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Alcohol Fund Becomes Latest Political Battle for N.H. Lawmakers During Budget Process

When it comes to the opioid crisis, one would expect every state dollar allocated to the epidemic would be spent. That’s apparently not exactly what happened this fiscal year. A substantial surplus remains in the Alcohol Abuse Prevention and Treatment Fund, also known as the Alcohol Fund, and lawmakers are trying to pin the blame on almost everyone.

The Alcohol Fund was created in 2000 by the Legislature as a mechanism that takes 5 percent of the gross profits from the sale of alcohol to support education, prevention, treatment, and recovery programs for substance abuse, which encompasses alcohol and drug abuse.

The focus right now for the Governor’s Commission on Alcohol Drug Abuse Prevention, Treatment, and Recovery, which gives out the funds, is the opioid crisis, but alcohol abuse is also part of its mission. The commission was allocated approximately $9 million in the 2017 fiscal year and will reportedly end the year on June 30 $2 million to $4 million in the black.

Tym Rourke, chair of the governor’s commission, said he is working with the Department of Health and Human Services to determine the exact amount and will release those figures this week.

That’s where the confusion lies for legislators as they finalize the state’s biennium budget this month. DHHS Commissioner Jeffrey Meyers has said he anticipates a $2 million surplus from contracts that didn’t use their full funds. The nonpartisan Legislative Budget Assistant is putting the number at $4.3 million. The discrepancy and uncertainty as to why the funds weren’t all used during the year was on full display during the Senate marathon budget session on Wednesday.

Sen. Martha Hennessey, D-Hanover, who also sits on the governor’s commission, questioned why there was an amendment introduced that would allocate $2 million from the Alcohol Fund for the construction of a juvenile substance abuse wing at the Sununu Youth Services Center in Manchester without the commission’s approval.

Senate Majority Leader Jeb Bradley, R-Wolfeboro, said they had to have “some frank talk” about the Alcohol Fund.

“It is pathetic that there is $4.3 million sitting in an account unexpended in the middle of a heroin crisis. That’s what we should be focused on. That’s outrageous,” he said. “So let’s look at the reforms this amendment tries to put in place … that’s called taking action, not sitting on $4.3 million.”

Hennessey countered to say that the fund would only have a $2 million surplus, but said Gov. Chris Sununu and Meyers should also be to blame.

“The governor and commissioner at HHS have not helped to facilitate the spending of this,” she said. “They are waiting to find out what kind of health care we’re going to have, what’s going on with Medicaid, all of which is up in the air. So if our governor and HHS aren’t helping to make this possible, that money can’t be spent.”

The Alcohol Fund fund has only been fully financed one time since its inception, which was in the 2003-2004 biennium — the first year it began. Since then, governors or the Legislature transferred the revenue to the general fund and would only appropriate a small amount to the Alcohol Fund. In the current biennium passed under former Democratic Gov. Maggie Hassan, the fund was financed at 1.7 percent. In Sununu’s budget proposal and in the Senate’s budget, the fund was doubled to 3.4 percent.

Rourke applauded the Senate for increased monies to the fund, but reminded lawmakers that the Alcohol Fund is non-lapsing and any money left over is rolled over to the next fiscal year, so the commission could “repurpose and redeploy those dollars.”

Rourke said he had concerns about another amendment introduced in the Senate budget that would give the DHHS commissioner the ability to take money out of the Alcohol Fund itself and not from the potential surplus.

“The [governor’s] commission has a statutory authority over the fund and DHHS administers it, based on priorities set by the Commission” he told NH Journal. “The main concern is the precedent it would give for a commissioner to take money from the Alcohol Fund, without approval of the spending plan by the Commission.”

He said the 3.4 percent funding for the next biennium is mostly going to be used to sustain ongoing investments and state contracts to combat the opioid crisis. If the commissioner can take funds at anytime, Rourke is concerned that they would have to cancel contracts and put funding for other programs at risk.

So why is there a surplus in the first place? Rourke attributes it to two factors: Medicaid and workforce issues.

When the Legislature voted to renew Medicaid expansion in 2016, treatment and recovery centers were not clear if people who showed up would be covered by private or public insurance. The commission wanted to keep the funds available to those centers in case they needed to cover their insurance costs. Rourke said contractors ultimately didn’t need to draw on those funds.

He also said the workforce crisis in the mental health system resulted in funds not being used by contractors.

“We have treatment contractors who may have been given funding and have had a difficult time hiring appropriate staff,” he said. “Obviously, you’re not drawing on that salary while you’re waiting for that hire. If you talk to providers, there is that pressure on them on hiring and maintaining staff.”

The Senate budget is likely to go to a conference committee with the House, where lawmakers from both chambers will go over the details before voting on the final spending plan. The House previously stripped money for the Alcohol Fund in its version of the budget, so Rourke said he will continue to work with lawmakers on ensuring the funds are kept in place.

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House Finance Committee Takes Ax to Gov. Sununu’s Budget Proposal

With about $59 million less to spend than expected, it’s natural that the House Finance Committee would trim a few items from Gov. Chris Sununu’s budget proposal. Yet, the cuts they’re making are concerning advocates who championed Sununu for including them in the first place.

On Wednesday, Republican budget writers in the House killed Sununu’s plan to spend $18 million over the biennium to expand full-day kindergarten programs. They also cut a $5 million college scholarship program.

