Here’s what’s been happening in Concord the past six weeks regarding the New Hampshire state budget:

·       First, the governor presented her budget to the House of Representatives with many cuts already in it.

·       Then, the House Ways and Means Committee reviewed the governor’s revenue projections and decreased them significantly.

·       Next, the House Finance Committee cut the governor’s budget (although they increased funding in one area—to give wealthy families money for private schools) to meet the new (lower) revenue projections.

All of this will have significant effects on all Granite Staters.

Was this budget well liked? No. Not only did every single Democrat vote against it, objecting to the cuts to essential services and public schools, the expansion of funds for wealthy families for private schools, and other serious problems, but even some Republicans voted against it. 

However, with Republicans outnumbering Democrats in the NH House by 31, this irresponsible budget still passed. The vote was 185-175.

The budget is now with the Senate, which is conducting its own review. Republicans — including Sen. Tim McGough, who represents Amherst’s district — outnumber Democrats in the Senate, as well.

If this budget passes, residents will be paying higher taxes and losing services. That’s right, we will be paying more for less. There is no “sugar coating” this. There are many effects to taxes, cultural experiences, health and mental health, education, and grant monies.

Like what, you ask? Read on. Let’s start with revenue.

Revenue

There has been quite a move by the Republican Party in Concord to cut everything they can that supports Granite Staters. First, there is the governor’s budget, which was created by Governor Kelly Ayotte along with her Budget Director, who has been in office for years before she was elected. With the removal of the Interest and Dividends Tax along with the decrease in the Business Enterprise Tax, this budget is already behind in revenues.

The governor was very aggressive in her assumptions regarding revenue she would rely on from Video Lottery Terminals (VLTs), which the state is trying to assume is the same as Historic Horse Racing and will become legal in the state with this budget. The estimate is approximately $127 million will be raised, with an assumption that the share distribution of winnings will be 45% going to the operators and 55% going to the state for revenue. The Republican budget then cut the amount of revenue to be received because they assume a share of winnings of 70% going to the operators and 30% going to the state for revenue. The Republicans’ assumption is that businesses will not invest in VLTs unless they are able to keep more of the share of winnings to invest in the new terminals. So, this is a huge loss to the state. Not to mention that the state is now relying on revenue from gambling, which typically has most participation from less-wealthy residents. So, instead of keeping the Interest and Dividends Tax, which was paid by extremely wealthy residents, the state is going to rely on an unpredictable source of revenue from those who have less wealth to begin with.

Here is a summary of concerns regarding revenue:

1.       Repeal of Interest and Dividends Tax — A loss of approximately $180 million

2.       Decrease in business taxes — Estimated loss of between $795 million and $1.17 billion since 2015, weakening support for core services

3.       Reduced Meals and Rental revenue to municipalities — A loss of approximately $11 million for municipalities, which will force increases in local taxes

4.       Increased fees on vehicle registrations, licensing, and agriculture — These effectively raise taxes on residents

Cuts to State Programs, Which Means Property Taxes Will Rise

What is apparent in the governor’s and the Republican Finance Committee’s budget is the vast number of cuts to state programs that support Granite Staters and municipalities that are supported through grant programs. Here is a quick summary of a few of them.

1.       $44.6 million — Cut from the Municipal Wastewater State Aid Grants program. This cost will now be the full burden of the local taxpayers and will increase costs to municipalities.

2.       $1 million — Cut by consolidating the Personnel Appeals Board with the Public Employee Labor Relations Board and the Right-to-Know Ombudsman. This will make it more difficult to appeal labor issues and slow down issues related to right-to-know.

3.       $35.2 million — Cut up to 194 positions at the Department of Corrections, including teachers, social workers, and councilors who work with the incarcerated individuals to decrease recidivism (in other words, these roles help decrease crime).

4.       $2.2 million — Cut by eliminating the Office of Child Advocacy. This office provides independent oversight of child serving agencies, responds to complaints about child services, and works to improve child welfare and the juvenile justice system.

5.       $1.7 million — Cut by eliminating the NH Council for the Arts.

6.       $561,000 — Cut by eliminating the NH Commission on Aging.

7.       $3.8 million — Cut by eliminating the Division of Arts in the Department of Natural and Cultural Resources.

8.       $20 million — Cut the Renewable Energy Fund. This budget raids this fund, taking the money that is supposed to go to renewable energy and using the money in a way it was not meant to be used.

9.       $30 million — Needed for additional expenses for the YDC settlement ($10 million for the one settlement agreement already made through the courts; an additional $20 million allocated to the YDC settlement fund for cases that have not been settled yet).

10.  $13.6 million — Additional funding for the State Bridge Aid Program, which provides a state match from construction or reconstruction of municipally owned bridges.

11.  Eliminates the law enforcement personnel of the State Liquor Commission and only funds the licensing enforcement. Local enforcement will be done by local and state police, which could be an additional cost to taxpayers.

