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Thursday, February 10, 2011

Lynch: Plenty of cuts, no tax rise in budget

MANCHESTER – Gov. John Lynch said the state budget he proposes next week will not increase taxes and keep level state aid to public schools over the next two years.

In remarks to the Greater Manchester Chamber of Commerce on Wednesday, Lynch called the budget dilemma “challenging” and predicted his proposed cuts will lead to a long line of complainers outside his office.

“I predict there will be a line of people waiting to see me – that’s after they go to the press and tell them what a bad person I am,” Lynch quipped in his presentation at the New Hampshire Institute of Politics at Saint Anselm College.

“They will come in and say, ‘Governor, great budget, courageous budget, tough decisions and I congratulate you on what you did with the budget with the exception of what applies to me.’”

Last month, Lynch, a Hopkinton Democrat, began his fourth two-year term in office with record super-majorities of Republicans in the House of Representatives and state Senate.

Both new House Speaker William O’Brien, R-Mont Vernon, and Senate President Peter Bragdon, R-Milford, said they are committed to erasing a massive budget shortfall without raising taxes.

Last week O’Brien pledged to cut eight small tax and fee increases contained in the current budget, including a 10 percent tax on gambling winnings and a $30 price hike on annual car and truck registrations.

The Center for New Hampshire Public Policy Priorities pegged the shortfall at $500 million while House and Senate budget experts have estimated that without deep cuts the red ink is closer to $1 billion.

Lynch has huddled behind closed doors with department heads and his budget staff making final decisions on a two-year, $11 billion spending plan.

“It is a challenge, but I will present a budget next Tuesday, and it will be a budget that has no new taxes and no increase in taxes,” Lynch said.

“It is going to be a good budget for New Hampshire, good budget for business, but it’s going to be a tough budget, a lot of hard decisions that will be made for the citizens of New Hampshire.”

Lynch said he’s proud the plan will earmark the same, $598 million in net state aid to public schools that is in the current budget.

This will require suspending a cost-of-living and enrollment upgrade that comes with state aid every two years and otherwise would increase grants by $160 million.

“At a time when other governors are slashing their aid to education, I am proposing we spend the same amount of money on education aid in the next two years,” Lynch said.

Manchester Mayor Ted Gatsas praised Lynch for the commitment for the toughest city budget he’s worked on in 11 years as an alderman and city executive.

“This will be tough but if there is no downshifting, we can get it done,” Gatsas said.

Any revenue that comes from the sale of assets should not pay to support spending plans but be set aside in the state’s Rainy Day Fund, Lynch said.

Last year, lawmakers assumed asset sales would generate $60 million to balance the current budget. A study committee concluded no appreciable money is likely to come through this initiative by the end of the budget year June 30.

A key opportunity for Lynch to compromise with GOP leadership in the Legislature would be in amending the state constitution to target aid to the neediest communities.

Bragdon and O’Brien have begun to work with Lynch privately on language although the House leader has said he’s reluctant to back changes to retain a “per-student” level of aid for all school districts.

“We are under a constraint unlike any other state that we are required to pay the first and last dollar of an adequate education,” Lynch said. “I don’t think that’s right.”

Lynch used the occasion to push for continued spending on infrastructure and rebutted calls to abandon study of extending commuter rail from Lowell, Mass., through Nashua and onto Manchester and perhaps Concord.

A House committee took testimony last week on legislation to repeal the New Hampshire Rail Transit Authority that lawmakers created three years ago. The rail group is expected to receive a multimillion, federal grant to complete a feasibility study of the project.

“We need to continue to make progress in looking at rail. It just makes sense to do that,” Lynch concluded.

“I think it would be a mistake for us to abandon our efforts to determine the feasibility of rail for New Hampshire.”

Kevin Landrigan can be reached at 321-7040 or klandrigan@nashuatelegraph.com.