By PAULA TRACY, InDepthNH.org
CONCORD – The Senate voted to pass its $15.6 billion version of the budget and its trailer bill, House Bill 2 for the next two years.
It did agree to additionally increase by $5 million the package to build more moderate-income housing but rejected a plan to pay more into the pension system for 1,800 first responders who were not vested but were favored in the House.
House Bill 1-A, which passed unanimously and House Bill 2, which was divided and unanimously passed with the exception of a provision related to the sunsetting of the interest and dividends tax – is headed now to the House where differences will be hammered out, before getting to the governor’s desk.
A bill related to expanding eligibility for the Education Freedom Accounts, HB 367 which increases income eligibility for the private school program passed along partisan lines. An amendment offered by Democrats, which would add guardrails to the program was rejected by Republicans 14-10.
THE BUDGET
The Senate budget is smaller than the House’s version by about $750 million.
In February, Gov. Chris Sununu started off the biennial process by proposing a $14.9 billion budget using some of the $330 million operating surplus to pay for one-time projects. That revenue forecast is now at $500 million.
The budget process should be over in a matter of weeks as a July 1 deadline looms but Wednesday’s action was an important milestone in the process which occurs every two years.
Sen. James P. Gray, R-Rochester, chair of the Senate Finance Committee, said the budget does not raise taxes “which will keep our state’s economy growing.”
He said it sends over $240 million to local communities and focuses spending on the most needy in the state. It also gives state employees a 10 percent raise in July and another 2 percent next July at a time when their ranks are thinning.
The state has an employee vacancy rate of about 20 percent and some hope that will improve with better wages to offer. The cost of the wage enhancements is about $100 million for the biennium.
Sen. Donna Soucy, D-Manchester, thanked her colleagues on both sides of the aisle for support of House Bill 1-A and said, “I hope we can all work together,” on differences between the Democratic minority and the Senate Republican majority of 14-10.
That set up a rather long day with proposed amendments being offered on everything from taxes to mobile home parks.
The Senate budget has four key areas of difference from the House:
– Food assistance for schools
– Medicaid expansion
– Funding for the Education Freedom Accounts
– Contributions to the New Hampshire Retirement System.
An analysis of those differences was published here and is available https://indepthnh.org/2023/06/07/senate-finance-committee-budget-shifts-spending-changes-education-funding-formula-relative-to-house-budget/
Many of the priorities of the governor’s budget are included in both House and Senate proposals which include a focus on no new taxes, helping the housing needs of the state, mental health care, the opioid crisis, addressing education and health care needs, and in child care.
Sen. Dan Innis, R-Bradford told the Senate they have crafted a good budget that still protects youth, elderly, and funding for schools investing in the future while spending millions less than the House.
“Low taxes are the result of low spending,” he said noting the Finance Committee over six weeks, trimmed $700 million from the House version.
While state revenues are better than expected “we need to be careful” with a potential slowdown in the economy and a potential spike in energy costs.
The Senate version supports the rainy day fund and addressing housing needs, he added.
It includes now $50 million in new state housing initiatives, $35 million to the state housing fund, and money for INVEST NH, the governor’s measure to invest and incentivizes municipalities to build more low- to moderate-income housing.
Sen. Regina Birdsell, R-Hampstead, noted increased funding for Medicaid, to the tune of about $134 million should help make the state competitive with neighboring states, attract frontline health-care workers, add $400,000 more in pay for LNAs and more for recovery-friendly workplace initiatives, and provides $16 million more for family resource infrastructure.
There is $66.9 million in early childhood, and mental health funding, and extends the expanded Medicaid provisions for seven years, but does not allow it to go on in perpetuity, as had been a Senate goal. The House only wanted to extend it for two years but agreed to seven.
Sen. Tim Lang, R-Sanbornton, worked on the education funding aspect of the budget and said this will provide more money to target the neediest schools.
No community, he said, receives less than they did in the current budget.
Manchester, for example, with some of the highest percentage rates for free and reduced lunches in schools, will see that metric used to enhance school funding going up in the first year from $110.5 million to $139 million and over the biennium a 28 percent increase.
For seniors, Sen. William Gannon, R-Sandown, cried out “BINGO.”