12.  Diverts money away from the opioid trust fund to police enforcement, decreasing the work being done to reduce the opioid crisis in the state.

13.  Eliminates the Human Rights Commission and reassigns cases to the courts.

Education Programs

What to say about education? The Republicans are continuing to attack public education in every way possible. From expansion of the EFA programs, to adding budget caps and tax caps in the budget and removing local control, to cutting adult education programs and funding to our university systems, and adding anti-trans and anti-diversity, equity, and inclusion language to the budget, the Republican budget means one struggle after another for our public schools.

The good news is that the budget cap on school districts that was added to the budget by Republicans was removed by amendment by vote of the House of Representatives. But here is the catch: this bill (HB 675) is still retained in committee and could come back next January to be voted on by the House.

Here is a quick summary of some of the funding concerns in the budget:

1.       $50 million — Cut from UNH, Plymouth State, and Keene State. This means students and their families will pay more to attend their state universities.

2.       $1.6 million — Cut from adult education programs, basically eliminating this program throughout the state.

3.       $550,000 — Cut by the Republicans for robotics funding.

4.       $32 million — Added to the budget to support the EFA programs (for private schools). Studies show that the costs could increase by $60 million–$100 million if the income thresholds are removed (incredibly, this means wealthy families whose kids are already attending private schools would now receive taxpayer money for each kid in private school).

5.       $100 million — Additional funding provided over the biennium to schools for high-cost special education aid students and sets the proration at no less than 80%.

Health and Welfare Costs

One thing to keep in mind in all of the areas discussed below is that there are many federal grants that are one-for-one match that we will lose because we are not providing the original expense in the budget. Many of these items can be seen as an additional tax because all of the costs will be picked up by individuals directly affected by the cuts to the programs. These programs support New Hampshire residents that are most in need of support. Instead of ensuring we protect the most vulnerable, the Republican budget is increasing the costs to these individuals.

1.       $52.5 million — Cuts Medicaid provider rates by 3%. This will be crushing to individuals with developmental disabilities, as they will lose access to services.

2.       Other Medicaid changes include a premium and copay requirements for those who are in the Granite Advantage program. This premium will be up to 5% of their income.

3.       Also included in the budget would be a 5% additional premium to those on the CHIP program (Children’s Health Insurance Program).

4.       On top of all of this, there would be a requirement to develop an outpatient procedure incentive plan. This would have Medicaid recipients find lower cost setting ambulatory surgical care.

5.       This budget provides funding for three positions to enhance the Medicaid recovery efforts. This means that these individuals will go after people’s estates after they die to pay for any outstanding medical bills. The families that are in these Medicaid programs would be hurt even more when any assets they may have could be used targeted by this board to pay for outstanding bills.

6.       $31.3 million — Cut from the developmental disabilities community. These costs were being used to try to prevent waitlists for any new adults transitioning to adult services.

7.       $37 million — Cut from Community Mental Health Support, including staffing the crisis hotline.

8.       $1.7 million — Eliminates the Family Planning Program that supports birth control, checkups, cancer screenings, and other reproductive care.

9.       $2.5 million — Eliminates the Prescription Drug Affordability Board. This will pass the cost on to residents.

10.  $1.2 million — Eliminates the tobacco prevention and cessation program.

11.  $1.3 million — Freezes new enrollment in the State Loan Repayment program. These are grants up to $50,000 per person to attract nurses to rural areas. This hurts the northern part of our state, which struggles to attract doctors and nurses to their rural communities.

12.  $560,000 — Eliminates the WIC program where people can use these benefits at local farmers markets.

13.  $4 million — Cut by imposing a 3% increase in the cap on county payments for long-term care services instead of the statutory 2%. The county nursing homes would not be able to receive additional state support from the state. This will cause an increase in the county tax rate that will be a burden to the local taxpayer.

14.  $7.5 million — Funding provided for the childcare workforce program using TANF funds (Temporary Assistance to Needy Families).

What Is a “Better Budget”?

Every single cut to a program is just devastating. The Democrats on the Finance Committee worked on a separate budget because there was no compromising with the Republicans. This “Better Budget” used revenues that split the difference between the governor’s projections and the Republican Ways & Means members.

How did the Democrats pay for the “Better Budget”? We rolled back the expansion of the EFAs, saving $32 million, returned to the governor’s revenue distribution for the Video Lottery Terminals, increasing revenue to the state by $74 million, assumed modest economic growth (still significantly below the governor’s estimate), which increased revenue by $285 million. This allowed for many of the offices, personnel, and programs to be reinstated from the Republicans’ cuts. The Better Budget received a vote on the floor as an amendment, but it was rejected along party lines, with Republicans voting against it.

The Republicans’ budget is now with the Senate, which will work with the governor to modify what was passed by the House. These negotiations will tell a story of what the senators and the governor believe are priorities for the Granite State.