Legislative Update

Last Thursday, April 11, was the last day for the House of Representatives to act on House Budget bills. We voted on three bills, HB 25-A, HB 1-A and HB 2-FN-A-Local. Throughout the last several weeks I’ve listed all the major bills and the results of the vote on each bill. I did not take a stand or make comments as to my position as a Republican representative. You are all welcome to visit www.gencourt.state.nh.us and view each bill and how your Representative voted. I will, at the conclusion of these three bills, make comments on the House Democrat budget and on how this budget could affect the citizens of New Hampshire. I welcome any and all comments as well as any Democrat response.

Allow me to first describe the budget process.

Every odd year the state must create a two-year budget. It starts with the Governor, who writes a first draft with inputs from all state agencies. Then the House Finance Committee, the Ways and Means Committee, and the Public Works Committees make their recommendations. Those proposals then go to the House of Representatives as the operating budget consisting of two bills: House Bill (HB) 1, with the dollar amounts, and House Bill (HB) 2, with the corresponding new laws, fees, funds, revenues and expenditures. House Bill (HB) 25 (known as a trailer bill) is also introduced as the Capital Budget for projects, involving necessary multi-year borrowing).

After the House votes on the budget it goes over to the Senate – for acceptance or amendment. The Senate usually gets updated revenue projections based on additional tax return information and economic data. Spending levels can be adjusted depending on this new information. When the Senate is finished, a “Committee of Conference” (COC) is usually required, consisting of members from both bodies appointed by the House Speaker and Senate President respectively. The COC works out differences between the House and Senate versions of the budget and then produces a report for the consideration of both chambers. If each body approves the COC recommendation, the final budget goes to the Governor for signature – or veto.

Several things happen if the Governor vetoes the budget.

First, both legislative bodies – the House and Senate – will convene to consider overriding the veto. It takes a two-thirds vote to override a veto.

Second, if the veto fails – meaning the Governor does not receive enough votes to uphold his veto – then the Senate version of the budget would pass, usually without a signature. If the Governor’s veto is upheld, then a Continuing Resolution can be used to temporarily fund the state government until a budget is approved. If the budget fails again and no compromise is reached, then a government shut-down could occur.

HB 25-A – makes appropriations for capital improvements for the biennium and extends certain lapse dates concerning previous appropriations. This bill appropriates $1 million less than in 2017 and is within an acceptable range regarding the Governor’s Office. It also keeps the Governor’s initial requests virtually intact, and addresses certain unanticipated projects, such as the dredging of the Rye Harbor. The Publics Works & Highways Committee recommended Ought to Pass as Amended (OTP/A) 18-0. Republicans on the Committee unanimously supported OTP/A. There was a Roll Call vote: 362-5 for OTP/A.

Regarding HB 1-A – making appropriations for the expenses of certain departments of the state for fiscal years ending June 30, 2020 and June 30, 2021; SEE COMMENTS BELOW. The Finance Committee recommendation OTP/A 13-9. Republicans on the committee unanimously opposed OTP/A. The roll call vote to adopt the amendment went 223-161 and a Roll Call to adopt the bill supported OTP/A 225-159, with Republicans unanimously opposing.

Regarding HB 2-FN-A-LOCAL – relative to state fees, funds, revenues and expenditures; The Finance Committee recommended OTP/A 13-9, with Republicans on the committee unanimously opposed OTP. A roll call vote to adopt the amendment went 222-159 and a Roll Call vote to adopt the bill, passed 224-160, with Republicans unanimously opposing. SEE COMMENTS BELOW.

Comments on HB1 and HB2

The Budget – as proposed by the Democrats – increases spending by 13% ($637 million in General and Education Fund spending and over $1.5 billion in total funds) over the current operating budget, FY2018-2019, according to the nonpartisan Legislative Budget Assistant’s Office.

Democrats want to call their plan tax relief but still ask our citizens for more than ​$400 million in new and increased taxes.

This bill includes:

• The repeal of future business tax rate reductions​ costing our job creators $90 million over the next four years.

• $150 million per year capital gains tax proposal​, which applies the Interest and Dividends tax to capital gains. Their revenue estimates for this new tax are inflated, untested, and unrealistic.

• Replaces the governor’s voluntary family leave plan and replaced it with their likely-to-be-insolvent, state-run insurance program funded by a mandated 0.5% tax on wages​, costing workers/businesses $168 million per year. It will cost more than $15 million to develop and require over 40 new government employees to administer.

• One-time revenue is being used to grow government​, which will cause a structural deficit in future budgets. Governor Sununu had proposed using one-time revenue for one-time projects, most of which the Democrats deleted from the budget to fund other things.

• $20 million less would be deposited into the rainy-day fund (FY19 through FY21), as compared to the governor’s budget.

• Authorizing 157 new positions at a cost of $23 million,​ over double what the Governor proposed.

• Restored $500,000 in funding to the Internet Crimes Against Children fund, after saying they were not aware it was a priority.

• Removes $750,000 per year community-based services for the developmentally disabled community.

• Dramatically revises the education funding formula resulting in $130 million in additional state costs for education, and disregards the formula adopted by a bipartisan (262-82) vote the House on HB709 (now retained by the Finance committee) that more fairly and affordably addresses education funding.

• Deletes the Capital Infrastructure Revitalization Fund, which used $115 million in 1-time revenue for dozens of shovel-ready one-time projects across the state.

• Decouples Keno revenue from full-day kindergarten, requiring the state to pick up the ongoing cost of the grant program as part of adequacy funding.

• Removes the Office of Early Childhood Education.

• Raises the fee for a Real ID by $10 (a 20% increase), that the Department says it doesn’t need.

• Raises the motor vehicle records fee from $12 to $13.

• Removes the governor’s targeted school building aid program

• Removes the governor’s student debt assistance program

• Increases spending by $77 million for new and expanded programs in DHHS, but that may not be enough to get the list of programs fully operational, creating worry for future potential costs

• Deletes $26 million in funding for a secure psychiatric unit.

• Freezes the Sununu Center’s Budget at FY 19 levels, forcing additional cuts. Aggregate budget and back of the budget cuts amount to $2.9M over the biennium.

• Spends $2.5 million on an undefined dental benefit for Medicaid recipients.

• Could cause a negative balance in TANF reserve funds as a result of overspending what we can reasonably expect for federal funds by over $30 million.

• Rdds an additional $1 million in family planning funding in the event federal funding drops.

• Decreases funding to the permanently and totally disabled by over $3 million.

• Cuts the funding for the governor’s proposed pediatric cancer study by more than 50%

• Fails to fully fund the County Participating Nursing Program

• Cuts funding for a pediatric cancer study by over 50%.

• Removed the governor’s proposed lead remediation loan fund

This budget proposal is a drastic change in direction from the fiscally responsible budget the Republican-controlled House submitted during the last two budget cycles. The Democrats claim their budget will lower property taxes, increase revenues and promote responsible spending. For the reasons outlined above, I don’t agree. I see an increase in business taxes, an income tax on personal wages and an increase in capital gains tax. Democrats propose to use surplus monies and one-time revenues to fund operational costs which will be required in subsequent budgets. Their plan also adds 157 more positions at a cost of $23 million. Growing government, using one-time revenues, and increasing taxes, are not responsible actions for a sound budget while doing great harm to our “New Hampshire Advantage.”

Rep. Reed Panasiti, Hillsborough – 22, Amherst.