Will the New Hampshire House pass a budget this week? After last week’s kerfuffle between House caucus leaders, GOP insiders say they aren’t sure.

“We will pass a budget, I guarantee it,” a GOP House insider told NHJournal.

“I’ve already made my bet: No House budget,” a state Senate source said.

House Majority Leader Jason Osborne took aim at Democratic leader Matt Wilhelm last week after a GOP-proposed budget that would spend nearly a billion dollars more than the last biennium received just one Democratic vote.

“It appears as if you never had any intention to work towards compromise,” the Auburn Republican wrote in a letter to Wilhelm, a Manchester Democrat. Osborne charged Wilhelm “would rather play political games with the future of our state and its people.”

Among the concessions:

  • reductions in spending on Education Freedom Accounts;
  • increased Medicaid provider rates;
  • increased public education funding for property-poor communities;
  • and increased spending for the affordable housing fund and the InvestNH program.

Peterborough’s Peter Leishman was the sole Democratic “yes” as the House Finance Committee voted to send the almost $16 billion two-year spending plan to the floor for a vote on Thursday. The plan, as approved, increases spending by 18 percent over the 2022-2023 budget and adds more than $84 million on top of the budget submitted by Gov. Chris Sununu in February.

“You are bearing witness to the extremist Democrats’ insatiable lust for spending other people’s money as they bitterly cling to the last remaining vestige of New Hampshire’s income tax,” Osborne told NHJournal.

Rep. Joe Sweeney (R-Salem) supported the plan, declaring there is “a lot for everyone to love.” But both conservative Republicans and progressive Democrats are signaling there’s too much to hate.

“Eight hundred dollars in new spending per Granite Stater for the same level of service? Doesn’t sound like a Republican budget to me,” JR Hoell, a fourth-term Dunbarton Republican and House Finance Committee member told NHJournal. Hoell was pulled from the committee for the bill’s final committee approval. Replacing him was Deputy Majority Leader Fred Doucette (R-Salem), who supported the budget.

In response to Osborne, Wilhelm sent his own letter outlining his demands for an agreement to be made.

“I remain open and willing to engage in direct dialogue to reach bipartisan consensus,” Wilhelm wrote, but quipped that Osborne’s letter was appreciated as “repeated requests for a written proposal from your team during our negotiations never materialized.”

Policy Differences Remain

At issue for Wilhelm’s Democratic Party are Medicaid Expansion, Education Freedom Account’ guardrails’, and repealing the state’s income tax – the interest and dividends tax.

House Bill 2, as approved by the Finance Committee, speeds up the I and D tax repeal – ending it for tax periods starting January 1, 2025. Wilhelm wants the phase-out kicked to 2026.

An experienced State House operative tells NHJournal that moving the date to 2026 would give a theoretical Democrat majority time to undo the repeal entirely in the next biennium.

Wilhelm also balked at Republican claims that reducing Education Freedom Account spending would do anything at all. “Because the voucher program is an “open warrant,” reducing the budget line will not result in any protections for taxpayers.

“Without the important guardrail of HB 430, which limits future EFA applicants to public school or first-year students, the voucher program remains likely to grow very rapidly.”

House Republicans inserted a two-year sunset provision for Medicaid Expansion – competing with the state Senate’s proposal to make the program permanent – putting Osborne at odds with both Wilhelm and Senate President Jeb Bradley.

The fiscally conservative Americans for Prosperity opposed the Senate’s version earlier this month. “This regressive policy works to keep people in poverty instead of lifting them out of – it is the opposite of the Live Free or Die way of life,” state director Greg Moore said at the time.

Budget Woes Continue

Arguably New Hampshire’s only “must-pass” legislation, House Bills 1 and 2, have a storied history of failure, near failure, and vetoes in recent years.

The 2015 Republican budget was vetoed by then-Gov. Maggie Hassan, who opposed the business tax cuts it included. Her veto was overridden with help from Democratic members at her behest.

The budget crafted by the House under Speaker Shawn Jasper (R-Hudson) during Gov. Chris Sununu’s first term in 2017 failed to pass the House due to opposition from Freedom Caucus members organized by Hoell.

If Hoell remains opposed come next Thursday, he will have an easier time finding the votes to block it.

Republicans have a paper majority, 201 members, to Democrats’ 196 (Rep. Josh Adjutant, D-Enfield, resigned over the weekend after suffering a workplace injury.) Recent session days have seen more ties than many members can recall ever happening, and at times Democrats have held an attendance majority.

Even with full attendance, Speaker Sherm Packard (R-Londonderry) is at risk of a 2017 repeat.

Gov. Chris Sununu vetoed the 2019 spending plan crafted by Democrats in his second term and wasn’t ironed out until September when a compromise was reached in new bills, House Bills 3 and 4.

In 2021, Republicans held a 213-187 majority — described at the time as “extremely narrow” — and the Committee of Conference report was in doubt right up to the last minute. Despite some Republican opposition over Sununu’s Family Medical Leave Insurance plan, the budget passed 198-181.

Four of the nine Republicans who voted no remain in the House: Reps Glenn Bailey (Milton), Barbara Comtois (Barnstead), Louise Andrus (Andover), and Dave Testerman (Franklin).

Anyone’s Game

With a week to go and negotiations ongoing, the bill approved by the Finance Committee is far from complete. If the bill fails as it did in 2017, the Senate will have to start over by taking over separate House bills already in their possession.

Sources close to the Senate say they’re prepared to do just that.

Whether in House Bills 1 and 2 or other bills, the House will eventually have to approve the biennial plan again during Committee of Conference week at the end of June. Speaker Sherm Packard and Osborne’s ability to navigate a narrow majority will be tested if a spending plan is to become law this year.