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Sunday, March 28, 2010

Pawlenty: Don’t follow Mass. lead

Kevin Landrigan

Minnesota Gov. Tim Pawlenty, a potential Republican presidential contender in 2012, said universal health care in Massachusetts is no model the nation should follow.

“The plan is dramatically propped up by federal money,” he said. “Take that away and there would be dire economic consequences.

“Looking at the Massachusetts experience, it would not be one I would want for the country to follow any further.’’

Now that Congress passed the health care reform law, the Massachusetts health experience could become even more a critical bellwether for Mitt Romney’s second run for president, in 2012.

During an interview with The Sunday Telegraph, Pawlenty didn’t mention Romney by name, but he relayed how Massachusetts state Treasurer Tim Cahill warned that a national version of the Massachusets law could bankrupt the country in four years.

Cahill is running as an independent for governor.

Romney will return to the state April 8 for a book tour that will include a visit to the Institute of Politics at St. Anselm College in Manchester.

Pawlenty lamented there were plenty of what he called “bipartisan areas of agreement’’ on health care far short of the national reform, including a new payment system, built-in incentives for healthy outcome, offering insurance across state lines and tort reform. He asked his state attorney general to join the 13 states suing the Obama administration over the law.

“We now have the federal government reaching so far inside our society, dictating whether human behavior is good or not,” Pawlenty said. “That is a quantum leap, and it should be alarming to people.”

Most historians now conclude former President Bill Clinton moved to the political center and ensured his solid re-election after his failure to achieve national health care.

Now that Obama has it, Pawlenty said there are all indications Obama will continue to play to his liberal base.

“He’s given no indication at all of moving to the center at all,” Pawlenty said. “You’ve got big government, big business and big unions taking care of each other, all to the detriment of the average person.”

Gambling on the ‘V word’

It’s all on you, Governor.

Maybe this is what he wanted all along, but the ever cautious, three-term Democrat now sits in the driver’s seat when it comes to dealing with the massive state budget deficit.

Getting to this destination, however, proved to be a very bumpy ride. Gov. John Lynch now has some Democratic leaders in both legislative branches privately unhappy with him.

Senate supporters of expanded gambling were miffed to watch Lynch come out and oppose a slot machine and casino-style legalization bill minutes after they had gotten it through the Senate. They liken it to Lynch’s vow in the spring of 2009 to veto a gas tax that came moments after the House of Representatives had approved a three-year, 15 cent hike.

House budget conferees objected, gaming was disengaged and that’s when lawmakers turned to the LLC tax, campground tax and others – and you well know the ugly details from there.

Then there are House budget writers who thought Lynch’s Hamlet act about gambling waiting until after the fact moved the Senate to reject a small package of cuts while they had unanimously endorsed cuts seven times larger.

“We were left holding a bad bag, and senators got to preen for the camera and for those who rely on Human Service spending that we felt had to be part of the cuts,’’ one House leader said. “If the governor had used the ‘V (veto) word’ about gambling, that bill never gets out of the Senate and we could be getting down to business.’’

Keep in mind, this wasn’t as easy a task as it appeared on the surface. You may recall Democratic Sen. Lou D’Allesandro couldn’t get a stand-alone gaming bill through the Senate last year and had to attach it to the two-year state budget.

At one point Wednesday, Lynch told one senator he believed the issue would deadlock 12-12. Later in the afternoon and prior to the Senate vote, Lynch told another source it would pass 13-11.

The 14-10 Senate passage is hardly a groundswell, but it wouldn’t have happened without the backing of Keene Democrat Molly Kelly and Senate Republican Leader Peter Bragdon, of Milford. Those were the pivotal votes for gambling advocates to turn, and they did.

Taxing projections

How big will the budget deficit be?

Well, the $140 million estimate Lynch offered six week ago assumes we fall $65 million short in revenue.

Through February, we were $50 million short of the forecast.

