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House, Senate negotiators reach deal on $11.7b budget

State House Bureau

June 15. 2017 12:45AM

CONCORD — House and Senate negotiators concluded four days of bargaining on Wednesday, agreeing to an $11.7 billion two-year state budget that cuts business taxes, eliminates the electricity consumption tax and spends about $18 million less in state funds than the draft negotiators started with on Friday.

The conference committee proposal is certain to pass the state Senate, but whether spending cuts are deep enough to win the support of the most conservative House members remains to be seen.

House Speaker Shawn Jasper, R-Hudson, sounded optimistic.

“We’re very confident that we will have the votes necessary to pass this budget,” he said after the committee completed its work. The Republican majority in the House failed to pass the budget recommended by its finance committee in April.

“We are getting good feedback from Republicans, and we are reaching out to members to ensure all questions are answered. This is a thoughtful and conservative budget that is good for the state of New Hampshire, and I think the vote next week will show that we’ve met and exceeded the expectations of a majority of House members,” according to Jasper.

Rep. Jim McConnell, R-Swanzey, said the budget will still face opposition from the House Freedom Caucus, which seeks deeper spending cuts.

The revenue and spending plan is modeled largely on the proposal Gov. Chris Sununu presented in February, except for another round of business tax cuts and a $20 million state investment in expanded mental health services, both of which the governor supports.

If the committee recommendation clears the full Senate and House, and is signed into law, the Business Enterprise Tax will be lowered to 0.50 percent by 2021, while the Business Profits Tax would decrease to 7.5 percent by that time. That compares to a BPT of 8.5 percent and a BET of 0.72 percent a year ago.

Funding for full-day kindergarten, which is being addressed in a separate bill, remains unresolved, but is expected to be settled by a House-Senate conference committee on Thursday.

The idea of funding the program with new revenue from state-licensed Keno games appears to have the necessary support among House and Senate negotiators, but there is still disagreement over the amount of the per-pupil grant.

Senate President Chuck Morse, R-Salem, said the Conference Committee proposal makes substantial investments in addiction treatment, mental health and services for those with developmental disabilities, while also making the state more attractive to new investment.

It eliminates the electricity consumption tax, which amounts to about 33 cents on a $120 electric bill, and generates about $5.5 million for the state budget each year.

No new training program

Democrats criticized the plan as short-changing New Hampshire residents in need at a time when state revenues are at historic highs.

It does not include a workforce training proposal known as Granite Workforce, which would have provided training and wage subsidies for certain categories of workers.

“In a period of economic growth, when we are doing better than we have in years, we have a crying need for work force development and we deny it,” said Sen. Lou D’Allesandro, D-Manchester.

Rep. Mary Jane Wallner of Concord, ranking Democrat on the committee, criticized Republicans for including a provision in the budget banning the use of state tax dollars to fund any agency that provides abortions.

“I don’t feel they have any place in the budget, and I know for many of my Democratic colleagues, this is a very serious issue and will make them think twice about whether they can support this budget,” she said.

Work requirement

The budget also includes an amendment that requires the state to seek a waiver from federal rules regarding Medicaid so that New Hampshire can impose a work or job training requirement on newly eligible adults.

If the waiver is denied, the state will end its form of Medicaid expansion, known as the New Hampshire Health Protection Program, which has enrolled about 50,000 low-income residents since it was introduced as part of the Affordable Care Act.

The budget proposal increases the state’s alcohol and drug treatment fund from 1.7 percent of Liquor Commission revenue to 3.4 percent, but gives the governor authority to earmark money for construction and operation of a juvenile drug and alcohol rehabilitation wing at the Sununu Youth Services Center in Manchester.

“This alarming move by Committee of Conference members will have significant negative impacts on existing contracts in prevention, treatment and recovery services in New Hampshire,” said Linda Saunders Paquette, president and CEO of New Futures, one of the state’s leading recovery organizations.

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