Spring must be here.
The tiny blue crocuses are open, songbirds are singing, the dogs beg to go outside and lay in the sun, and the Senate has the state budget.
House budget writers tried to thread a needle with their plan: include enough culture war and spending cuts to draw enough from the very conservative wing of the GOP House members without losing the half dozen moderate Republicans who remain in their caucus.
The big loser in that strategy was Gov. Chris Sununu who watched as House budget writers stripped one of his initiatives after another out of the House budget plan.
The college loan forgiveness program for graduates in high-demand fields like health care is gone, as is a school infrastructure program for broadband and safety measures and a new, 30-bed, secure psychiatric hospital on New Hampshire Hospital grounds.
Also gone is Planned Parenthood in a by now familiar amendment requiring the separation of healthcare services from abortion services both physically and financially.
The amendment also applies to several other providers of women’s health care for low-income patients.
Another culture war item is the contents of House 544 which would prohibit “the dissemination of certain divisive concepts related to sex and race in state contracts, grants, and training programs.”
The chief concern for many on the other side of the issue is it would apply to schools and universities.
The provision is based on a memo issued by former President Donald Trump in September before the election seeking to ban “critical race theory” and discussions of white privilege.
Another concern for the governor is a provision requiring legislative approval of declarations of a state of emergency — like New Hampshire has been under for a year — beyond the initial 21-day period.
And House budget writers moved money around in significant ways like adding almost $30 million more for county nursing homes to prevent a significant property tax increase under the county portion of the tax rate, $11 million for the two higher education systems to level fund them for the next two years while officials decide whether to merge the two systems — another Sununu priority that was overhauled — and $100 million of general funds to offset statewide education property tax money for the second year of the biennium.
The House also would reinstate education and training programs at the state prison which Sununu removed from his budget and would cut the Department of Health and Human Services budget by more than $72 million in back-of-the-budget, across-the-board reductions.
The cuts would be $22.6 million in personnel — over 225 positions — and $30 million in the 2022 fiscal year and $20 million in fiscal 2023.
The House proposed two-year budget would end with about a $35 million surplus that would go into the rainy-day fund or state’s saving account.
The message House budget writers sent to Sununu is that your budget spends too much.
The House budget package, House Bills 1 and 2 passed by comfortable margins, something that was not looking likely two weeks before the vote.
As House budget writers worked, Sununu said several times the House budget process “has gone off the rails” and he would veto the budget they proposed.
And he said he would work with the Senate to “fix it.”
The Senate begins budget hearings Monday with a presentation by House budget writers on what they did and why followed by the first meetings with state agencies for formal presentations.
The Senate always has an advantage when it begins work on the budget, revenue numbers from March and April, which are two of the biggest revenue-producing months for the state mainly because of business tax returns.
Most years, the House does not have access to the March revenue numbers because of crossover, usually at the end of that month and not as late as it was this year due to the pandemic.
While the House had access to the March numbers, they came too late to have any impact on its budget plan.
Despite the dire predictions a year ago in the early stages of the coronavirus infestation, state revenues have rebounded substantially in the last eight or nine months with one big exception, the rooms and meals tax, the state’s second-biggest revenue source, which is well below what it produced before the pandemic.
People still are not eating out and traveling like they did before coronavirus became a commonly used noun.
At the end of last month, state revenues were nearly $130 million more than anticipated at the three-quarter mark of the fiscal year and $182 million more than produced at this point last fiscal year.
Business taxes account for about $100 million of the “surplus funds” while the tobacco and real estate transfer taxes, and lottery returns are all more than $20 million ahead of schedule, and the interest and dividends tax is close at $19 million more than anticipated.
Certainly, these are very good numbers in a pandemic.
In normal years, which this is not, you would expect the Senate to make good use of the “surplus” money when it crafts its budget plan and it certainly will in some areas.
The across-the-board reductions in Health and Human Services will probably be at least reduced, for example, and at least some liquor enforcement officers restored.
But the Senate has priorities of its own and has tucked several bills away it never sent to the House, in case they were killed.
For example, revenue sharing with municipalities, an adult dental benefit for Medicaid recipients, children mental health services mostly for mobile crisis units, and increasing the share of the rooms and meals tax restaurants and hotels are paid to collect the tax.
The Senate has also passed a bill that would make school districts “whole,” which means they would receive the same amount of state adequacy aid they received this year although the number of students and the percentage on the free and reduced lunch program, used to gauge poverty, are both well below what they were before the pandemic.
The House took care of only one of the determining factors for state education aid.
Without changes school districts would lose more than $90 million in state aid because of the pandemic, which has been costly to most school districts as they prepared to allow students back into school buildings last fall, particularly for new air circulating and cleaning systems.
The Senate budget is likely to be at least a bit higher than the House’s and probably the one proposed by Sununu.
But Senate budget writers cannot be too generous because they will still have to negotiate with the House after passing their plan.
And that is where the rubber meets the asphalt.
Will the result still be “cheap enough” or contain enough culture war items to allow the very conservative members of the House GOP to vote for the package, which leadership will need because Democratic House members are not in any mood to vote for this budget? That is the question and we will have to wait until the end of June for the answer.
Garry Rayno may be reached at email@example.com.
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