“This is a short-sighted decision by a subcommittee of the Finance Committee,” said Mark Shriver, president of Save the Children Action Network, in a statement. “When he proposed his budget last month, Governor Sununu showed that he recognizes the importance of a full-day of kindergarten and understands the long-term economic benefits quality early learning programs can have for New Hampshire. The Republican majority in the House should stand with Governor Sununu and vote to put the full-day kindergarten funding request back into the budget.”

Full-day kindergarten isn’t the only proposal on the chopping block. The Alcohol Abuse Prevention and Treatment Fund was also cut this week.

The Alcohol Fund was created in 2000 by a bipartisan majority in the Legislature to be a funding mechanism that takes 5 percent of the gross profits from the sale of alcohol to support education, prevention, treatment, and recovery programs for alcohol and drugs. The funds would be allocated to the Governor’s Commission on Alcohol and Drug Abuse Prevention, Intervention, and Treatment to pay contracts for service providers in communities.

The fund has only been fully financed one time since its inception, which was in the 2003-2004 biennium. In his budget speech, Sununu proposed increasing the funds to 3.4 percent, double the 1.7 percent rate the previous budget had set.

“First, I propose we double the Alcohol Fund, increasing these important resources by more than $3 million and creating incentives to ensure that those funds are truly spent,” he said in his Thursday speech.

In several biennium budgets, the governor or Legislature would usually suspend the formula and allocate monies from the general fund to go to substance abuse prevention, treatment, and recovery.

Since there’s $59 million less in tax revenue coming in than expected when Sununu wrote his budget, Alcohol Fund advocates suspected that lawmakers would suspend the formula again. However, a more dramatic approach was taken by the House Finance Committee on Tuesday.

An amendment introduced by Rep. Neal Kurk, R-Weare, was added to the budget in House Bill 2 that would repeal the Alcohol Fund for good and it passed in a 6-4 vote on party lines.

“They’re trying to get to a number and they’re trying to come up with different avenues to do that, and some are very creative,” said Kate Frey, vice president of advocacy for New Futures, a nonprofit advocacy group that’s been one of the biggest proponents of the Alcohol Fund.

“New Futures has always been in favor of restoring the Alcohol Fund and using it as intended by the original statute to address problems for the substance abuse crisis,” she told NH Journal. “The fact that they are repealing the Alcohol Fund in its entirety is very unsettling.”

Advocates and some lawmakers like the fund because it’s non-lapsing and flexible, which is a creative and innovative solution to curb the opioid epidemic. The funds are non-restrictive, unlike some federal funds from grants that can’t be used to build brick-and-mortar recovery centers, for example.

New Hampshire is expected to receive $6 million, less than the $10 million previously anticipated by state officials, from the 21st Century Cures Act, bipartisan legislation approved by Congress and signed into law by former President Barack Obama in December, which gave $6.3 billion in funding to states hit hardest by the opioid crisis.

When Kurk introduced the amendment, advocates were also concerned because the language in the amendment appeared that he also repealed the authority of the Governor’s Commission to disperse the funds. The issue was cleared up on Wednesday, when that language was changed, giving the authority back to the Governor’s Commission to allocate funds, but still repealing the Alcohol Fund. The measure passed on a 5-4 vote on party lines, with Kurk absent.

Rep. Cindy Rosenwald, D-Nashua, who sits on the House Finance Committee, said the Governor’s Commission would receive $5.9 million in 2018 and $6.2 million in 2019 for alcohol and drug abuse education, prevention, treatment, and recovery, slightly less than what was allocated in the current biennium. If the elimination of the Alcohol Fund is passed, it would be up to the Legislature in each budget to allocate whatever they thought was an appropriate amount.

“Without the stability of that fund, it’s concerning to providers that are thinking about expanding their services here,” Rosenwald told NH Journal. “The flat funding for the next two years doesn’t expand access to treatment or recovery very much.”

When introducing the amendment in New Hampshire, Kurk said it was inappropriate for alcohol funds to go to the opioid crisis and that the issue the fund was originally created to solve, alcohol abuse, isn’t the main issue anymore — it’s opioids.

Advocates were quick to point out that the statute language when it was first written allowed funds to be used for alcohol and drug abuse programs. They also dismissed the idea that New Hampshire doesn’t have an alcohol problem anymore. According to a 2014 report, the Granite State’s per capita alcohol consumption is nearly twice the national average.

“I was very surprised at the elimination of the [Alcohol] Fund and I was surprised that they would suggest that somehow there is a disconnect between alcohol and our current opioid epidemic,” said Tym Rourke, chair of the Governor’s Commission, in an interview with NH Journal.

“The suggestion that New Hampshire only has an opioid problem is just false and somewhat disappointing that the Legislature would be picking one group of individuals who are suffering over another,” he added.

Previously, the Senate Finance Committee recommended passage of Senate Bill 196, which would put the Alcohol Fund at the 3.4 percent rate originally proposed by Sununu. The bill was laid on the table so lawmakers could go through the budget process before deciding on the fate of that bill.

Once the House Finance Committee signs off on the budget, it goes to the full House for a vote. The Senate will then get their turn to go line-by-line in the budget. At this point, Senate budget writers could have more money to play with since revenue estimates change throughout the year, so in theory, reinstating the Alcohol Fund and funding full-day kindergarten could see a new life. Advocates for those issues are hopeful the Senate would return them to the budget for Sununu to sign.

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