There was a marked difference in the tenor in Representativesí Hall last Tuesday, when the Governor spoke, from his early January inaugural address. The inaugural address focused on the strengths of New Hampshire combined with an admonition to legislators to not shake the foundation upon which our state has made so much progress.
On Tuesday, the Governor brought forward his budget for the next biennium. The room was somber and legislators were focused on the details. And the Governor gave them plenty of details from a 20-page speech that took him more than an hour to read.
The excitement of inaugural day was certainly missing. The budget reflects a state coming out of a recession stronger than possibly any other state in the country and yet facing a tough revenue and spending situation. Much of the reductions in state government spending reflect the use in recent budgets of one-time monies. These are sweeps of designated accounts that had been raised and set aside for specific purposes and then taken into to the general fund to balance budgets.
Recent budgets have bonded what previously had been operating expenses. The most obvious one was bonding the $40 million plus of the stateís annual contribution to pay a percentage of the principal repayment costs for local school construction projects.
The other factor that we all knew would come is the end of federal stimulus money. The state received over $380 million in federal stimulus money for Medicaid and education and no one expects that money to return. Not having it, of course, means you have to cut the programs it paid for or find other money to fill the void.
There were applause lines in the Governorís address. His commitment to "no new fees or taxes," to finishing expansion of Route 93 to eight lanes from the Massachusetts border to Manchester along with a $2 million budget item for job training drew hearty clapping. And he recognized the work of department and agency heads, the new leadership of Chief Justice Linda Dalianis at the Supreme Court and even his budget director, John Beardmore, which brought standing ovations.
But there was grimness to the Governorís address. The elimination of the stateís subsidy that pays for 25 percent (was 35 percent just two years ago) of retirement costs for local government employees will increase costs at the municipal level. And more than 1,100 state employee positions will be eliminated including 255 currently filled jobs. That is a 10 percent reduction in the stateís workforce.
The Governor also took away
$20 million in Medicaid payments from the stateís hospitals as he
criticized them for executive compensation and how they use their
"excess cash" for advertising and buying up health care
practices instead of reducing health care costs. Strong words from a
Governor focusing on one sector of the health care provider community.
Much discussion will follow on this one.
I asked a conservative independent budget expert for his take on the Governorís budget. The response was "very good." I agree that it is a good starting point leading into the legislative phase of building a reasonable and realistic budget.
The Governor invited Senator Chuck Morse (Salem), the chair of the Senate Finance Committee and me, as chair of the Senate Ways and Means Committee, to go over the budget and his address with him and his budget director, John Beardmore, before his speech on Tuesday. One could tell the Governor knows his budget plan in detail, line by line, and the implications of his recommendations.
I believe having John Beardmore, a long-time staffer in the office of the Legislative Budget Assistant, as budget director is very positive. John is popular and respected around the State House, and he knows New Hampshire budgeting like few others. That is especially true of school funding. Given the importance of this budget to the future of New Hampshire, having John Beardmore working for the Governor will be a big help as the budget process moves forward.
One legislative leader suggested the Governor was dumping the budget on the legislature and walking away. Hardly, just two days after his speech, the Governor was in front of House budget committees. I have every confidence the Governor will be involved every day of the budget season as we work toward the scheduled final vote on June 23.
Toward the end of his speech, he spoke about Judicial Branch funding and noted the budget "funds almost all existing courthouses, with the exception of the Nashua District Court." I take that to mean that the closing of the Claremont District and Family Courthouse is not on the chopping block. That has been a contentious issue in the past.
Senate Bill 24 which would exempt Unity from the current moratorium on state school building aid was unanimously voted "ought to pass" by the Senate Finance Committee on Thursday. With my agreement, the bill will then be tabled and the language of the bill included in the Senate version of the state budget. Governor Lynch is also including similar language in his budget as part of House Bill 2. House Bill 2 will contain the statutory language to implement the new budget.
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