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Patricia "Ricia" McMahon
State Representative, District 3

March 25, 2010

Representative McMahon is a member of the House Executive Department & Administration Committee, and represents the towns of Newbury and Sutton.

NH House Finance Committee Budget Reductions 

The proposed budget (HB 1664) voted on by the New Hampshire House Finance Committee with recommended reductions in the stateís operating budget for fiscal year 2011 was "tabled" by the full House. The House will await the March and April revenues returns as well as hear reports from each of the Commissioners who oversee their own respective budgets. By tabling an introduced bill it could become a vehicle for further consideration as more financial information is available. I voted to Table the bill.

A balanced budget ultimately will need to be presented and passed. Currently, the only way to accomplish that is through budget reductions.

However, programs most affected by painful cuts are those that are most needed by people who generally rely on the state. It is likely that further review of the budget will include the Division of Children, Youth and Families diversion programs, funding for family resource centers, reduction in out-of-home residential care; Regional Planning Commission contracts in DES; consideration of LCHIP; and a social services block grant in the Bureau of Elderly & Adult Services. 

The Division of Developmental Services could see a reduction in the developmental services waitlist and the acquired brain disorder services. This reduction would then allow the HHS Department to continue to provide services to individuals currently receiving services, but would freeze the waitlist in FY 2011.

Other agencies that might have reductions in future budgets include Department of Education dropout prevention and local education improvement program; Governorís Commission on Alcohol & Drug Abuse Prevention; Medicaid Provider payments; as well as cuts to Justice and Corrections Departments.

Education Funding Transition Formula

I supported the approach used by the Commission that defined the formula for costing an adequate education completed in 2008 and which provided a base line for funding education in New Hampshire. 

The base line that the Legislature passed was a two year transition plan with limits to adequacy grants and the "collar" to moderate any immediate impact on communities such as Newbury that would see the most significant reductions in state aid. To date this methodology has not been challenged by the communities that initiated multiple law suits costing all taxpayers thousands of dollars over the years. Changes to the formula would likely prompt a court case which could put New Hampshire back to square one.

Communities received more than $100,000,000 in additional funding in this biennium as a result of the methodology. Having the formula also supported the State's successful application for $160,000,000 stimulus funding for that effort over the two years. Downward pressure on tax payers has been dramatically reduced through the use of ARRA funds received from the federal government. 

While the stimulus funding would not be jeopardized, proposed legislative action such as HB1674 or HB1677 could disrupt the core structure during this very difficult budget environment. A vote to extend the transition could call the entire structure into question by the communities which have not benefited to the full extent provided by the costing formula. 

The House Finance Committee recommended the current formula for school funding that is in place for both this year and next year because it is constitutionally appropriate and has increased the amount of funding from state sources. The intention of the formula was to give local school districts the comfort of stability while, at the same time, advance notice that if New Hampshire is to support public education at the current levels, there are subsequent budget consequences.

In the past I supported a constitutional amendment that would have given the State more flexibility in how aid would be distributed. This was also an effort of the Governor that was thwarted by the inability of the Legislature to put the question in front of the voters. As one of the 108 Democrats who voted for the amendment in the House I was disappointed that none of my colleagues across the aisle could support it. 

To date the Governor and the Legislature have not supported "broad based" taxes as a solution but have relied upon substantial property taxes augmented with an array of other fees, charges and taxes from biennium to biennium. In the past this approach has worked and New Hampshire has suffered less than many, if not most, of our sister states in this recession.

Ricia McMahon
State Representative, Merrimack County District 3
Newbury and Sutton

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