-By Rosemary Ford and Caitlin Agnew
This article has been edited for length and clarity.
Every two years, lawmakers approve a state budget. These laws do more than decide where your money goes. They also set policy ideas and objectives. What is in this year’s budget bills? Judi Currie discusses that with Phil Sletten, research director for the N.H. Fiscal Policy Institute, a nonpartisan, independent research nonprofit that looks into the financial well-being of the state and its residents, and Anna Brown, executive director of Citizens Count, a nonprofit and nonpartisan organization dedicated to educating voters about the political process. Brown is also executive director of the Warren B. Rudman Center for Justice, Leadership, and Public Service at the University of New Hampshire’s Franklin Pierce School of Law.
Judi Currie:
Anna, can you talk about the recent history of state budgets? What sorts of things have been in them and what have they accomplished?
Anna Brown:
The first thing to keep in mind is that New Hampshire is pretty different from the federal government in that we have to pass a balanced budget, so we have to keep our spending limited. In the past few budget cycles, there was a lot of federal money coming in, and business tax revenue was coming in strong. So we saw a lot of state spending and also some tax cuts, some business tax cuts. They also repealed the interest and dividends tax in New Hampshire, we're losing out on a lot of that federal funding that has been drawn down, clawed back, cut, and we're seeing some slowing on some of that business tax revenue. So that's a challenge that is different from previous years.
It's also worth noting, though, that a lot of what happens in the budget happens in a trailer bill, House Bill 2. There's policy changes in there that can be pretty significant. So, for example, we've seen a restriction on abortion after 24 weeks. We've seen a ban on e-cigarettes for people under a certain age, and so on. So that policy part of the bill has become more important in recent years. Ten years ago, it was maybe around 30,000 words, and this year we're looking at close to 100,000 words.
Judi Currie:
Phil, where are we at in the process with the current budget?
Phil Sletten:
We’re in the last planned stage in the state budget process. That process actually formally began last year. New Hampshire, as you noted, Judi, has a two-year state budget. The majority of states actually have single-year state budgets, but New Hampshire is one of about 20 states that has a different timeline.
The state agencies actually put together their budget requests last summer. This process has been going on for about half of the duration of the current state budget, which is in effect from July 1, 2023, through June 30 of 2025 — so the end of this month is when the current state budget expires. The governor looked at those state agency requests and then put together her version of the state budget that she introduced back in February. The House considered the governor's version, made the changes that it wanted to see and then passed its version in early April.
The Senate was the next part of the process. The Senate looked at the House budget, made the changes that it wanted to see, and passed a different version, its own version, earlier this month. Now the House and the Senate have these two different versions of the state budget, and they have to reach agreement on them, because there can't be two state budgets that pass. There can only be one version. So the House didn't agree to the Senate's changes, and as a result they asked for a committee of conference. What that is a group of seven legislators, four from the House and three from the Senate, and they negotiate a final version of the state budget — or at least in the usual process what is a final version of the state budget. And that version is being negotiated right now in the committee of conference, and is going to go then for a vote ahead of both for both chambers.
Both the House and the Senate have to agree on that one version and pass it, because it is a state law like other state laws. Then the governor would have to approve it before it became state law. Now we're towards the end of the process, because we're running out of time on the clock. The current state budget is only in effect through the rest of this month, so we are in the final stages of what you might consider the regular state budget process.
Judi Currie:
Anna, what have budget talks been like? Republicans hold the governor’s office, as well as majorities in the House and Senate. Did the Democrats get any proposals in?
Anna Brown:
As you mentioned, there is party unity, technically, but there were divisions between Republicans in the House and Republicans in the Senate, as Phil noted.
For example, the House was interested in adding some policy changes — ending annual car inspections, limiting vaccine requirements, and so on. So it's not this perfectly unified vision under Republicans of what it should look like in the budget going forward. That being said, there are priorities in the budget that Democrats do support. I know that, for example, the Senate version of the budget restored Medicaid reimbursement rates, and that looks to be something that there's agreement on going forward.
In New Hampshire, the budget is such a big piece of legislation — there usually are wins and losses for everyone. But the question is going to be: Can Republicans all get on the same page right at the end? It's interesting to note, Governor Ayotte has actually criticized some in the Legislature for their low revenue estimates and saying that that's not enough to cover what we need to pay for in state government and that it’s basically playing into the Democrats' hands by setting us up for tax increases in the future. So that was kind of an argument that I didn't expect to hear come forward, and it can show that it's not always party lines where things break down.
Judi Currie:
Where do things stand with reconciling those differences in the committee of conference?
Anna Brown:
As I said, the House has moved up on their revenue estimates. They're willing to meet the Senate — not quite at the fully high level that the governor was proposing, or even the Senate was proposing — but still much higher than they were.
