NH State Representative Steven Smith

OVERALL, DOES THIS REPUBLICAN BUDGET SPEND MORE OR LESSo THAN THE PREVIOUS (FY14-15) BUDGET?

The budget proposed by House Finance spends $75 million more in general funds than the previous budget. General funds are those funds raised by state taxes.

The budget proposed by House Finance spends $362 million more in total funds than the previous budget. Total funds includes all sources of revenue including federal funds we receive to pay for certain programs. The rise in federal funds we receive is responsible for the increase in total fund spending.

On Friday, Americans for Prosperity State Director Greg Moore stated that these spending levels represent, “a fiscally responsible growth trajectory,” that lives within the state’s current means.

DOES THIS REPUBLICAN BUDGET SPEND MORE OR LESS THAN THE GOVERNOR’S PROPOSED BUDGET?

Less. The Governor’s proposed budget spends $11.486 billion dollars in total funds and $ 2.897 billion in general funds. The House proposed budget spends $11.159 billion dollars in total funds and $2.732 billion in general funds.

Thats $165 million reduction in general funds and $327 million reduction in total funds.

DOES THIS REPUBLICAN BUDGET PROPOSAL CONTAIN ANY OF THE TAX INCREASES IN THE GOVERNOR’S BUDGET PROPOSAL?

No. All of the Governor’s proposed tax increases have been removed by House Republicans. These tax removals include increases in taxes on businesses, an increase in the tobacco tax, and the increase in motor vehicle registration fees.

DOES THIS REPUBLICAN BUDGET PROPOSAL INCLUDE ANY NEW OR INCREASED TAXES?

No. There are no new or increased taxes in the House Republican budget.

DOES THIS REPUBLICAN BUDGET EXTEND MEDICAID EXPANSION?

No. As prescribed by current law, the New Hampshire Health Protection Act is still scheduled to sunset at the end of 2016.

I’VE HEARD LEGAL SETTLEMENTS AND FEDERAL REGULATIONS ARE COSTING US MONEY. HOW MUCH OF THIS BUDGET IS TIED TO THOSE ISSUES?

Due to legal settlements the state has entered in to (Mental Health Settlement, Medicaid Enhancement Tax / Hospital Settlement) and Federal changes to Medicaid eligibility, the state is obligated to spend $123 million in general funds it could have otherwise have had discretion to spend elsewhere. This sum is included in the budget, and the cost of those items is being absorbed by reductions in other areas of government.
HOW HAS THE DEPARTMENT OF TRANSPORTATION BUDGET FUNDING BEEN ADDRESSED?

The majority of the DoT budget reductions will be offset by modifications made to funding other levels of other areas of government. There will be no tax or fee increases to fund DoT.

I’VE HEARD THERE ARE “DRACONIAN” CUTS IN HHS SPENDING. IS THAT ACCURATE?

Budget to budget, general fund spending related to HHS is increasing by $78 million and total funds by $131 million. Many programs are receiving increased funding. Some may not receive as much as they did during the last budget. Finance Division III made prioritized, thoughtful and reasonable spending decisions on how to fund programs to ensure our state’s most vulnerable citizens receive essential care and services.

I’VE HEARD THERE ARE DRAMATIC “CUTS” TO HIGHER EDUCATION. IS THAT ACCURATE?

No. The last legislature appropriated $153 million to the university system for the biennium (FY-14-15). They lauded the proposal, froze tuition, and gave a thank you card to the Governor for signing the budget that contained the appropriation.

The House budget proposal seeks to give them the same amount, $153 million, for the coming FY16-17 budget. Their funding is not being cut; it is level-funded.

The community colleges will receive $4 million more in the next biennium.

I’VE BEEN TOLD EDUCATION AID TO TOWNS IS BEING CHANGED. IS THAT ACCURATE?

There is a change to how stabilization grants will be distributed. The change will primarily affect towns that have had fast growing student enrollment and may have previously been capped in the amount of aid they receive. The other affected towns would have had a decline in student enrollment and had been receiving stabilization aid to help mitigate the reduction in adequacy aid.

Special Education Catastrophic Aid will finally be funded at 100 percent (up from 77 percent) and that all school districts will finally get their full share of funding, which may well offset changes to the stabilization grants.

Stabilization grants will continue at the Governor’s level for 2016. In 2017, for those towns that have had a decline in enrollment and could have expected a correlated reduction in funding, no town will lose more than $750,000. For those 15 towns whose enrollment has climbed and have been affected by the cap, the cap is now removed and they will be fully funded. The amendment has mitigated the reduction in funding for dozens of communities. Many towns will see no change.