With less than a week left in this pivotal month, the news isn’t great, but it could have been much worse. All taxes and fees through Thursday were $20 million shy of the $594 million estimate.

March is a quarterly month for business taxes, and those are $10 million short with a few days left.

The final numbers will be better than that, as liquor revenues were short close to $2 million, but they always get a boost from the final weekend. The same is true from state lottery sales, which were more than $2 million below the target.

The tax on interest and dividends was $1.5 million below the plan, but April is the big month when all the annual returns are due, including 2009 dividends to LLC owners and members.

What should we add to the $140 million shortfall, along with the inevitably smaller base of revenue?

Let’s start with repeal of the LLC, which now is inevitable; that’s more than $15 million less, whether it was really ever going to raise that or not.

The campground tax looks like a goner, too, and that’s $4.5 million, even though forecasts admit it’s likely to only raise half that.

Some state department heads are expressing some doubt that they can meet the targets for returned money to the treasury or lapse amounts. The state is counting on $25 million a year from that source.’

Don’t look for Lynch to go this high, but some seasoned budget watchers peg the real hole at closer to $200 million, with an even gloomier $225 million deficit from others.

Playing with numbers

All eyes are on the 2011 deficit, but some close to Lynch have a more immediate concern.

That’s the shape of the state budget this June 30, weeks after he’ll make it official and file for a historic fourth term in office.

State law doesn’t require the first of the two-year budget cycle to be in balance, and some years it hasn’t been.

But with Democratic fortunes at great risk this fall, the last thing Lynch wants is to run again with red ink stains on his fingers. Legislative budget assistant Jeff Pattison pegged the 2010 deficit at $86 million.

With so little time left, how much can Lynch do to alter that picture? The answer is quite a bit.

Lynch is expected to present to the Legislative Fiscal Committee on April 12 an executive order that would offer cuts throughout most state agencies.

How to get the rest?

Well, there’s one way that’s under serious study, and it would involve the federal stimulus money known as state stabilization grants.

The current state budget divvied $160 million of that in half, $80 million in each year to support adequacy aid grants to school districts.

The research has been done, and the state could back load some of the $80 million slated for 2011 into 2010. It doesn’t change the size of the ultimate deficit, but merely would make next year’s hole bigger and could wipe out this year’s shortfall.

Rolling the dice

Gambling supporters have to make some fast decisions on the fly.

Are they willing to accept significant changes to their blueprint (SB 489) to give it a fighting chance of clearing the House?

If six locations for slots and table games are too much, would they scale that back in half? If so, which part of the state be left without a project when the music stops?

That’s easy. The top three destinations in this bill, in order, are Rockingham Park in Salem – No. 1 by a mile – Hudson and Seabrook, with The Lodge at Belmont competitive in this battle for the bronze medal.

But the Belmont folks most want historical racing or betting on randomly selected races that have already occurred.

Don’t look for advocates to be sending out bodies to pass this bill, however. When they do, one of two North Country sites will be the first to go, perhaps followed by Belmont.

Forget what the calendar requires; the move to schedule the gaming bill before the House Local and Regulated Revenues Committee this Tuesday is a sign the leadership in both parties is giving no help to this cause.

House Finance Committee Chairwoman Marjorie Smith, D-Durham, has long opposed expanded gambling, and she said she most objects to the fact the big winners in all of this would be out-of-state casino developers and not New Hampshire businesses.

“I would certainly hope the profits would be for New Hampshire companies and would stay in New Hampshire,” Smith said. “That’s not the case in this bill.”

She waxed nostalgic about the proposal several years ago of then-Senate President Ted Gatsas to have this become a state-controlled gaming operation that would mean not having to give half of the gross revenue to the operators, but a smaller percentage.

That’s a non-starter with D’Allesandro; Millennium Gaming, which holds a racino option at Rockingham Park; and the owners of Green Meadow Golf Club in Hudson, who have their own destination resort.

