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Wrangling continues over $11.35b state budget

State House Bureau

June 30. 2015 9:32PM

CONCORD — The partisan budget battle between Republican legislators and Gov. Maggie Hassan continued Tuesday with no quick resolution in sight.

GOP Senate budget writers took issue with Hassan’s statement the legislators’ approved $11.35 billion budget she vetoed was unbalanced, makes promises it cannot keep and is irresponsible.

“The governor’s claims that the budget she vetoed is unbalanced and dishonest continue to be unfounded, misleading, and hurtful to the people of New Hampshire,” said Senate Finance Chairman Jeanie Forrester, R-Meredith. “I stand by this proposal as a solid foundation that is good for the people and businesses in the State of New Hampshire.”

The Republican senator on the committee focused on a potential $78 million Medicaid shortfall in the Health and Human Services Department.

The shortfall, expected to be about $35 million once end-of-the year adjustments are made, would reduce the estimated $49 million surplus budget writers used to help balance the new biennium budget.

Legislative budget officials said HHS requested $39 million two years ago to cover a potential shortfall and another $20 million for this upcoming biennium, but the money was not included in the governor’s proposed budget nor in the House and Senate plans.

“If the department knew there was a problem,” said Forrester, “they should have come forward.”

Department officials and Hassan had warned budget writers about a year ago the agency was facing a significant shortfall due to an increase in Medicaid caseloads not associated with the Medicaid expansion program.

The agency made about $50 million in budget adjustments to make up for the shortfall and presented the plan to the Joint Legislative Fiscal Committee last year.

Because of the governor’s budget veto, starting July 1 state government operates under a continuing resolution that allows agencies to spend at 2015 fiscal year levels. The House and Senate have yet to schedule sessions to attempt to override her veto.

On Tuesday, Republican members of the Senate Finance Committee said there is little to do until accountants determine how much agencies spent in the 2015 fiscal year, which ended yesterday. Those figures are not available until Sept. 30, when spending is adjusted between the fiscal 2015 and 2016 years.

“Without knowing (the adjusted figures,)” said Senate President Chuck Morse, “I don’t know how we can go back and rebalance this budget.”

In a letter to the committee, Hassan focused on differences over business tax rate cuts, saying she is willing to compromise but the lost revenue has to be replaced or future budgets will not meet the state’s needs.

“… The state is on track to meet lapse targets and finish fiscal year 2015 in the black,” Hassan wrote. She noted she took a number of steps to address what looked like a revenue shortfall, including freezing hiring, equipment purchases and out-of-state travel.

“(The steps were necessary) to ensure that our current budget is balanced and that lapse targets are met in light of increasing Medicaid costs because of rising caseloads — primarily an increase in children receiving traditional Medicaid as a result of changes in federal law,” Hassan wrote, and urged legislative leaders to return to the negotiating table immediately, noting the longer the state operates under the continuing resolution the more difficult it will be for managing state agency spending.

The Department of Revenue Administration has warned cities and towns it will be difficult to set tax rates this fall without knowing such things as state education adequacy aid or revenue sharing. The departments of safety and transportation will exhaust highway funds if there is no settlement before the six-month window under the resolution.

No future committee meetings were scheduled.

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