Budget May Give House Upper Hand in Negotiations with the Senate

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Garry Rayno is InDepthNH.org's State House Bureau Chief. He is pictured in the press room at the State House in Concord.

By GARRY RAYNO, Distant Dome

Crossover is finished and the House passed a $16 billion budget with a three-to-one majority and now it is up to the Senate to put its stamp on the state’s operations for the next two years.

Give House Speaker Sherman Packard credit, he knew the Republican votes were not enough to pass a budget package.

As the vote on the compromise amendment showed, there are 60 to 70 Republicans who would not support a budget that did not make a draconian slash in state spending.

You might think they are the usual Free-Stater/Libertarian wing of the party, but a number of those folks are close enough to leadership that they went along with the compromise.

But unlike six years ago, when a similar hard right wing of Republicans refused to go along with the House Finance Committee’s work, then House Speaker Shawn Jasper tried to win the votes within his own party and a budget failed to pass for the first time in anyone’s memory.

Packard did not want that to happen, and he had a far closer partisan breakdown than Jasper, so in some ways it was more logical to turn to the Democrats to help push a budget across the finish line in the House.

And the vote was significant enough at least on the compromise amendment, because the two budget bills passed on a voice or unrecorded vote, so everyone can have deniability going forward, the House will have a strong position if it comes to a committee of conference on the budget in two months.

Most budgets do go to a conference to work out differences.

In 2017, the House requested a conference committee with the Senate, although they had no approved budget to defend, and were at the mercy of the Upper Chamber in negotiations.

That is not a good place to be and that is why Packard sought a compromise that would sway enough Democrats to pass a two-year plan.

The compromise to bring the Democrats on board, did better than that, it brought all Democrats on board, but meant 63 Republicans voted “No” including some House Finance Committee members who in years past would be on some other committee this week and parking in the Storrs Street garage.

The compromise made a number of changes Democrats needed to support the budget plan: fix the education funding formula, add money to affordable housing, Medicaid reimbursement rates, and programs for troubled youths, and changes to the Education Freedom Account program.

The education funding plan the House tweaked from Gov. Chris Sununu’s proposed budget, was a disaster that hurt the communities they all said they were trying to help while significantly rewarding communities that did not need the help.

The new funding plan changes the focus of school funding from per-pupil grants to fiscal and educational needs. Since its inception more than 20 years ago, the core of the funding formula has been the per-pupil adequacy grants that are the same for everyone.

What that does is reward larger cities and faster growing communities which is why Bedford and Windham and Salem and Hanover and Durham received much more money under the plan, while Claremont, Berlin, Franklin, Hebron, Pittsfield and Newport received the same state aid they are receiving now or a little bit more.

If there was one thing the Education Funding Commission accomplished three years ago, it was putting in black and white with data, what most everyone assumes, students from property wealthy communities perform better than those from property poor communities.

The quality of education you receive depends on your zip code.

The new formula is a small step in the right direction, but until there is either a lot more state money for public education or a real overhaul of the system, the disparities will remain.

There are two lawsuits before the courts this year that may bring about some more changes to the education funding system so lawmakers may be revisiting the formula sooner than the next budget cycle.

Affordable housing, frankly just housing, is a huge issue in New Hampshire as it is in many places in the Northeast and around the country.

The compromise plan adds back $15 million the House Finance Committee cut from the $30 million affordable housing fund in the governor’s plan.

That is not a lot of money when the state needs an estimated 20,000 housing units, but it is in the affordable housing fund unlike the governor’s plan which did little to require affordable housing instead allowing market-rate developments with state matching funds.

The Democrats also were successful in adding $40 million to the Medicaid reimbursement rate increase, which the governor proposed as 3 percent across the board, but the House instead emphasized long-term care, both nursing home and in-home care, mental health centers, and substance abuse treatment programs.

And the provisions of two Republican House bills expanding the Education Freedom Account program eligibility that were in the budget were removed.

One bill increased the income cap from 300 percent of the federal poverty level to 350 percent and automatically qualified some students such as those with disabilities, in foster care or in consistently underperforming schools.

The other bill changes the statute to include EFA grants as a permissible use of Education Trust Fund money.

The compromise also removed $10 million a year from the $30 million a year appropriated for the EFA program.

Now the program is set up to be an entitlement so if a child qualifies, even if the program is over budget, the state has to pay the grant.

The program in the current biennium — its first two years — has spent more than $20 million, so despite the $20 million cut from the appropriation, the program is likely to cost even more than the $60 million originally appropriated.

The two bills pulled from the budget will still go to the Senate and likely will pass, so the victory may be short lived.

What did the Republicans receive in return? Something they really want that Sununu vetoed last year, but will have a hard time vetoing if it is in the budget just like abortion bans, divisive concepts and EFAs were two years ago in the budget.

The provision would make it more difficult for a governor to declare a long-term state of emergency like the one Sununu declared for COVID-19.

A governor could still declare a 21-day state of emergency, but the legislature would have to approve it every 90 days and the governor could not declare more than four consecutive, 21-day emergencies without legislative approval.

And you could say the new education funding plan also took the Republicans off the hook as it would have been a prime target in the next election as Republicans doing more for the wealthy instead of those with needs.

The compromise did not touch moving up the phase-out of the interest and dividends tax one biennium, something Republicans want badly.

Like any compromise, there are things to like and things to hate and that is true for both sides of the aisle.

And no matter how the budget plan looks now, by the end of May it will look different after the Senate does its work.

But for once, the House may be holding a better hand, as it will likely need Democratic support to pass a final budget so the Senate cannot be too crazy or the legislature will need a continuing resolution to keep the government open.

Usually the Senate is the one holding the high cards during budget negotiations at the end of the session, but this year the House is.

As the adage — often repeated by the old Yankee sage Yogi Berra — goes “It’s never over until it’s over.”

Garry Rayno may be reached at garry.rayno@yahoo.com.]Distant Dome by veteran journalist Garry Rayno explores a broader perspective on the State House and state happenings for InDepthNH.org. Over his three-decade career, Rayno covered the NH State House for the New Hampshire Union Leader and Foster’s Daily Democrat. During his career, his coverage spanned the news spectrum, from local planning, school and select boards, to national issues such as electric industry deregulation and Presidential primaries. Rayno lives with his wife Carolyn in New London.

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