“The state would keep the money and would maintain control,” Smith said. “If the answer is yes to this, there are a lot of questions that really need to be answered.”

No sellouts

Let’s dispense with the latest rumor making the rounds Friday that the developers of the Hudson project would sell their franchise on the property to Millennium Gaming, which holds the option on Rockingham Park.

“I laughed out loud when I heard that one,’’ said former Senate Majority Leader Robert Clegg, of Hudson, now a lobbyist for the Green Meadow project.

The deep-pockets developer behind the Friel family, which owns Green Meadow, has never been identified, but Clegg confirmed it’s a national company with casino and other business.

“They have both union and nonunion locations,” Clegg said, “and I’m most impressed with how the principals relate to everyone working there down to the people taking out the trash.

“Our partners have no intention of selling to anyone, and they are convinced this is a market that will be very successful.’’

Bowing out

Is any New Hampshire Republican really surprised to see former U.S. Sen. Bob Smith bail out of another campaign late Thursday, this one for the U.S. Senate in Florida.

There wasn’t enough oxygen or campaign cash for Smith to compete in this race, in which House Speaker Marco Rubio has become the potential giant-slayer, leading in the polls for a closed Republican primary against Gov. Charles Crisp.

“Together we have tried to change the top-down paradigm from what is excessively dependent on sound-bite ads, and vulgarly over-funded by special interest money, to a grass roots-driven process,’’ Smith wrote in a letter to supporters.

“I have always recognized, however, that my campaign would need some degree of major funding to succeed. Unfortunately, funding has not materialized and we have reached the point where we can go no further without it. Sadly, therefore, I must now announce that I am ending my campaign.’’

The Florida GOP battle has become a rerun of the 2008 presidential primary in some minor ways. Crisp has the backing of Sen. John McCain, the 2008 GOP presidential nominee, while many in Rubio’s corner worked for former Massachusetts Gov. Romney’s White House effort.

In closing, Smith did not endorse anyone, but urged supporters to put all remaining Senate candidates through the paces.

“Therefore, as I end this campaign, I urge you to continue to ask the tough questions,’’ Smith said. “Demand detailed positions and Constitutional solutions from not only the U.S. Senate candidates, but from all of them, and do not accept squishy, sound-bite platitudes from the party playbook.’’

Virtual premium

Why would Office of Information Technology Director Rick Bailey, of Bow, take an $8,000 pay cut to become the new director of Motor Vehicles?

Well, for starters, this is an agency Lynch has placed a big premium on making more virtual. Current Director Virginia Beecher carried out Lynch’s first desire, which is to allow motorists to get their car and truck driver licenses online. But IT officials dispatched to Beecher’s agency told Bailey there are many other projects that could be achieved in the next few years.

Some wonder if this is a sign that Lynch and others might be ready to pull the switcheroo and break up the OIT and divvy back those staffs to agencies.

Former Gov. Craig Benson made OIT his brainchild, and many credit it under Bailey’s management for finally making it possible to quantify what computer expenses cost.

The Executive Council got a tour of the new $20 million computer system at the Department of Revenue Administration, which will be able to crank out IT reports on right-of-way owners for the Department of Transportation, potential new business property for the Division of Economic Development, and marketing and visitor trends for the Office of Travel and Tourism.

Lynch had looked at breaking up IT before and concluded it could be too cumbersome and counterproductive.

Some see Bailey’s departure as a signal that at the very least, OIT’s influence throughout state government won’t be what it once was.

Bailey goes out of the legislative firing line to DMV, an agency that relies on no money from state taxes and fees and operates well under the radar of rough-and-tumble scrutiny. This will also allow Lynch to deploy Bailey to work on special projects, such as the New Hampshire First computer system.

Bailey faces a public hearing on April 7, along with Paul Leather, who for several months has been rumored to become the next deputy commissioner for the Education Department, replacing retiring Mary Heath, of Manchester.

Kevin Landrigan can be reached at 321-7040 or