OPINION: What’s Really In and Out of the Compromise Budget

Print More

Rep. Marjorie Porter, D-Hillsborough

By Rep. Marjorie Porter, D-Hillsborough

Last week, the House and Senate reached a compromise on the budget. They worked long and hard, and by all accounts the deliberations were cordial and done in public, not behind closed doors as in the past. The resulting budget is fair, responsible, and balanced. It delivers on our promise to help reduce property taxes. I will be proud to cast my vote in favor.

As in all compromises, each side gave up something to get something. We thought we were compromising with the governor too, but that is, I guess, another story.

There seems to be a lot of misinformation out there, so let me tell you just what this budget does and does not do.

Although the House compromised by getting rid of the capital gains tax it had proposed, this budget still makes the largest investment in local public schools in more than twenty years–$138 million all told. The largest amount of support goes to the communities most in need.

Over the biennium, Hillsboro-Deering School District will see more than $2 million in additional aid; Conval District towns will get an additional $1.9 million. Building aid and catastrophic special education aid are funded. More money is going to charter schools, and full day adequacy grants will be given for full-day kindergarten students.

More funding is going to the university system too, and in-state tuition rates will be frozen at community colleges and UNH.

Back in 1969, when the state created the Business Profits Tax (BPT), it promised to share the profits with the cities and towns. For more than ten years, it has failed to live up to that promise. We fixed that. This budget provides an additional $40 million in unrestricted municipal aid, money cities and towns can use as they see fit.

The increased aid to schools and municipalities will go a long way in relieving the tax burden local property taxpayers carry. Consider it a tax cut for you and me. People seem to like those.

The budget addresses the mental health and opioid crises as well. Money is provided for the building of the Secure Psychiatric Unit proposed by the Governor in his budget, additional beds at the state hospital, and a children’s mobile crisis unit. Funding is provided to increases the rates of pay for mental health providers, some of whom have not seen raises in decades. This will help recruit and retain these vital workers.

Help for NH’s small businesses, homelessness prevention funding, protections for women’s health services, support for law enforcement—it’s all in there. If you want more details, there’s a link at the bottom of the page to a detailed document. It’s not hard to read.

So, what’s not in the budget?

The Senate’s #1 priority this term, Paid Family and Medical Leave Insurance, is gone. It was a big compromise for them. The House’s capital gains tax is gone. It was a big compromise for us. The governor said he would veto a budget that included these, so we took them out. Compromise.

There is no business tax increase. This is one of those pieces of misinformation. The BPT tax rate remains the same as it is right now. It was set to go down 0.2% next year. That’s zero point two per cent. In order to pay for the increase in aid to schools and communities, we froze it where it is. Remember the promise made to municipalities in 1969 when the BPT was created, to share the wealth? We’d rather share than cut.

And while we’re on the topic of business taxes, you might be interested in a few facts. According to “Funding the State Budget: Recent Trends in Business Taxes and other Revenue Sources,” a May 22, 2019 publication from the non-partisan NH Fiscal Policy Institute, more than three out of four business filers in NH pay NO Business Profits Tax. Let me say that again. More than 75% of business tax filers pay no BPT tax at all. The tax is paid mostly by large, out of state corporations. In fact, for all businesses, the largest tax burden is—you guessed it—the property tax.

To say freezing the BPT tax rate is unfair to our small businesses is simply not true. Small businesses don’t pay this tax. In fact, the budget does include business tax reform that ensures small businesses do not get double-taxed by other states. This, along with the property tax relief, will actually help our small businesses thrive.

There is no deficit.  The budget is balanced. My colleagues from across the aisle love to fiddle with numbers, and accuse Democrats of irresponsibility, but in fact we do things pretty much as they are always done, even when Republicans are in control. We know that because of the impeccable honesty of our Legislative Budget Assistants.  These dedicated and hard-working folks deserve so much praise. More than just number crunchers, they are non-partisan, serving the members of the Finance Committees in the same way, no matter which party is in control.

And when the LBA tells us carrying forward the current budget surplus to the next budget is frequently done, that this budget is projected to have a $20 million surplus in 2021, and that the Rainy Day Fund, at $118 million, is the highest it’s ever been—well, we trust them

The House and the Senate made some major compromises in order to craft a budget that meets the needs of Granite Staters. And for the first time in a long time, it offers a tax cut to you and me, the average Janes and Joes.

We compromised, and met the governor more than half-way, but he is still threatening a veto. Vetoing the budget will cause hardship for people throughout the state, and this will be disproportionally felt in our poorest communities.

One wonders where the governor’s loyalties lie. Is giving big, out-of-state businesses that 0.2% tax cut more important to him than tax cuts for you and me? We’ll wait and see.

InDepthNH.org takes no position on political issues. The opinions expressed belong to the writer.

Comments are closed.