NH House approves $15.76 billion budget for next biennium
CONCORD — A negotiated agreement between the Republican and Democratic leadership led to the House approving its budget package Thursday on a voice vote after three hours of debate.
The agreement changed the school funding formula so that a greater percentage of money flows to property poor communities, increased funding for affordable housing and Medicaid reimbursement rates, removed $20 million from the Education Freedom Account program and retained the 300 percent of poverty eligibility cap, changed the state’s emergency procedures and provided more funds for family resource centers and the system of care programs.
Overall, the House budget spends a total of $15.76 billion over the next biennium, which is about 18.8 percent higher than the current budget, with general fund spending of $6.37 billion on revenues of $6.2 billion.
While some representatives objected to the size of the budget, others said inflation and workforce issues justify greater spending.
“We have to face reality and adjust to it,” said House Finance Chair Rep. Ken Weyler, R-Kingston, noting they had to adjust for inflation and the growth in the state’s population.
He said lawmakers should be thankful the state has the budget surplus for this biennium to support the needed spending.
But Rep. J.R. Hoell, R-Dunbarton, noted spending more money than you take in eventually leads to bankruptcy.
He said the legislature cannot depend on the surplus in the future.
“We can’t count on all of that to prop us up,” Hoell said. “Our spending needs to be below our revenues. Anything short of that is irresponsible.”
Hoell later proposed an amendment that cut about $200 million from the budget by reducing the state employee pay raise, flat funding by the university and community college systems, and removed $6 million for renovations at the Whittemore Center at the University of New Hampshire, which others also attempted to do without success as well.
Hoell’s amendment was killed on a 300-72 vote, while the compromise plan was approved on a 326-63 vote at the beginning of the debate which included action on 17 amendments including the compromise plan.
House Majority Leader Jason Osborne, R-Auburn, said he hopes the agreement provides “a smooth way to yes.”
House Minority Leader Matt Wilhelm, D-Manchester, said the plan “gets us closer to delivering a budget that works for all Granite Staters.”
He touted the additional spending for affordable housing, for Medicaid reimbursement rates and for changing the education funding plan so that students in poorer communities receive additional state aid.
“We need a budget that reflects our priorities as a state and is fair to everyone,” Wilhelm said. “When we come together in good faith, we can disagree without being disagreeable, we can reach common ground where Republicans can win, Democrats can win, but more importantly Granite Staters win.”
The change in the school funding formula spends about the same amount of money as the earlier plan but reinstates fiscal disparity grants which use the amount of property value needed to fund a student as well as the local poverty rate to provide greater help to the districts with the greatest needs.
The plan originally approved by the House Finance Committee, provided the same money for property poor communities such as Berlin, Claremont, Hebron, Epsom, Franklin and Pittsfield, while property wealthy communities such as Amherst, Bedford, Bow, Newfields, Portsmouth and Hanover received more aid than they do now.
The new funding plan also drops the base adequacy grant to $4,000 from $4,700 which goes to public school districts for every pupil in the state.
House Education Committee chair Rep. Rick Ladd, R-Haverhill, told the House raising per pupil grants costs $16 million for every $100 in the basic grant, while the original plan would have spent $128 million just for the cost of the per-pupil grants instead of targeting that money where it is most needed.
Ladd said no community loses money under the new formula.
“This is not a broken formula,” he said. “We are allocating our resources to best support the children in this state.”
An attempt was made to change a provision in the budget that moves about $450 million from the Education Trust Fund to the state General Fund, by changing the percent of business tax revenues going to the Education Trust Fund.
The sponsor of the change, Weyler, said the fund was created to pay for adequacy grants, and charter school grants, and that was what he was proposing as well as for Education Freedom Account grants.
The change moves special education, school building aid, court ordered placement and tuition and transportation costs into the general fund.
Rep. Mary Heath, D-Manchester, attempted to leave uses for the Trust Fund as they are now, while increasing the percentage of business tax revenues going to the trust fund over what Weyler proposed that is now in the House budget.
However, the amendment failed on a 197-191 vote.
She also attempted to increase school building aid by $10 million in each year of the biennium, but that failed on a 194-189 vote.
The budget includes a 12 percent pay raise for state employees, with 10 percent in fiscal 2024 and 2 percent in fiscal 2025, costing more than $200 million over the biennium.
Also included is a change in retirement benefits for Group II (law enforcement and firefighters) members who were not vested when the last major change was made in benefits in 2012, costing $50 million over the next decade and a cost of living raise for Group II members costing $9 million.
The change is funded by retaining the communications tax and eliminating the interest and dividends tax a biennium earlier than planned, or at the end of the next biennium.
An attempt to let the levy phase out over another biennium as approved in the last budget failed on a 199-190 vote.
The budget includes $50 million in a one time payment to pay down the unfunded liability of the State Retirement System.
The House did approve an amendment that allows employees of the Community College System of New Hampshire to continue to choose between an individual retirement account and belonging to the State Retirement System on 199-187 vote. The budget limited new employees to individual retirement accounts.
Lawmakers also removed $1.4 million from the budget for a northern border alliance intended to limit illegal border crossings that Gov. Chris Sununu wanted.
That was not the only thing the House budget removed that was sought by Sununu, including a one-time $75 million infusion into the school building aid program in the second year of the biennium, and $40 million for a new men’s prison.
The House also did not enact many of the changes Sununu sought in the regulatory and licensing agencies, saying more time is needed to sort it out, and reduced the money for the Invest NH program to spur housing construction from $30 million to $15 million, and the Affordable Housing Fund from $25 million to $15 million, but the compromise plan restored that money.
The House added $18.5 million in state money for nursing homes, to keep the cap for counties the same as it was last year. Sununu’s budget increased what counties would have to pay as did his budget two years ago, but legislators added state money so the county portion of property tax bills would not increase.
The House budget also set aside $30 million due to a change increasing eligibility for the free and reduced lunch program.
The House did however institute an across-the-board, back-of-the-budget cut of $23.4 million for the Department of Health and Human Services and capped employees at 3,000 which is about 250 less than authorized currently.
The House also rejected amendments proposing legalizing cannabis and for increasing the income eligibility cap for the Education Freedom Accounts to 500 percent of the federal poverty level.
The bill now goes to the Senate which will have until June to vote on its plan.
Garry Rayno may be reached at email@example.com.