CONCORD — The Democratically controlled New Hampshire House on Thursday passed its version of a state budget for 2020-21 that includes $164 million in new education aid, mostly for property-poor school districts, funded by a new tax on capital gains.
The plan also includes a family and medical leave insurance program that would be funded by 0.5 percent withholding from paychecks, while eliminating cuts in business taxes scheduled to take effect for tax years 2019 and 2021.
The budget recommended by the House Finance Committee cleared the full House, 225-159, without a single Republican vote.
It’s at odds with the proposal submitted by Gov. Chris Sununu on several fronts, setting the stage for some hard bargaining and a potential impasse as the budget process winds toward the end of the current fiscal year on June 30.
The governor and fellow Republicans in House and Senate oppose the elimination of business tax cuts, the additional educational aid and the capital gains tax to pay for it. The governor also has his own plan for paid family medical leave in collaboration with Vermont.
The governor had 76 new positions at a cost of $12 million in his recommended budget, while the House budget calls for 157 new positions, mostly in health and human services, at a cost of $23 million.
Democrats claimed Sununu did not adequately fund new positions needed in the Department for Children, Youth and Families to address a statewide crisis in child protection.
Sununu uses $168 million in anticipated surplus from the current two-year budget to fund a variety of municipal projects, while the House blends that money into the next budget and revives a long-dormant revenue-sharing program that will send $12.5 million back to municipalities statewide.
“From astronomical tax increases to unsustainable spending, House Democrats created a budget that will destroy the New Hampshire Advantage,” said Sununu. “Their budget slashes local investments and creates $400 million in new taxes. I call on the Senate Finance Committee to get to work and fix this mess.”
Sununu’s reference to new taxes includes revenue that would be raised from the capital gains tax, the freeze on business tax cuts, the payroll withholding for FMLA and extension of the tobacco tax to e-cigarettes.
The Democratically controlled Senate is likely to make some changes, but nothing on the scale proposed by Sununu.
Small battles won
The governor won two small battles on Thursday, as the House approved amendments that appropriate $1.2 million to plan and design a new secure psychiatric hospital, and $500,000 to fund the Internet Crimes Against Children task force.
Sununu has been pushing for restoration of the full $26 million to build the new forensic unit on the grounds of New Hampshire Hospital in Concord. He also held a press conference in Nashua on Tuesday to criticize Democrats for their failure to fund the Crimes Against Children Task Force.
House Majority Leader Doug Ley, D-Jaffrey, said the budget addresses issues that have been kicked down the road for years, at a time when the state can afford to do so.
“This budget significantly increases public education funding, provides property tax relief for businesses and for our hard-working citizens, and addresses mental health and addiction issues, including funding for the preliminary planning and engineering studies for a new secure psychiatric unit,” he said.
“And it establishes a sustainable family and medical leave program that will keep people from losing their job when they need to be with their family.”
Both House and governor budgets total around $13 billion in state and federal sources over the two years, but the House plan spends $382 million more in state general and education funds, mostly coming from the $168 million in surplus and the estimated $150 million from the new capital gains tax.
Sports betting OK’d
The Democrats say the capital gains tax is not a new tax, but an expansion of the state’s current levy on interest and dividends to include profits from the sale of stocks, bonds or real estate (not including primary residence).
The House budget agrees with Sununu on authorizing sports betting in New Hampshire.
It also provides funding for several mental health initiatives that both Republicans and Democrats agree on, including:
• $10.5 million over the two years to implement key component of the 10-year-mental health plan;
• $2 million to build new in-patient mental health beds;
• $5 million to create a new inpatient psychiatric treatment facility for children;
• $4 million to convert the children’s unit at New Hampshire Hospital to adult beds;
• $2.5 million for 20 transitional housing units to serve people being discharged from New Hampshire Hospital to open up beds in the hospital; and
• $1 million to help hospitals cope with emergency admission mental health patients waiting in emergency rooms for admission to New Hampshire Hospital.