Republican-Backed Spending Plan Passes, Despite Veto Threat

Jun 18, 2015

After a stretch of long days at the State House and a threat of a veto from the governor, Senate and House budget writers signed off on a two-year spending plan Thursday afternoon.

The $11.3 billion Republican-backed budget passed without any of the significant changes Gov. Maggie Hassan called for earlier that morning.

Hassan called the plan “irresponsible and unbalanced” and urged Republican leaders to go back to the drawing board to rework it. Otherwise, the governor said, she'll veto it when it hits her desk.

Before the vote, the committee's only Democrats -- Sen. Lou D’Allesandro of Manchester and Rep. Mary Jane Wallner of Concord -- removed themselves, stressing their belief that the budget didn’t go far enough to meet residents' needs.

“Our job is to make life better, that is why we are here. This is what we call public service,” said D’Allesandro.

But Republican leaders, including Senate President Chuck Morse, stand by the budget and say they consider a veto unproductive and fueled by political ambitions.

"If Governor Hassan vetoes our smart and sensible budget, it is only because of narrow and special interest and her ambitious for higher office," Sen. Morse told his colleagues.

The final proposal largely mirrors the version passed earlier by the Senate. Compared to the House's budget, the compromise plan would replenish the state’s rainy day fund, restore money to the renewable energy fund and increase funds for services for mental health, substance abuse and developmental disabilities.

House Finance Chairman Neal Kurk said he is “delighted” to put that money back in the budget, but said he is disappointed that the plan rolls over a $49 million dollar surplus from the current budget.

“I don’t like that because I believe a budget should be balanced within the revenues that it gets within its own terms,” Kurk said. He noted, however, that past budgets have rolled over as much as $70 million.

The budget also includes a series of cuts to the state's main business taxes. The cuts are a particular sticking point for Hassan. She said the budget fails to account for $21 million in anticipated revenue loss from the cuts in the next two years, in addition to even bigger revenues drops in future budgets.

Like the Senate and House version, the compromise budget also excludes a $12 million state employee pay raise. The raise was negotiated with Hassan's team, but Morse said there wasn’t enough money to pay for it in the budget.

Jay Ward, political director of the State Employee’s Association of New Hampshire, disagreed. “It comes down to a matter of priorities. It is in relation to the budget they just passed, a very small percentage, it’s a .0001 percent of the budget,” Ward said.

"It comes down to a matter of priorities. It is in relation to the budget they just passed, a very small percentage, it's a .0001 percent of the budget," said Jay Ward of the SEIU.

House budget writers also agreed to the Senate’s $7.5 million increase in tourism promotion, restored $1.25 towards community colleges, and added $4 million for emergency shelters.

The only slight deviations from the Senate's budget plan is a $1,000 increase in per-pupil charter school funding. and a change to the way the state distributes education grants to school districts.

The latter change, which differs from both chamber’s original plan, raises the cap on annual increases in 2016 and eliminates it by the start of the 2017 school year.

Another major issue under debate was whether to reauthorize the state's expanded Medicaid program. Democrats wanted to make expansion part of the budget, but Republicans decided to delay the debate until January, after the federal government provides more details on the program's funding.

But D’Allesandro argued that putting this issue on hold could prove disastrous for the roughly 40,000 people currently covered by the expansion. 

“By not re-authorizing the program, what we are doing is two things," D'Allesandro said. "We are causing a level of anxiety among the people who are served, as well as creating uncertainty in the market place."

The compromise budget plan must now be approved by the full House and Senate, and then to the governor's desk. With business tax cuts in, and Medicaid expansion and a state employee pay raise out, Hassan says she is likely to veto the budget when it likely reaches her desk next week. Republican leaders say they're drafting a continuing resolution, which would allow state government to operate throughout the summer if Hassan and legislators fail to reach a deal.

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