the state’s bond rating and provide a cushion if revenues do not meet expectations.

Almy said that adding the entire surplus would not bring the fund to levels the rating agencies would like. The state’s revenue structure makes that impossible as it does not adequately fund essential services, she said.

State Treasurer Catherine Provencher recently told the Finance Committee Moody’s sets a bar of between 5 and 10 percent of operating revenues for appropriate reserves, which would start at $140 million.

Adding the entire surplus would bring the total in the Rainy Day Fund to $24.6 million, which is 1.8 percent of general fund revenue.

The Rainy Day Fund was not the issue for social service advocates who said the money is better spent preventing program and services cuts that will result from the across-the-board reduction.

Services were drastically reduced under the state’s 2012-2013 fiscal years budget and are not fully restored in the current budget, they said.

“Continued cuts to the DHHS budget year after year are taking its toll on the children of New Hampshire,” said MaryLou Beaver, director of Every Child Matters. “New Hampshire’s children are the poorest people in our state and the younger they are, the worse off they are.”

She noted the number of children in poverty has grown to nearly 41,000 in 2012, or 15.6 percent of all children, from 8.3 percent in 2007 before the great depression.

“For many years New Hampshire led New England and the region with the lowest percentage of children living in poverty,” Beaver said. “In 2012, 10 states reported lower child poverty for all children through age 18. Of the six New England states, only Maine and Rhode Island showed higher percentages.”Steve Mosher, chief financial officer for the department said the department began the current biennium with a $36 million, general-fund revenue shortfall.

He said the department has few options but one is a hiring freeze on all non-direct care positions, and another is changing Medicaid provider rates, benefits or eligibility, which requires legislative action and changing the contracts of the managed care organizations hired to administer the program. He said other programs reductions may be needed, but they have not been identified.

The committee has until March 20 to decide on the bill. The House has to act on the bill by March 27.

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