I’VE HEARD THERE ARE CUTS TO MEALS ON WHEELS. IS THAT ACCURATE?

Funding for home delivered meals is included in a budget line item with many other services. The budget line in that category of service does see a reduction in funding from the Governor’s proposal, but it is at the discretion of the Department of HHS to disburse and prioritize those funds in a manner they see fit.

On Thursday, the committee received written communication from the Commissioner of DHHS that funds appropriated for purposes,  categorized with meals on wheels, will be prioritized to meals on wheels.

Today, the House Finance committee completed work on HB1 and HB2 including two additional amendments.

These amendments seek to resolve two key issues:

• Restoring $19 million to education stabilization grant funding to towns and cities
• Restoring $34 million per year in funding to the Department of Transportation

The amendments to HB1 and HB2 to address these issues did the following:

• Kept funding to the University System of New Hampshire at current FY14-15 levels. This freed up $14.5 million.
• Redirected $50.8 million from the Renewable Energy Fund to the General Fund.
• Replaced the Department of Safety allocation from the Highway Fund with $23 million per year from general funds.
• Redirected a portion of the revenue from the 4.2 cent road toll increase enacted in 2014 (SB367) to fund DoT operations, not just betterment.

As a result of these amendments, the Department of Transportation is funded at a level comparable to our current operating budget.

As a result of these amendments, funds were also available to restore $19 million in stabilization grants to cities and towns.

There are no additional or increased taxes or fees associated with these amendments.

Stabilization grants will continue at the Governor’s level for 2016. In 2017, for those towns that have had a decline in enrollment and could have expected a correlated reduction in funding, no town will lose more than $750,000. For those towns whose enrollment has climbed and have been affected by the cap, the cap is now removed and they will be fully funded. The amendment has mitigated the reduction in funding for dozens of communities.

Towns and cities will also continue to receive their current level of municipal block grants allocated from the pre-existing (18 cent) road toll.

Lastly, the committee approved an additional amendment appropriating $300,000 per year to the Fish and Game Department, with half of those funds being earmarked to support overtime costs for search and rescue operations.

The budget now ends with a $168,000 surplus which will fall to the “Rainy Day” fund.

House Republican Office

New Hampshire House of Representatives

State House Room 313, Concord, NH 03301

Why is the DOT Budget in a separate bill?

The problems facing the Department of Transportation are unique and serious. Dealing with the DOT budget separately through HB357 will allow the House more opportunity to discuss and debate the issues, facts, and figures specific to DOT.

I’ve heard there will be cuts to personnel and/or operations in DOT. If the gas tax was raised last year, in part, to help fund certain aspects of DOT, why the disparity from one budget to the next?

Over the last 3-4 budget cycles, there have been a number of one-time fixes and/or revenue sources that helped fund DOT. For example:

2008 – $65M Bonding of Operating Expenses
2010 – $46M Registration Surcharge (repealed in 2011)
$50M I-95 Transfer to Turnpikes
2012 – $52M I-95 Transfer to Turnpikes
2014 – $29M I-95 Transfer to Turnpikes

These one-time fixes along with the reduction of federal funding have resulted in what is estimated to be an $88.2 million deficit, if no new revenue source is identified or enacted. $88.2 million represents a reduction of over 40%.

Despite the 4 cent per gallon gas tax increase enacted in 2014 (SB367), revenue from the increase will not cover the large deficit. In fact, the majority of revenue from the increase is dedicated to specific items including resurfacing, municipal grants and I-93. In addition, overall revenue is expected to trend downward as vehicles become more efficient.

Is the current legislature to blame?

No. Actions (or inaction) by prior legislatures and administrations are the real culprit. The shell games and reliance on one-time revenue that has happened over the last 10 years have lead us to this situation. The chickens have come home to roost.

The proposal included in HB357 reflects a budget that lives within our current means, without raising the gas tax or registration fees. As a result, there is a stark reduction in funds available for our transportation infrastructure.

Will there be alternative solutions to this “live within our means” budget?

As with any budget bill, alternatives may be proposed in the form of floor amendments to HB357.

Should this budget be viewed as a negative reflection on DOT employees or management?

No. The vast majority of DOT employees and management are hardworking people who provide a great service to our state. The proposal in HB357 is in no way a suggestion that the House Finance Committee or the House of Representatives has a negative opinion of any individual employee or agency.