Compromise Seems Far Off in State Budget Impasse

Jun 18, 2015

Governor Maggie Hassan’s promise to veto the state budget unless Republican leaders remove or offset proposed business tax cuts is drawing support from Democrats and galvanizing GOP opposition.  It also suggests the budget impasse may not be resolved for months.

Gov. Hassan’s first clear statement concerning a veto of the budget was delivered Thursday night, when the State House was quiet. Hassan issued a statement calling the plan crafted by GOP negotiators dishonest and out of balance, and said she’d veto it absent changes. This morning, flanked by House and Senate Democrats, Hassan zeroed in on her biggest objection.

Infographic: What the Budget Compromise Looks Like

"They are pushing through corporate tax cuts that will blow a significant hole in this budget, and budgets well into the future, and only 1 percent of corporations, many of which are large out of state corporations, would receive more than 75 percent of the benefits," Hassan said.

Cutting business taxes is a, if not the, top priority for Republicans this year. And they also say, at this point, Hassan is mistaken if she expects them to meet her demands.

"We were not elected to represent the governor," said House Speaker Shawn Jasper. "I am here to work with my Republican caucus, and they have sent a very clear message to me."

And Jasper needs to listen. Recall that he won his job largely because Democrats voted for him. Most of his caucus wanted the more conservative Bill O’Brien to be speaker. And Jasper says the House has already compromised plenty. The committee of conference budget spends about $150 million more than the House had originally approved.

Senate President Chuck Morse, meanwhile, said as far as he’s concerned this budget does what it needs to. He says it increases overall spending by $500 million, and that business tax cuts in the next biennium are expected to cost the state $21 million in revenue.

"I think it’s been responsible all the way along, and I think what the Senate strongly believes in this process is we need to do one thing to get the economy rolling in the state if New Hampshire, and (business tax cuts) are one way to do that," he said.

Assuming no surprise deal emerges, the next step would be a short-term spending plan, known as a continuing resolution. To ensure government operations continue it would need to be in place July 1.  The state last operated under resolution in 2003, when then-Governor Craig Benson vetoed a GOP budget over concerns it spent too much money. The budget Benson ended up signing three months later increased spending.  Speaker Jasper says he’d like to see a resolution of at least three months to give lawmakers a clearer picture on future revenue. A long-term resolution might also increase the political pressure on Gov. Hassan. But she says however long a resolution lasts her focus will be the same.

"I will be working every day for as long as it takes to get a fiscally responsible responsible, balanced budget," said Hassan.

Morse said he’ll also work hard, to make sure if no surprise deal is reached on a full budget, a quick deal can be struck on a resolution to keep government running.  But in the meantime, Morse says the ball is in the governor’s court.

"I think in all honesty to threaten veto at this point, with all the hard work that’s gone into it, is being short sighted," he said. "I think the governor should take a good look at the budget and see what was accomplished."

So far that scenario seems far-fetched.

House and Senate will vote on the budget deal next week.