A lot of tension, though, is over this Group 2 retirement benefits for police and fire. There's tension among the Senate, and I think that we will also see potentially in the House — is there enough money in the budget to do this? Is it the time to do it? Of course, if we can't come to an agreement on the budget in our state legislature, that's a real problem, because the fiscal year is ending, so then we'd have to be looking at some sort of continuing resolution or temporary holdover, which is pretty rare in New Hampshire.
Judi Currie:
What kind of impact will these proposals have on the state?
Anna Brown:
One thing that I think we should talk a little bit about here, because it's been in the House version, the governor's version, the Senate version in some form, is expanded gambling and legalizing slot machines for New Hampshire. That is going to be a good source of revenue for the state going forward, and also a large cut of that revenue goes to nonprofits as part of the existing charitable gaming system.
But it's interesting to reflect. I remember less than a decade ago, there was huge resistance to expanded gambling in New Hampshire, and now we've sort of arrived there, and it doesn't even seem to be a central part of the debate. So people might be noticing, is that slot machine a real difference in New Hampshire's landscape or not? I don't know. So that's just something I think is worth highlighting.
On the immediate level, I think people might also notice tax and fee changes. You might notice a higher fee when you're registering a vehicle, but a lot of these changes are more long term when you're looking at changes to Medicaid or what's going on with university system funding, that has long term changes in terms of how our economy is moving, how much debt people are carrying, and so it wouldn't be an immediate impact.
Phil Sletten:
One of the places where there hasn't been a resolution yet in the committee of conference is around developmental services funding. That's a place where the Department of Health and Human Services identified — if developmental services were to be funded in the House version of the state budget — 278 people who are expected to need services over the next two years of the biennium who would then be on a waitlist for those services because there wouldn't be funding available. Now, the proposed versions of the state budget do allow, if there's revenue available, DHHS to seek additional funding during the biennium. However, we haven't seen a significant waitlist for developmental services in the state for most of the last decade because those services have been funded at levels needed to fund those budgets. That's not to say there aren't people waiting for those services, but those tend to be workforce challenges, as opposed to the nominal state funding challenge.
The university system component is, I think, important as well, because most of the funding that goes from the state budget to the university system is used to offset tuition for in-state students. So if that were to be reduced, that could have an impact on what tuition for in-state students does look like.
There's a couple other areas of the budget that are specific to particular services, particularly those that the House is proposing cutting and the Senate is proposing folding back in some way that may be difficult to either duplicate or replicate in other parts of the economy. I’m thinking about things like the Office of the Child Advocate, which provides oversight over the Division of Children, Youth and Families, and the Human Rights Commission. These are organizations that the state funds that could have those operations shifted to other services within the array of services that the state provides or to other entities in the state that aren't funded by the state or aren't as directly funded by the state, but those could have particular impacts on specific populations that are served.
Judi Currie:
What else are you two following at the State House in the next few weeks? Let’s start with Anna, then to Phil.
Anna Brown:
There's absolutely a lot of final bill negotiations happening in other conference committees, and those bills — whether they reach agreement or not in the Conference Committee —still would need to go before the full House and Senate again to agree with the committee recommendation.
A couple of issues that I'm watching allow evictions at the end of a lease. Right now, you have to have some sort of cause — you can't just say, “Hey, it's been nice knowing you. Goodbye.” That's been a major priority of Rep. Bob Lynn, the former chief justice of the New Hampshire Supreme Court. It's been a long brewing debate.
And other bills — for example, outlawing puberty blockers or hormone treatments for minors. That's been another sticking point in how it might be implemented between the House and the Senate.
Phil Sletten:
I'll be watching to see if the legislative chambers do also pass a House joint resolution that's a clear sign that they think that the budget may not be resolved by July 1, and to see in these last stages of committee of conference which separate policy bills as well as funding proposals are included or not included within the state budget, and how that might affect the committees of conference for other bills that are being wrapped up, in terms of developing their final proposals
But I’m really watching what happens in the budget and what the full Legislature considers, or what considerations the full Legislature has with regard to the committee of conference version of the state budget. Because, remember, it's a small group of legislators who are on a committee of conference, and then they have to convince their fellow legislators in both the House and the Senate that the committee of conference budget is something that they could support. That's a key variable, I think, going forward, but it'll all be wrapped up, or at least we'll know a little bit more by July 1.
Judi Currie:
Interesting as always. Phil Sletten, research director for the N.H Fiscal Policy Institute, and Anna Brown, executive director of both Citizens Count and the Warren B. Rudman Center for Justice, Leadership, and Public Service at the University of New Hampshire’s Franklin Pierce School of Law, thank you both for joining us today.
“The State We’re In” is a weekly digital public affairs show produced by NH PBS and The Marlin Fitzwater Center for Communication at Franklin Pierce University. It is shared with partners in the Granite State News Collaborative, of which both organizations are members. For more information, visit collaborativenh.org.