By GARRY RAYNO, InDepthNH.org

CONCORD — After two hours of discussion about revenues Tuesday, the House Ways and Means Committee decided to unofficially up its revenue estimates for the next biennium by $20 million all coming from the Lottery Commission.

The Senate Ways and Means revenue estimates for the next biennium are currently $228.1 million more than the House estimates determined back in February which totaled $5.9 billion for the biennium.

The committee’s suggestion to increase the estimates by $20 million will be important when the House and Senate budget writers sit down at a conference committee on the budget package in June as reflective of the House’s position.

The biggest difference between the two ways and means committees was business taxes, which the Senate panel believes will be $123 million more than the House’s, but there was little appetite among the House members Tuesday to change their more conservative numbers anywhere else.

Several Republicans suggested the economy would be booming in the second year of the next biennium.

Rep. Cyril Aures, R-Chichester, said he is bullish on the economy and expects the state will see an increase in the business profits tax in fiscal 2027.

“Trump is a New Yorker and you have to understand his mindset,” Aures said. “He would rather slap you in the head to get your attention than be nice.”
He said Trump’s tariffs nearly crushed the Chinese economy.

“I am very positive about what we are going to see from all of this (which) is continued growth in the stock market and the economy,” Aures said.

But Rep. Terry Spahr, D-Hanover, wondered if Aures saw that Moody’s, the credit rating firm, downgraded the country’s rating and that the country is now trending more toward a recession than before.

Rep. Susan Elberger, D-Nashua, said she is a native New Yorker and what Trump is doing is trying this and that and seeing what sticks to the wall.

She said she is less confident in the economy and what the ripple effect will be here.

Several members pushed Department of Revenue Administration Commissioner Lindsey Stepp about her lower recommendations for business tax revenue to the Senate than to the House.

She said this is a very difficult time to have much confidence in what will happen but noted that the last few fiscal years produced some significant increases in business tax revenues that do not follow the normal trend of about a five percent increase year to year.

Stepp said what happened the last fiscal year is a “right-sizing” of payments from businesses after several years of significant growth.

During the last fiscal year, the only month business taxes were above the prior year was March, she said, and she saw that as an inflection point, but April business taxes were 12 percent below the prior year.

Stepp said that does not mean the downward trend is going to continue indefinitely but that revenues are returning to their normal model and growth will be lower than it was.

The other big change between the House and the Senate is over Lottery Commission revenues which have been increasing since the governor presented her budget in February.

The House forecast for Lottery revenues is $172.9 million each of the next two fiscal years based on returns from a new charity casino in Nashua.

A bill before the legislature would allow what is now historic horse racing on machines similar to slot machines, to be converted to slot machines which is anticipated to produce more revenue for the state, charities and casino operators, but official revenue forecasts can only include what is in law when they are made.

The Senate had additional information about the returns from the new casino and decided to up the revenue forecasts for the next two fiscal years to $220.3 million each year, a $47.4 million difference each year.

Some of the House committee members were reluctant to agree to that kind of increase saying the state is approaching the saturation point with charity gaming facilities in every area of the state and they expect a drop off after the initial surge from the new casino in Nashua.

The committee was told while the historic horse racing revenues are largely responsible for the increases, traditional lottery games such as sweepstakes and scratch tickets are down about 10 percent from a year ago.

Rep. Thomas Southworth, D-Dover, suggested the committee increase Lottery revenues by $10 million each fiscal year and leave the rest of their estimates where they are.

After a wide ranging discussion among committee members, most agreed that was what the committee should do and not change any other projections from what they approved in February.

The Senate is still working on its version of the budget, but last week added about $153.1 million of its newfound revenue back into the budget, addressing the three biggest issues raised at a public hearing on the budget earlier this month: a 3 percent cut in Medicaid reimbursement rates to healthcare providers and cuts to developmentally disabled and mental health services.

Since that time, the committee has been going through the budget agency by agency, but has not made that significant a change anywhere else in the budget.

The Senate budget writers still have to address significant cuts to the Corrections Department and Attorney General’s Office made in the House budget and a $50 million reduction to state aid for the University System of New Hampshire.

The committee is meeting every day this week hoping to wrap up work before the end of the month.

Garry Rayno may be reached at garry.rayno@yahoo.com.