The N.H. House's own March Madness begins

More than two thousand demonstrators rally on the plaza and lawn in front of New Hampshire's Statehouse Thursday, March 31, 2011 to protest proposed spending cuts and a provision that would strip public employees of their union protection when their contracts expire, in Concord, N.H.

The House Finance Committee is about to begin its final work on the proposed two-year operating budget it will put before the House the following week.

While some issues draw bigger crowds to public hearings like right-to-work, abortion restrictions and gun control, the budget ostensibly adopted by the legislature and governor in June affects far more people and it affects them personally.

A legislature may pass all the policies it wants, but if those policies do not have money behind them, then they never become reality.

That is why anyone who has been around the State House for any length of time will tell you the two budget bills are the most important ones the legislature passes in its two-year term.

Because it is so important, the temptation is to use it for more than funding state government and that frequently happens.

The practice was far more prevalent 30 years ago when budget footnotes often went unnoticed only to explode in a sea of bad publicity when someone realizes what has been done.

Next week the House Finance Committee begins executive sessions with its three divisions presenting their handiwork to the full committee.

Generally, what the divisions propose is adopted but usually not everything they want to accomplish.

It is tricky business aligning the three divisions’ work with total spending to reflect the leadership’s priorities.

The Finance Committee is not the only one making financial decisions for the state for the next two fiscal years.

The other key player is the Ways and Means Committee, which determines how much state revenue the Finance Committee has to spend by developing revenue estimates for the next two fiscal years and predicting how much will be raised when this fiscal year ends June 30. Whether there is a surplus or a deficit, it will have to be included in determining the next two years’ financials.

As of March 18, Ways and Means increased its estimates of state revenue by $134.6 million from figures adopted by the House last month.

The committee raised its estimates by $51 million for the current fiscal year, $38.3 million for fiscal 2022 and $45.1 million for fiscal year 2023.

Those figures represent a $60 million increase in general fund and education trust fund revenues over what Gov. Chris Sununu predicted in his proposed budget, but not the $70 million in additional revenue he told budget writers would be available after February revenues produced more than expected and continued an upward trend.

The revenue estimates are likely to increase again once the Senate begins work on its budget plan. Senate budget writers will have the benefit of knowing revenues from March and April before crafting their proposed budget.

That is important because March and April produce more revenue than any other months, particularly March due to business tax receipts.

If there is one segment of the economy not significantly impacted by the pandemic economic slowdown it is large multinational corporations that pay the lion’s share of the state’s business profits tax.

If the good trends for business taxes continue for this month and next, the Senate will have a far better picture of which way the economy is trending.

But the figures produced by the House Ways and Means Committee indicate budget writers have $134 million more general fund money to spend than estimates earlier this year.

While that is good news for budget writers, it is not as rosy a picture as it might be.

The governor defunded or reduced spending in a number of areas lawmakers see as problematic.

The $134 million does not go very far when you use $11 million to level fund the University System of New Hampshire and the Community College System of New Hampshire for the biennium as a commission decides on how to move forward with the governor’s merger proposal, and $1.5 million for the commission.

Or when you add about $30 million to the state and county match for nursing home Medicaid patients because the governor increased the amount of money counties, or local property taxpayers, would have to pay.

Or $20 million for the school building aid program, or $5.6 million for catastrophic aid for special education placements, or $3 million for the dual enrollment program for high school students with the community college system.

The $134 million does not go far in a projected $5.6 billion general and education trust fund budget plan.

Policy changes

This year several proposals have garnered a great deal of attention for their inclusion in the proposed budget such as requiring planned parenthood to separate its abortion services from its family planning and other health-care services or lose all state funding.

The requirement included in the proposed budget by Division III would essentially prohibit state funding for Planned Parenthood of Northern New England, which has traditionally played a significant role in providing health services to low-income women.

Requiring the separation is not something that can be accomplished overnight and would mean the end of Planned Parenthood as a health-care provider for New Hampshire.

Another budget inclusion is a provision requiring legislative approval for continuing a state of emergency beyond a governor’s first 21-day declaration.

There are bills that deal with the same issue but handle it in a more acceptable fashion to both sides of the aisle.

House Finance Committee Chair Rep. Ken Weyler, R-Kingston, was clear the provision was included in the budget in an attempt to win enough votes for the budget to pass the House.

Four years ago, the then former House Speaker Bill O’Brien wing of Republican House members refused to vote for the budget and the House never passed its own version.

Seeing a similar scenario this year, Finance leaders called House GOP members to see if they would support the proposed budget and found out many would not but said they would if a provision reining in the governor’s state of emergency powers were included.

Many would also say the governor tried a similar tactic putting the higher education systems merger in the budget rather than let the issue stand on its own when he knew opposition would be significant.

Burying it in the budget makes it less likely a deal-breaker.

Two years ago, Democrats included an education funding study commission in the two-year budget in order to give it more legs.

But the commission’s work has fallen on deaf ears this session with the change in party control.

Similarly, the last budget included several significant changes to the method of assessing business profits tax liability, but an attempt to rein that in this year passed the House only to fail in the Senate.

College basketball has March madness and the New Hampshire House has its own as differing constituencies compete to influence the next two fiscal years.

But the next couple of weeks are only the second round. The next round is the Senate, followed by the budget conference committee and the final comes when the governor decides if he can live with the legislative changes made to what he proposed four months ago.

However, the stakes are much higher than the outcome of a basketball game.

Garry Rayno may be reached at garry.rayno@yahoo.com.

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