By PAULA TRACY, InDepthNH.org

CONCORD – With only a few days left before the Senate Finance Committee needs to pull together its own two-year budget, there appears to be some good news and differences from the House’s version while big ticket items remain to be debated.

While budget requests for the University Systems of New Hampshire at $85 million and funds for the Group II retirement account at $27.5 million a year remain on hold without a recommendation, some progress has been made this week on arts funding, the YDC settlement fund, and there may be some restoration of things like family planning funds and the state Human Resources Commission, childcare workforce help and more.

A key reason for some to be optimistic is revenue projections continue to look better than when the House passed its budget earlier this spring.

The $15-plus billion general fund budget in the House was well below the governor’s budget and cut many services.

The public came out in force against a number of those cuts and the Senate committee immediately voted to restore funds for the developmentally disabled, community mental health services and the 3 percent cut in Medicaid provider rates.

But that left little wiggle room for many requests for restoration of funds to the governor’s budget levels.

Sen. Tim Lang, R-Sanbornton, who chairs the Senate Ways and Means Committee and is a member of the Senate Finance Committee, said Wednesday he met with Lindsey Stepp, commissioner of the Department of Revenue Administration to have her review the data again and said he was told there could be three lines of revenue to be revised upward to total $107.8 million for the biennium.

Sen. Cindy Rosenwald, D-Nashua, also said she met with Stepp but had more conservative numbers totalling $32.5 million more, but this at least gives the Senate more wiggle room to get to budgets closer to that of the Gov. Kelly Ayotte.

“It is the median. We are still below the governor,” but Lang said half way between that of the House and the governor.

“Again it allows for some prioritization,” and restoration in some cases for funding for Health and Human Services, the courts and others.

He anticipates the first half of the fiscal year 2026 may be a bit rough but expects tax revenues to rise with an improved economy in the second half of that year and in 2027.

He said business taxes could increase by $25 million for fiscal year 2026 and $50 million for 2027 to total $75 million; rooms and meals revenues are expected to go up $27.8 in the biennium and the real estate transfer tax could see $5 million more over the biennium. 

He said another thing easing is a delay in the Elderly Tax Credit reimbursement to municipalities from charitable gaming for the first biennium of this new program. It totals $20 million more to the general fund. 

“It is to give time for the DRA to stand up the program and establish the rules,” he said. “The changes between lowering the tax and eliminating the $50 bet limit on all gaming will have a net zero impact and put us in better competition with neighboring Massachusetts,” thus encouraging more to come to the Granite State to play at new and renovated casinos along the border, he said in an interview following Wednesday’s Senate Finance meeting.

The way it is going to work in the next two days, he said is that Thursday the committee will have new  revenue numbers before it and will work on voting on what’s left in the “on hold” list of amendments to the House budget.

“By Friday we have to be done. All amendments will be voted on. The following Monday we will come back and take one more vote on every amendment. And once that is done, all are sent to the Office of Legislative Services for one giant budget amendment,” he said.

That will then be voted on by the full Senate before returning to the House.

If they cannot come to an agreement between the budgets there could be a continuing budget resolution and that could drag on.

The hope is that that does not occur making for a long summer for legislative budget writers.

ARTS ALIVE, MAYBE

The House voted to eliminate the NH Council on the Arts which would make this the only state in the nation which does not support the arts.

Last Wednesday, the Senate Finance Committee voted to fund it with $1 with Lang saying it was a placeholder to allow for private investment.

Today, he offered an amendment which would restore the arts and create a new fund within the Division called the Granite Patron of the Arts Fund.

It would allow for donations to be received as well as create a new tax credit, allowing up to $700,000 per year to be made in donations in which taxpayers could receive up to $350,000 in tax credits against the Business Profits Tax.

The committee took no vote on the matter on Wednesday but it remains on hold for discussion.

Also up for consideration is an amendment offered by Sen. Dan Innis, R-Bradford, and Sen. Dave Rochefort, R-Littleton, which would give the arts $1,250,000 over the biennium, allowing for a federal match which would total $2,046,388 for the biennium in federal funds.

There is also an amendment on the table from Sen. Sharon Carson, R-Londonderry, and the Senate President, and Lang would allow for $300,000 in general fund dollars for the arts over the biennium and the same federal match totalling $2,046,388.

COURTS 

One possible change could be that the state might not close courts in Hooksett and Goffstown at the request of Sen. Howard Pearl, R-Loudon who said he is hearing from law enforcement that it would create a travel and logistical burden to close the Hooksett court.

That would mean the state would not save $650,000.

But the Senate Finance Committee voted to recommend restoration of the funding on Tuesday.

YDC SETTLEMENT 

It also approved an amended recommendation to use the proceeds of the sale of the Sununu Youth Services Center to fund the Youth Development Center Settlement fund. That is estimated at $80 million.

There was a discussion Wednesday but no vote on whether making that available to the fund might convince some of the 1,300 victims and claimants to not use the fund and go to court instead, while funding only $20 million from general fund during the biennium and thus relieving some financial pressure on the budget.

The state plans to close the Manchester facility and create a campus environment at Hampstead where the state has recently opened its youth mental health hospital.

The land in Manchester is thought to be quite valuable and in a desirable neighborhood for new housing.

It would also become taxable for the city.

HOUSING CHAMPIONS

Despite the efforts of the minority Democrats on the committee, they voted 6-2 to recommend removal from the budget of $5 million for the Housing Champion Designation and Grant Program Fund to support development of new homes.

Sen. Cindy Rosenwald, D-Nashua, said it has been a successful program to date and Sen. David Watters, D-Dover, asked the committee to “pick a number” if $5 million was too much calling it one of the best tools the state has to incentivize development of affordable housing.

But Republicans, like Lang said there are policy initiatives which have passed and don’t cost to help aid the housing crisis.

The clock is ticking and there are a lot of decisions which are still up in the air and a lot of work still ahead for the Senate and the Legislative Budget Assistant’s office which got kudos from Senators for working long, hard hours and even on the holiday weekend to help get the state to a new budget.

By law, the state needs to have a balanced budget, meaning that allocations must meet the projected income.