New Hampshire Budget Compromise Reached Between Democrats, Sununu

CONCORD, NH — After more than three months of squabbling, New Hampshire's leaders are praising a budget compromise that appears to give both Democrats and Republicans exactly what they wanted in a fiscal year 2020-2021 budget: Increased spending on priorities without raising taxes. In a joint press statement, Gov. Chris Sununu, R-NH, Senate President Donna Soucy, D-Manchester, and House Speaker Stephen Shurtleff, D-Penacook, called the budget compromise a win that reflects the interests of the state's citizens.

"The people of New Hampshire won today," said Sununu. "This compromise budget does not increase taxes, and ensures financial promises can be kept to the people of New Hampshire. This budget is something I can support."

Sununu said he worked with state Sen. Chuck Morse, R-Salem, and state Rep. Dick Hinch, R-Merrimack, and remained in close contact with them as these negotiations progressed.

"I am hopeful that Legislative leaders – from both parties – can deliver this critical compromise when it goes before the full legislature on Wednesday," he added.

Soucy said that budgets were a statement of values and this compromise would provide the resources and opportunities Granite Staters need to thrive.

"This budget maintains vital investments that the Democratic legislature made in mental health, substance use disorder treatment, and child protection and ensures meaningful raises for providers who deliver critical care to our loved ones by implementing long overdue Medicaid reimbursement rate increases," she said.

Shurtleff agreed.

"We can all be proud of the compromise reached today on a balanced budget that moves New Hampshire forward," he said. "This budget preserves important Democratic priorities, including the largest investment in job training and public education in the history of our state that will advance educational opportunities for all and along with reinstating municipal aid will provide meaningful support to cities and towns and critical property tax relief to Granite Staters."

The House and the state Senate will vote on the budget Wednesday.

Items Added; Some Taken Away

As with any compromise, no one comes away with everything they want and changes are made along the way.

One was the business tax reform known as GILTI (global intangible low-taxed income) which is expected to raise $15 million from large corporations. Those funds will be used to offset the slivers of business profits and business enterprise tax reductions approved in previous sessions, across a number of years. Those tax rate reductions remain in place and will be triggered, Sununu said, if total projected revenue is 6 percent higher than expected. Democrats were not happy with $80 million reductions but some of that reduction – about $60 million – could have come from the 86 days, $700,000 per day, that the state has been chugging along at FY 2019 spending levels.

Another victory for the public and the state is a $9 million boost in the nursing program at UNH, something that Sununu pushed for. With an aging population and a nursing shortage, this program was badly needed for the future. Along with the new New Hampshire Career Academy, young people in the state can move into skilled trades that need to be filled in the economy without accumulating piles of education debt.

Another $5 million is being put into the rainy-day fund, state employee contract set asides get a $6 million addition, and another $3.25 million will be spent to replace fishing piers, all things Democrats supported.

Education funding gets a one-time $62.5 million increase, on top of the previous stabilization fund implemented in FY12, which was supposed to address funding issues in the wake of declining enrollments due to low birth rates in the state but hasn't. The budget doesn't alleviate school funding and spending issues for the future either. The compromise also doesn't address what schools and municipalities will do in two years if they take the hundreds of millions of dollars in local aid and increase spending to "new normal" levels instead of providing property tax relief to residents, which has been the marketing pitch for months. The $40 million city and town aid is expected to be used on one-time projects.

The budget also includes a provision to increase the age to buy cigarettes in New Hampshire from 18 to 19 instead of 21 and state funds will not be used to pay for abortion services, according to Republicans.

Medicaid Expansion continues under the 2014 bipartisan agreement which prohibits general funds to be used while also ensuring those in need receive health care services. Another $50 million is being reduced at the New Hampshire Department of Health and Human Services, while also requiring the department to issue quarterly reports on payments in relation to actual costs.

Sununu stated that the compromise does eliminate 75 percent of the structural deficit, due to increased spending proposed by Democrats, for the FY 2022-2023 budget, a major concern. At $25 million, the corner office sees this as manageable, especially with a booming economy, record high labor participation rates, and record low unemployment.

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