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Garry Rayno's State House Dome: Budget plan creates winners and losers

June 22. 2013 8:16PM

The budget battle ended when House and Senate negotiators signed their agreement to spend about $10.7 billion over the next two years, of which $2.8 billion would be from state general funds.

This is the first budget plan in some time that received bipartisan support, as both political leaders in the House and Senate have said they will be voting for the compromise budget on Wednesday.

But like any budget that involves compromise, there are winners and losers.

A good example is the Department of Health and Human Services. The beleaguered mental health system will receive a $28 million boost if the plan gets final approval; the developmentally disabled wait-list for services will be eliminated; and much of the Children in Need of Services (CHINS) program will be reinstated.

However, Commissioner Nick Toumpas will have to find $7 million in reductions across his department and $9 million more to repay the federal government for misusing Medicaid dollars in 2004.

For state employees, the news is a little better than it might have been, but 200 to 350 layoffs are not pretty.

The Senate had proposed a $50 million reduction in personnel costs - which would have meant between 500 and 700 layoffs - but in the final budget, the number was reduced to $25 million.

But budget writers included $17 million in state general funds and $34 million in total funds to give state employees their first pay raise in five years. Yet the state's largest union voted last week to turn down the contract because of health insurance deductibles and changes in sick leave policy.

And then there is Gov. Maggie Hassan, who will see a budget very similar to the one she proposed in February return to her desk to sign, but it will not include $80 million in gambling licensing revenues nor a $40 million tobacco tax increase she wanted.

The Medicaid expansion she and the House backed is not in the budget, but there is a path to expansion.

There are some clear winners in this budget plan, and perhaps the biggest are the New Hampshire Community College System and the University System of New Hampshire, which combined would receive $100 million more state aid than they did last biennium.

The additional money is intended to keep tuitions at current levels, which are among the highest in the country.

And state college students will be able to reapply to the UNIQUE scholarship program, which was suspended for the last two budgets when the money was used in other places.

The second-biggest winner will be hospitals, particularly the larger ones, which will again receive state help with uncompensated care - the services they provide to people who do not pay their bills. Two years ago, lawmakers ended the program for the larger hospitals while retaining it for the small critical access hospitals.

Both the House and the Senate increased state aid to hospitals, but the Senate put $20 million of general fund money into the program, which will be matched by federal money. Under the House plan, hospitals had to pay more Medicaid Enhancement Tax to receive the federal matching funds.

The compromise used the Senate plan.

The New Hampshire State Police agency will grow with 10 new officers in the compromise budget. Also there will be money to hire civilians to free up five troopers who now do indirect law enforcement work. The increases will allow for more coverage in spotty areas, including the North Country, and a bigger presence in the southern half of the state.

Charter schools are also winners, with $3.4 million for four new charter schools and the end of a moratorium on applications.

Schools districts - about 58 including Dover - whose growth in enrollment tops 5 percent, are also winners in the new budget. The current formula for education aid allows additional money for schools whose enrollments grow up to 5 percent, but the budget raises that to 8 percent, which will provide the growing districts with about $3 million more in state aid.

Small businesses are also winners because they will be able to take business tax credits that Hassan and the House wanted delayed.

Also, conservationists will be pleased to know the new budget fully funds the Land and Community Heritage Investment Program at $8 million.

Tri-County Community Action Program will receive $1 million to help the organization back on its feet financially, along with a $250,000 no-interest line of credit.

And new Attorney General Joe Foster will not have to find $250,000 in his budget to send to towns in the Merrimack River and Connecticut River watersheds in lieu of Massachusetts' payment for lost property due to flood control areas.

Perhaps the biggest losers in the compromise budget are gaming interests that believed they had a real shot this year at finally seeing the House approve casino gambling in New Hampshire. That was not to be.

Gaming interests will have to wait until next year after a dormant gaming commission - given the money to investigate the regulatory scheme necessary for expanded gambling - makes recommendations.

Another loser in the budget is the Interstate 93 expansion project, which will run out of money early next year unless lawmakers take quick action. The 12 cent gas tax hike the House approved but the Senate killed did not rear its head during budget negotiations.

Smaller state highways will not see major improvements, nor will the number of red-listed bridges decrease.

Money for renewable energy projects was the incredible shrinking kid in the compromise budget, as lawmakers raided the renewable energy fund for $16 million to help balance the budget.

The Fish and Game Department did not receive any general fund help for rescues, which are now paid out of the money sportsmen hand over for licenses.

The needy high school robotics teams that compete in the FIRST competition will not receive any state help the next two years. Budget writers could not find the $200,000 needed to fund the program.

And finally, Merrimack residents will have to continue to pay tolls to get on or off the F.E. Everett Turnpike at the town's three exits. Senate President Peter Bragdon was unable to persuade House members to eliminate one of the tolls.

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Medicaid Expansion: Gov. Hassan and the House hung their budget negotiations on Medicaid expansion, and that did not happen.

The best they could do with the reluctant Senate was a study commission that has to report its findings by Oct. 15.

A special session is likely after the commission issues its report. Either Bragdon and House Speaker Terie Norelli will call back lawmakers, or Hassan and the Executive Council will order lawmakers to return.

Chances are Bragdon and Norelli will reach an agreement for a special session because that way they can control the rules, which won't be possible if Hassan orders lawmakers back.

So for the next four-and-a-half months, everyone, including the senators who claimed they needed more time to study the issue, will hear more than they ever wanted to know about Medicaid expansion.

But when the vote comes at the end of the study, it will most likely be for expansion.

The agreement on committee membership allows the Senate president to appoint three member and the House speaker to appoint three members. The governor, House speaker and Senate president each name one person from the general public.

What that means is Democrats will control five appointees and Republicans four.

Is there any question how that vote is going to go?

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