New Hampshire Democrats say it cuts too much, while members of the House Freedom Caucus complain it’s still full of fat.
But House Republican leadership is hoping their 220-member majority will give them the numbers they need to advance their $16.27 billion budget late this week.
If Tuesday’s marathon budget briefing was a harbinger of things to come, rank-and-file lawmakers should steel themselves for a floor fight on Thursday.
The winds of the current House spending battle began blowing in February shortly after GOP Gov. Kelly Ayotte released her first-ever state budget proposal with its $16.7 billion price tag. A House Ways and Means report said Ayotte’s anticipated two-year revenue projections are overshooting the mark by $527 million.
“We have to find $770 million of both cuts and increases to balance (the budget); that was our task, and we had six weeks to do it,” an exasperated Rep. Dan McGuire (R-Epsom), vice chairman of the House Finance Committee, said during Tuesday’s briefing.
McGuire was responding to a complaint from Rep. Wendy Thomas (D-Merrimack) of the House GOP’s plan to use money from a ratepayer-based dedicated renewable energy fund to help cover deficits in the state’s general fund.
“This is a dedicated fund, and you have essentially stolen that money,” Thomas said.
“That’s your opinion,” McGuire fired back, before asking Thomas if she had an actual question.
“I guess my question is, ‘How do you sleep at night, gutting New Hampshire’s energy future?’” Thomas asked.
In 2023, Thomas was one of 181 Democrats who voted for a bill to take $40 million in energy rebates away from ratepayers and let the state spend it on green energy programs.
The exchange was one of several uncomfortable moments for McGuire and Finance Committee Chair Ken Weyler (R-Kingston), who were also grilled by fellow Republicans.
After McGuire walked lawmakers through a plan to eliminate several boards and organizations, including the Board of Tax and Land Appeals, the Housing Appeals Court, and the Human Rights Commission, Rep. Dave Walker (R-Rochester) asked what the avenue will be for “taxpayers who want to appeal their assessments.”
McGuire pointed to the state’s network of superior courts. According to Finance Committee documents, business, commercial, and land-use cases will all merge together under the umbrella of a “new commercial court docket.”
“Well, you just downshifted the whole cost of that to the taxpayer,” Walker shot back, adding that the new process will force property owners to hire a lawyer.
“The problem is people are intimidated by going to court, so they can’t appeal. It’s an injustice, if we keep having these disagreements you’re going to lose more and more votes,” Walker said.
For Republican leadership, losing members like Walker, who serves on the Rochester City Council and spent several years in the mayor’s office, may indeed cost them the vote Thursday. Failing to gain enough support from the House Freedom Caucus, which issued a press release last week expressing concerns about declining revenue projections, could also hurt their chances.
Greg Moore of Americans for Prosperity-New Hampshire told NHJournal that despite Tuesday’s hand-wringing, the budget that passes on Thursday, assuming it does, is “far from a finished project.”
“The House often has the toughest task in its phase, since they get the least time with the budget,” Moore said, referencing the six-week timetable. “The governor gets agency presentations in November, and doesn’t have to submit a budget until mid-February.”
Moore noted the first two weeks of the House budget review don’t even include the governor’s actual language, which does not get released until the end of February.
“That leaves them really only one month to make their changes, while the Senate gets twice that time and the governor three times the time,” said Moore. “That means that the House budget is often rough, and this year’s is no exception, especially when you’re dealing with a first-term governor.
“I suspect a good deal of the concerns that some members are raising will be addressed in the Senate. That’s how this process works.”
Weyler, meanwhile, said the Finance Committee’s budget is based on “many small cuts from hundreds of different places.”
On declining business tax revenue, Weyler acknowledged it “hasn’t been going quite as well as we thought.”
“We hope that’s a trend that will not continue,” he added.
Weyler touted the fact that this is the first budget of the state’s truly income-tax-free era now that the interest and dividends income tax has been phased out.
Democrats blame the budget cuts in part on the loss of the interest and dividend tax revenues, as well as what they call “irresponsible” cuts to the state’s business taxes over the past decade.
Republicans respond by pointing out that revenues from business taxes have more than doubled since the tax cuts began and that they make up a larger share of the state’s overall tax revenue, too.
Still, after years of generous revenue flows — and increased spending — the state has a revenue problem. The House GOPs solution is to increase fees rather than raise taxes. Weyler defended that approach.
“We looked at what it costs to register a car,” Weyler said. “We asked about the last time car registration fees went up.” He said staffers looked at rates over the past 25 years and could not find any notable increases.
“They’re going to go up quite a bit, but because they haven’t gone up in 25 years, that’s to be expected,” Weyler added.
Another budget cut that has resulted in outrage from Democrats is a proposal to cut $52 million in payments to Medicaid providers over the next two years. They also voiced disapproval over a plan to eliminate the state’s Commission on Aging, which the Finance Committee expects will save nearly $600,000 over the next two years.
“That’s somewhat of an internal lobbying group,” McGuire said. “But there’s plenty of outside people that represent the interests of the elderly who come and testify and do work for them. We thought that’s nice to have rather than a necessary board.”
Rep. Linda Haskins (D-Exeter) called the proposal “unwise” and pointed to New Hampshire’s ranking as a state with one of the oldest populations in the U.S.
“This budget, not only will it not satisfy everyone, I think it will not satisfy anyone, because that’s impossible,” McGuire said. “We have to fund things that are absolutely necessary and there are other things like this that are nice to have, but they are not absolutely necessary. It’s as simple as that.”
The real purpose of the budget document isn’t to finalize the revenue and spending, Moore said. Instead, “it’s a critical piece for the House to have leverage” when debating the final budget in conference with the Senate.
“As we saw in 2017, the House had almost no leverage when they failed to pass a budget,” he said. “So, it’s an important step to getting the best finished product, from the House’s perspective.”
Other notable proposed budget cuts and fee increases include:
- Discontinuing the next two years of Paid Family Medical Leave state-sponsored advertisement, resulting in a projected $1.4 million in savings.
- Abolishing the Office of the Child Advocate, resulting in general fund savings of $2.2 million over the next two years.
- Abolishing several unfilled positions at the Secretary of State’s office, resulting in general fund savings of $465,000 over the next two years.
- Eliminating Liquor Commission enforcement positions.
- Removing the direct dedication of liquor funds to the Granite Advantage Program and the Governor’s Commission on Alcohol and Drug Abuse Prevention, Treatment, and Recovery, to allow deposit into the general fund.
- Eliminating 150 positions at the state Department of Corrections, reducing general fund appropriations by $34 million over the next two years “for salaries and benefits to align with current prisoner counts.”
- Eliminating the Department of Natural and Cultural Resources’ Division of the Arts, resulting in savings of “an estimated $3.8 million in general and federal funds” over the next two years.
- Increasing the cost of a vanity license plate from $20 to $60, which is expected to “increase revenue to the general fund by an estimated $6.2 million” over the next two years.
- Increasing overall car and truck fees “to generate an estimated $45.0 million over the biennium in revenue, enabling the highway fund to balance without the need for general fund support.”
- Defunding the Prescription Drug Affordability Board, “while saving $2.5 million across multiple agencies via biologics and negotiated drug pricing.”
