House Finance Chair: Balancing The Budget Will Require Tough Choices

Jan 8, 2015

Credit NHPR Staff

The new legislative session kicked off Wednesday, and by all accounts, the most pressing issue for lawmakers will be crafting a new, two year state budget.

The state is looking at potentially more than $100 million in new costs, and that’s before taking into account a possible multi-million dollar deficit in the current budget.

Republican Neal Kurk of Weare is the chairman of the House Finance Committee joined Morning Edition to talk about the task ahead for lawmakers.

So you’re a veteran of the finance committee. You’ve chaired it before. Put this into context for us. How big of a financial challenge are we talking about here?

I think this is very little different from many of the other budgets we’ve had. Our state runs a very tight ship and it’s not infrequent that we find ourselves faced with large or even indeed unexpected deficits. So we don’t know what’s going to happen at the end of this year. I’m told that the folks at the Ways and Means Committee are confident that our numbers will come in and we will make the revenue estimates we expected. There is some overspending, some items related to Medicaid expansion and Managed Care at a higher rate than we had expected in the budget. That will have to be dealt with this year.

We just saw some positive revenue numbers for December come out this week, but Governor Maggie Hassan is still worried about a shortfall. She’s asking lawmakers to approve a tax amnesty program and another $1.4 million in cuts.

Do you support the governor’s approach? And are you worried about a shortfall?

I need to see the numbers. A tax amnesty program has been done before and does produce somewhat more revenue at an earlier time than it otherwise would come in, but it may not be the best way to do things. We need to see the numbers. That decision will be made by the Fiscal Committee, which has yet to be appointed and yet to start its look at this. So, it’s hard to say. I have no idea what’s going to happen at the end of the year, except as I say the folks at Ways and Means are telling us that the budget numbers as expected will come in. The issue is not revenue, as far as we can tell now. The issue is what are we going to do with all these new expenditures we have.

There’s been some pushback on the use of designated funds to make up for budget holes. We’ve seen Republican state Senators Jeanie Forrester and Nancy Stiles raise concerns raiding the state’s renewable energy fund.

What’s your position on this? Shouldn’t money that’s raised for a specific purpose go towards that, or is that just simply unrealistic given the circumstances?

I agree that’s what should happen. In the past, under both Democrat and Republican leadership, some of those funds have been – I think the polite expression is raided. I certainly hope we don’t do that again and I will try very hard to balance the budget without that having to happen. When we make commitments to people such as pay your additional $25 fee and the money will go to the land conservation and investment program to be used to acquire land or save certain buildings, I think we need to fulfill those promises.

Looking ahead, Governor Hassan hasn’t yet said whether she plans to include revenue from a casino in her budget, as she did in her first term.  Is that something you’d want to see again, or is too politically uncertain to weave into the spending plan that early on?

I think it’s much too uncertain. I think it’s unclear what would happen to that bill in the House, although one would expect it to pass the Senate. In any event, until that bill passes, I think it would be imprudent to include that revenue. The other issue of course is it takes several years from the time you authorize a particular activity, in this case gambling, and the time when the revenue comes in. The kind of revenue I suspect the governor would have to include would not be the revenue from some sort of tax on gambling, but the revenue from the fee that might be charged to a single casino. But again, for a whole variety of reasons, the timing of the receipt of that would be rather difficult to predict.

Let’s talk about some of the specifics.

The state needs to find nearly $24 million to pay for the mental health settlement. There’s a big chunk of revenue – upwards of $80 million – that’s being lost from the Medicaid Enhancement Tax.

With a Republican-controlled Legislature, any increases to taxes or fees are unlikely, so how do you come up with a balanced budget and not sacrifice the quality of state government services?

You do the same thing that we did in 2010, and that was to look at our priorities and to have a balanced budget without taxes or without new fees and ask what needs to be done to make this happen. The answer was we had to reduce programs. We had to eliminate some programs and we made some tough choices. The university system’s appropriation from the state was cut significantly at the time. We eliminated some programs in health and human services. It can be done and it will be done. The state balances its budget. And this time, we’re not going to do it with some of the ways we’ve done it before. We’re not going to borrow money. We’re not going to use accounting tricks. We’re going to make tough choices. That’s what the people elected us for and that’s what we campaigned on. And we’ll live up to those promises.