Sanborn: A Look Inside Hassan's FY16-17 Budget

By Andy Sanborn

Yesterday, the Gov. Maggie Hassan, D-Exeter, presented the Legislature with her proposed 2 year budget, which will start in June.

Below, I will try to provide a narrative on the Governor’s presentation.

While not exhaustive, I’m hopeful it will provide a framework of the Governor’s priorities, yet remember the House will now be in charge of working through her presentation and making its proposed changes to it.

It is expected that the House will vote on their amendment Budget on April 1 (I kid you not) and send it to us in the Senate for our review and consideration.

As of this initial writing, I have not been provided the actual 2,000 page budget to delve into the numbers, but the House has been provided a copy.

Overall, the Governor has suggested the overall budget increase by 9%, or about $1 Billion in new, additional spending, from a combined $10.539 Billion to $11.488 Billion, an increase of $949 Million.

Highlights of her proposal include:

• Hiring a statewide Chief Operating Officer to oversee the entire agency operation
• Combining several licensing boards into one, consolidated ‘Office of Professional Licensing”
• Combine the Lottery Commission and the Racing and Charitable Commission into one agency
• Combine portions of the Highway and Safety Agencies into one
• Commit to an additional $13 Million and $6 Million to the University System and the Community College system
• Create a study committee to investigate how NH institutes a full day kindergarten
• No additional financial support for School Building Aid

She plans to eliminate the Education Funding Cap (remember there are several towns in NH, and this District ,which still do not receive the total amount they are due, with Bedford being short some $4 Million a year)

Funding to Charter schools remains fairly flat at $19 Million.

While as Majority Leader, then Senator Hassan eliminated revenue sharing to our communities from Rooms & Meals Taxes to fund a $135 Million general Bond to fund state government; in this budget she is suggesting $5 Million of that cut be re-instituted back to our communities in revenue sharing.

Additionally, there is an increase in the funding of the Travel and Tourism budget and a 100% increase in the Agriculture Promotional budget.

LCHIP funding is retained, as is the CHINS program for kids at risk.

The Governors’ commitment to renewable programs like RPS and RGGI see an increase as well.

The governor also expressed her continued commitment to an expansion of natural gas in NH.

There is also an increase to the Corrections budget to staff the new women’s prison.

Within the Capital Budget Program (the State bonds about $125 Million each budget), which the Governor did not fully expound on, she wishes to spend and additional $2 Million on an expansion of work force housing.

Additional fund in the Capital Budget to highlight include:

A new court for $18 Million in Merrimack County

• $15 Million for corrections
• $11 Million for Dept of Education
• $13 Million to the Community College
• $66 Million in Rail Transit
• $7 Million in highway funding

On the Health Care front, expect to see many suggestions from the Governor, including;

Providing funds to begin paying New Hampshire’s new, financial obligation under Medicaid Expansion (remember starting in 2017 the state will be responsible for 2% of the total program costs, increasing to 10% over time). While I have not seen the costs to day, the program was expected to cost $300 Million a year.

The Budget also implements “Step II” in Medicaid Managed Care, where those with developmental disabilities and long term care will now have their health care overseen by a management company.

The DD Wait list will see a name change to “Transitional Services” and be funded to eliminate the “wait”

There will be additional funding provided to expand 25 beds at New Hampshire Hospital for those with Mental Illness (this is to help take a burden off hospital beds) and funding to expand the NH Crisis Center.

Additional funding is also being allocated to increase substance abuse counseling.

Additionally, she is including a new substance abuse counseling service for all of the traditional Medicaid population (about 160,000 people are on traditional Medicaid now).

Commuter rail is also a priority for the Governor, and she is committing $4 Million to begin environmental testing on the proposed $300 Million rail system from Nashua to Manchester she is championing and she has $66 Million included with long term Capital Budget funds.

So, I’m sure some of you are asking how does this get paid for.

Overall the Governor believes the existing taxes in New Hampshire will grow by 2.7% and 1.9% each year of the budget through normal economic expansion and in addition, she is suggesting several new or increased taxes, including;

• A 35% increase in all car registrations
• An increase in Boat registrations taxes.
• A 21-cent increase in the cigarette tax.
• Expand the cigarette tax into E-cigarettes, and expand the Cigar tax
• Bring KENO in to the state

The Governor also looks to raise $48 Million from re-instituting a limit on how much compensation a business owner can claim as reasonable and the Budget includes new IRS/DRA auditors to go after the money.

In addition, she is taking the Tax Amnesty Program I am working on (where I am trying to bring $15 Million back to our communities in local road betterment funds) and using the money to fund the above programs.

What does this all mean…..

The Senate has been very firm in its position that we will not support any increases in taxes so priorities will have to be considered.

Andy Sanborn is the Republican state Senator for Bedford.