NH Senate passes $10B budget package

By Norma Love
Associated Press / June 1, 2011

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CONCORD, N.H.—New Hampshire's Senate passed a $10.3 billion budget package that sets the stage for negotiations with the House over a compromise plan where the biggest spending differences are on services for the mentally ill and disabled.

The Republican-controlled Senate voted 19-5 along party lines Wednesday to pass the budget and a companion bill that contains a number of policy changes needed to implement the spending plan for the two years beginning July 1. The Senate removed a several changes proposed by the House, including one that labor unions said would weaken their collective bargaining rights.

The Senate's budget spends less than Democratic Gov. John Lynch proposed -- about $244 million less from state taxes -- but $75 million more than the House. The House had made much deeper cuts to Lynch's budget, which already had reduced state spending.

The Senate's general fund budget is $2.5 billion. The total budget is closer to $10.3 billion once spending from federal and other non-state tax sources is included.

Many had hoped the Senate would restore most if not all the spending the GOP-controlled House cut from Lynch's recommended budget. Lynch had cut most agencies' budgets about 5 percent. The five Democratic senators tried unsuccessfully to restore funding for a variety of programs to the Senate's version of the budget.

State Sen. Lou D'Allesandro, D-Manchester, who had tried unsuccessfully in Finance Committee deliberations to restore funding for several small programs, renewed his effort on the Senate floor. For example, he tried to win support for $1.5 million to help about 240 elderly people with housing services such as meals and light housekeeping. D'Allesandro said many need the help to remain independent and stay out of nursing homes.

Senate Republicans voted down each attempt by Democrats to alter their budget.

House and Senate Republican leaders promised to write budgets that did not raise fees or taxes, which meant deep cuts had to be made.

Much of the money restored under the Senate's proposal supports those who are mentally ill and disabled. The Senate also added money not in the governor's budget for services for disabled residents on a waiting list.

Big losers in the Senate's budget are college students and hospitals. The Senate did not restore deep cuts in state aid to the University System of New Hampshire and instead used some of the aid the House designated for the system to instead provide scholarships for private college students.

The Senate version also included deep cuts to payments to hospitals, especially in reimbursements for caring for the poor. Cuts in state aid mean hospitals also lose matching federal funding.

Senate Finance Chairman Chuck Morse, R-Salem, told senators he'd like to use any surplus in the second year to help the hospitals, but Morse also said the money may be needed for other spending or to boost the state's meager savings. The Senate's budget projects a $33 million surplus at the end of the two-year budget cycle. The budget plan puts the money into a state savings account to boost it to nearly $42 million.

Republicans voted down D'Allesandro's attempt to use the surplus for hospital payments.

"This is cost shifting," added Democratic Sen. Matthew Houde of Plainfield. Houde said costs not reimbursed by the state will cost people with private insurance more as a result of hospitals seeking to recoup the costs from them.

Democrats also lost an effort to block the lease of the state's Cannon Mountain ski area. D'Allesandro argued the ski area is one of the state's crown jewels and should be operated by the state. But Senate Republican Leader Jeb Bradley of Wolfeboro said the state can't make the capital investment into the area needed to make it consistently profitable.

The New Hampshire Municipal Association, which represents communities, says proposed cuts in the state's contribution toward local employees' retirement and other aid programs will be felt by property taxpayers in reductions of services, local jobs and higher taxes.

The Senate partially restored spending on some programs -- for example -- choosing to fund services for about 50 youth with severe behavioral problems, but it did not fund services for about 370 other youth now getting help for a range of issues. Critics argue some of those cut off from help may wind up in the youth reformatory. Lynch had already eliminated funding in his budget for truants, but maintained it for youths who act up but are not yet considered delinquent.