By GARRY RAYNO, InDepthNH.org
CONCORD — The proposed Senate budget package will have more money to spend than the House after the Senate Finance Committee Friday adopted revenue estimates.
The additional money — $53 million over the biennium — will allow the proposed Senate budget for the 2020-2021 biennium to boost spending for child protection, mental health and elderly services, said committee vice chair Dan Feltes, D-Concord.
However, the budget package will not include an expansion of the interest and dividends tax to capital gains, which the House used to increase state education aid for school districts struggling to provide educational opportunities for their students.
Gov. Chris Sununu has said he would veto the budget if it contains a new capital gains tax.
“I am shocked Gov. Sununu would protect a loophole that benefits the top 1 percent,” Feltes said, “and would provide a rate cut for thousands of seniors, sole proprietorships and others and boost state funding for eduction.”
House budget writers estimated the capital gains tax would produce $150 million during the biennium.
The committee voted to eliminate the provision, but did approve other measures that will increase revenues including bringing state business tax laws into conformity with federal provisions, and changing how the business profits tax is apportioned for companies doing business in multiple states.
Under the apportionment change, the state would base its assessment of unit sales or lease or rental within the state instead of overall business activity within the state.
For example Netflicks does not pay business profits tax in New Hampshire, yet has sales in the state and would have to pay under this provision based on its sales or rentals.
The change is expected to produce at least $10 million more annually, while the bill bringing state business taxes into conformity with federal tax law is expected to produce about $20 million annually.
Down party lines, the committee defeated an attempt to remove a freeze on reductions in the rates of the business enterprise and business profits taxes included in the House budget.
The change would have reduced state revenues during the biennium by about $95 million.
The Senate Finance Committee also approved changes to the new sports betting provision believed to produce about $10 million in new revenue. Sununu included sports betting in his budget proposal and it was approved by the House earlier this session.
And the Senate added pre-paid telephone cards to the state communications tax which is expected to increase revenues by $2.5 million over the biennium.
Budget Additions
The Senate Finance Committee approved adding $40 million in additional revenue sharing money for cities and towns. The money would be distributed equally over the two years of the upcoming biennium.
“There are absolutely no strings attached to this appropriations,” said Finance Committee chair Sen. Lou D’Allesandro, D-Manchester. “This is this committee’s attempt to move more money back to (municipalities.)”
The committee also approved $3 million in additional funds for the Granite Shield program which is intended to stop the sales of opioids in the state and reduce the epidemic claiming on average more than one life a day from overdoses.
And the committee added $6.5 million in general funds to the Department of Transportation to replace highway funds, which have been declining due to greater energy efficiency and the growth of electric vehicles, reducing gas tax revenue, one of the two major sources of highway fund money. Auto registration is the other major money source.
“We hope to do something in the future,” D’Allesandro said. “This has to be done.”
Health and Human Services
The Finance Committee voted 5-0 to establish a $2 million pilot program to help low-income seniors when they reach the “donut hole” of their Medicare Part D drug program.
Some Medicare recipients have to pay $1,200 for the medications once they reach the cap on their drug costs.
After they pay the $1,200, the program resumes paying and covers the entire cost of the person’s drugs for the remainder of the calendar year.
The program would help seniors who are below 250 percent of the federal poverty level.
And the committee decided to reinstate the foster grandparents program which was eliminated under the 2012-2013 budget, and the congregate living program for seniors, which was also eliminated in the same budget.
Committee member Sen. Cindy Rosenwald, D-Nashua, said the program helps keep some seniors off the Medicaid program, which saves money.
Secure Psychiatric Unit
The committee earlier this week asked Health and Human Services and Administrative Services officials for more information about Sununu’s proposed $27 million, 40-bed facility to replace the controversial Secure Psychiatric Unit at the state hospital.
The committee is excepted to continue discussing the new facility at budget meetings next week.
The House refused to include the money in its budget although Sununu touted the new building on State Hospital grounds during his budget address.
House budget writers said they lacked sufficient information about the facility to include it in their budget proposal.
The Senate Finance Committee asked for three or four options based on the the number of beds and services to be provided.
The Senate Finance Committee is scheduled to meet Tuesday at noon, Wednesday at 9 a.m. and Friday at 9 a.m. next week to decide on its budget plan.
The meetings will be in Room 103 of the State House.
The Senate is scheduled to vote on the budget by June 5.
Garry Rayno may be reached at garry.rayno@yahoo.com