While lawmakers have been holding hearings, work sessions and executive sessions on their more than 1,000 bills, Gov. Chris Sununu and his office have been working on his proposed budget for the next two fiscal years – 2020 and 2021.
The governor will present his biennial budget proposal Thursday before a joint session of the House and Senate and then meet with House budget writers the following week to explain his plan a little more.
Last year in his first term, Sununu unveiled a $12.2 billion budget that focused on enhancing educational opportunities for students, improving the state’s business climate, improving key health and human services divisions and fighting the state’s opioid epidemic.
This year he is again likely to address needs in the state’s mental health/substance abuse treatment system in light of the recently released 10-year mental health plan.
Mental health plan
The plan developed over the last year, contains recommendations that would cost $32 million the next two fiscal years, but within the state’s $100 million plus revenue surplus for the 2018 fiscal year.
The mental health plan addresses Medicaid reimbursement rates — among the lowest in the country — and emergency services to reduce the average 40 or so individuals in hospital emergency rooms daily because the New Hampshire Hospital, the state’s psychiatric hospital, and community in-patient programs are at capacity.
The plan also calls for boosting community services, housing and peer support programs as well as education and outreach.
One of the key suggestions is to move juveniles out of New Hampshire Hospital and into the John H. Sununu Youth Services Center in Manchester, which currently houses the youth detention center.
Although the plan specifically calls for spending $12 million and $10 million in the next two fiscal years, all the recommended changes would result in $32 million in new spending over the same period.
Democrats in control of the Senate have introduced a series of bills that would address many mental health and substance abuse treatment issues raised in the report, but Sununu told reporters last month he wants an integrated approach with an eye on overall costs rather than one bill at a time.
Mental health is but one area. State agencies submitted budget requests last fall that would more than use up the surplus plus the $100 million in the rainy day fund.
Those requests will be trimmed by the governor and then some more by the House and Senate as the spending and appropriations picture comes into clearer focus near the end of the fiscal year June 30.
For the current fiscal year, the total state budget is $6.1 billion, while agencies requested spending $6.7 billion in fiscal year 2020 and $6.8 billion in 2021. State general fund spending for this fiscal year is $1.58 billion, with requests of $1.86 billion in 2020 and in 2021.
For example, the University System of New Hampshire received $81 million in state support this current fiscal year, the same received the last three fiscal years.
But university officials have requested $95 million for 2020 and $99 million for 2021. Politically it is hard to justify increases in tuition at the state’s colleges and universities with the amount of surplus revenues flowing into state coffers or if touting the state’s educated workforce.
The New Hampshire Community College System fared better than the university system did in Sununu’s last budget, but wants additional money for the biennium, too.
The community colleges received $47.1 million this fiscal year, and would like $56 million in 2020 and $57.2 million in 2021.
And money for state education aid was cut during the last biennium when stabilization grants were reduced 4 percent annually. This year lawmakers are being asked to return the grant money to its original level before the reductions began.
Restoring the money would add about $12 million annually to the budget.
Overall requests from the Health and Human Services Department is up about $400 million over the last biennium and $270 million for the Department of Transportation, where most of the increase would come from federal highway money.
While there may not be enough money to pay for all of the requests, the state has not had a revenue shortfall for some time, and the last four fiscal years have had substantial revenue surpluses over what budget writers anticipated.
And this fiscal year appears to continue — if not build — on the revenue trend.
At the end of January, state revenues were $129 million more than budget writers anticipated at this point in the fiscal year. Business taxes were well ahead of projections but that is offset by significant shortfalls in liquor and tobacco revenues and the real estate transfer tax.
Last year at the end of January, the revenue surplus was $39.2 million yet the fiscal year ended with a $170 million surplus, which is different from a budget surplus that also takes into account spending, which is often higher than anticipated when the budget is approved.
Veto new taxes
Sununu has already said he would veto any sales or income tax proposal or any tax or fee increases and made clear to reporters that holding business tax rates at their current level would be a tax increase given the law to continue reducing the rates over the next few years.
Sununu’s budget proposal presented Thursday will be the first stop along the sausage assembly line that will produce a budget at the end of the session reflecting lawmakers’ priorities.
Hundreds of bills will be passed in the next few months, but none will have the impact of House Bill 1 and House Bill 2, the biennial budget package.
Those bills will affect the lives of nearly every citizen and visitor to the Granite State for the next two fiscal years from low-income people needing health services to tourists buying liquor at the interstate rest areas.
A governor’s two-year budget proposal is a blueprint the House and then the Senate follow as they develop the exacting details.
The governor shows legislators what his or her priorities are and they can agree, disagree or kind of agree and then they do the hard work of making the line items fit the vision to reality.
By law, governors have to propose and lawmakers have to approve a balanced budget and that is difficult in bad economic times requiring creativity to stretch the boundaries of financial transparency.
In the 2011 session, state revenues had fallen through the floor and Gov. John Lynch’s proposed budget reflected the dire economic times with some questionable revenues. The GOP-controlled legislature with a veto-proof majority managed to balance the budget by slashing funding for higher education and social services and turning the Medicaid Enhancement Tax the state used for two decades to garner billions of federal dollars into a real tax. The hospitals that pay the tax and receive most of it back, sued and it did not end well for the state.
The last three or four budget cycles have been a different story. The problem is not balancing the books, but deciding which agencies should receive additional funding, but not enough to create new unsustainable programs in an economic downturn.
Listen carefully Thursday; you never know what could affect you in the next two-year budget plan.
Distant Dome by veteran journalist Garry Rayno explores a broader perspective on the State House and state happenings for InDepthNH.org. Over his three-decade career, Rayno covered the NH State House for the New Hampshire Union Leader and Foster’s Daily Democrat. During his career, his coverage spanned the news spectrum, from local planning, school and select boards, to national issues such as electric industry deregulation and Presidential primaries. Rayno lives with his wife Carolyn in New London. InDepthNH.org is New Hampshire’s only nonprofit, online news outlet dedicated to holding government accountable and giving voice to marginalized people, places and ideas. Garry Rayno may be reached at firstname.lastname@example.org