“You won” for seniors, he said.
The budget helps the elderly stay home where they want to be by allowing for more funding for their caregivers. It increases Medicaid reimbursement rates which provides choices for independent living.
“This is a win for the seniors of New Hampshire,” Gannon said.
Soucy, the Democratic minority leader, said there was an extraordinary amount of work to get to agreements, and while not everyone is happy with everything, no one could draft a budget to please all 24 Senators.
“But each one of us is here. In the end, I think we are all working together to get to ‘yes.'”
The two bills passed, the first HB 1-A by a voice vote.
At the end of the day, Soucy said for the collective good, she was going to vote for the budget and keep working on the issues and believe in the ability to work together.
RETIREMENT ENHANCEMENTS REJECTED
The Republicans voted against a proposal 10-14 offered by Soucy which would have added $25 million a year to help about 1,800 first responders’ retirement.
Soucy said this is about retention.
The House passed $50 million to address the issues of first responders who were not vested in the pension plan but were placed in the transition period.
She said these workers, in the system for 10 years or more, are calling the retirement system to potentially retire.
“They are making the decision that maybe, in the end, this isn’t all worth it,” for their families, Soucy said.
“We need to keep them,” she said.
She offered an amendment that would have funded the gap by $25 million a year from communications services taxes placing no impact on the rates in this biennium.
Senate President Jeb Bradley, R-Wolfeboro, said he could not support the amendment but is willing to work on it still and noted like Medicaid expansion, it was very controversial and took time but “I don’t think we can figure it out tonight…in a way that is fair and affordable.”
He said there were unknowns on how Soucy’s amendment will impact municipalities’ bottom line.
$5 MILLION MORE FOR AFFORDABLE HOUSING
By a voice vote, the Senate increased its budget for affordable housing initiatives by $5 million noting the overall housing package is for $50 million.
Sen. Rebecca Perkins-Kwoka, D-Portsmouth, rose in support of the amendment and thanked Bradley for his work on the housing package.
Housing is a top priority and this will set up a partnership with municipalities, he said.
AMENDMENTS REJECTED
The Senate took the majority of the day on a lot of amendments to HB 2 offered mostly by Democrats, which failed.
Bradley left the gavel and took his seat on the floor to oppose amendments and gave the role of president for the day to Senator Gray.
McAULIFFE STATUE
A measure to reduce funds for a statue to honor the late Christa McAuliffe was killed.
McAuliffe was a Concord teacher who died in 1986 during the explosion of the Space Shuttle Challenger. A committee has been formed to create a statue in her honor on the State House grounds.
Sen. Lou D’Allesandro, D-Manchester, offered an amendment to reduce by $300,000 the amount from $500,000 arguing the private sector should be able to give and be a part of the statue.
Sen. Becky Whitley, D-Hopkinton rose to oppose that. She said McAuliffe was a beloved teacher from Concord High School and a role model.
She said she was a young child watching in McAuliffe’s classroom and remembered what it felt like that day to see the Challenger explode.
This will be the first statue of a woman on the State House lawn, she noted.
Whitley is on the commission working the idea and said it felt this should be paid for by all citizens.
Bradley agreed with Whitley. He said nothing precludes donations and it would take time away from the project to raise the funds. It failed 1-23.
TEXTBOOK ON CIVICS
D’Allesandro offered the elimination of a $1 million line item for a new civics textbook, which was favored by the governor in his budget. It failed on a standing vote of 10-14.
The Manchester Democrat taught civics at the high school level and said he had many successful students go on to help lead New Hampshire.
“Do we need another textbook? I don’t think so,” he said.
Bradley rose in opposition to the amendment noting that too few students are proficient in civics.
“It has to come into the digital age,” he said.
REDUCE $7M FOR STATE PRISON REJECTED
D’Allesandro also offered an amendment to reduce by $7 million the $10 million amount to help build a new state prison. It failed on a voice vote.
He said the state needs a new prison and, “I don’t think we need $10 million to study it.”
Bradley countered that this is going to be a huge expenditure when it passes.
Commissioner of Administrative Services Charlie Arlinghaus told him the $10 million is possibly too low.
The Senate meets again Thursday at noon.