New Hampshire's state budget faces a final Senate vote

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May 31, 2011

New Hampshire

by Eileen McGuire-Mahony

Concord, NEW HAMPSHIRE: Tomorrow morning, New Hampshire's state Senate is slated to vote on a $10.3 billion biennial budget that comes in well above the version the House passed, but is still short of what Governor Lynch requested.[1]

HB 1 added back in $75 million from the version that passed the Republican dominated House. It did not, however, rise to the levels of spending that four-term Democrat John Lynch requested. The most significant difference between the House and Senate versions was in funding for Health and Human Services, with the Senate restoring approximately $49 million that the House had cut over the next two years. In close to two dozen other departments, both chambers largely agreed on what to cut and what to sustain.[2]

New Hampshire's current biennial budget ends on June 30, 2011, when the state closes out its fiscal year. For that period, its budget was $11.5 billion. Compared to a few years ago, the Rainy Day Fund is at 10% of its 2007 balance and debt is up 30% since 2006. Revenue predictions and the looming loss of stimulus money means the Granite State needs to make up $300 million somewhere.

Originating from a legislature that, for the moment, the GOP controls comfortably, the budget provoked ire from Democratic interests. Republicans proposed to cut spending heavily but also to take a broad path through various fees and “sin taxes”, slashing revenue as well. To balance the budget and allow for reducing taxes on such items as alcohol, lodging, and vehicles, spending on social services would have necessarily gone down, something branded “ideology run amok” by one paper.[3]

Such criticism resulted in some victories. The House did reinsert a cigarette tax, citing the estimated $14 million a year New Hampshire might collect from the 10¢ a pack levy.[4] Still, for the hot button issues where proposed cuts were nixed, there were other areas that absorbed the funding cuts. Beginning with Governor Lynch's call for a 5% across-the-board reduction and moving on the House's pruning of higher education spending, the Senate cut funding for the University of New Hampshire even more, leading to threats of tuition hikes and heightened property taxes from university adminsitrators.[5]

After tomorrow's votes, one the next to last day when the Senate may legally take up the matter, New Hampshire's budget will shift to the matter of how state agencies and municipalities cope with their newly austere balance sheets.

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