CarriageTowneNews.com, Kingston, NH

April 11, 2013

My Opinion: April 11, 2013

By NH State Representative L. Mike Kappler
Carriage Towne News

---- — RAYMOND —When our legislators act irresponsibly, like they did in passing HB-1 and HB-2, we all have to pay the price. With about 40K people in NH looking for work, the passage of these bills will add an additional $39M out of our small businesses that could have been used to create jobs and grow business. This budget was balanced on very unrealistic revenue estimates, and in the long run will really cost businesses and the taxpayers of New Hampshire. New Hampshire had been in the 47-48 of fifty worst states in the nation for business taxes, but the current Republican budget was starting to turn this trend around. The budget the House passed will reverse this trend.

Let me start by saying, this is my HB-1 and HB-2 budget information, to the best of my knowledge. The budget was passed by the House and now goes to the Senate for changes. The final vote on the approved and amended budget probably won’t be until June.

While our working families are cutting back, and making some very serious family and business decisions, we cannot truly support the growth of state government. Not only that, we deserve an honest, open discussion about all the costs in the budget. This budget includes over $600M in spending authorization that is not included in the actual budget, HB-1. The House Democratic leadership wants everyone to believe that the budget is $11.1B, but actually it’s $11.7B and grows the state government by 16%, not the 10% they claim.Why is the House hiding this $600M? Can you and your family afford to pay this increased 16%? I can’t.

This budget relies on rosy estimates, about $31M more than the conservative estimates by those with exceptional track records, like Rep. Major. If you remember back when the Democrats did the 2009-10 budget, it required a special session of the legislature to correct the problems.

The House budget pushed through by the Democrats includes:

- a 10.2% increase in spending over the 2012-13 budget;

- $263M in increased taxes (gas, tobacco, etc.), business tax audits, and suspended tax reforms (Note: this 12 cent gas and diesel tax is expected to amount to roughly $95M, and is not in the budget. Why? It’s banking on $17M in a one-time tobacco settlement which we may not get. It also relies on $60M coming in from the 30 cent tobacco tax increase, and $14M by suspending business tax reductions scheduled to become effective 7/1/13);

- $31M in inflated revenue estimates; over 5% growth in state government per year, at a time when the economy is only growing at 2%, at best;

- Highway fund diversions grows to $28.5M whereby 67.3% of Highway Funds will go to DOT, 37% to DOS, and 1.1% to other (these ratios are $500K more than the Governor’s budget);

- Section 130 of HB-2 transfers part of the legislature’s budgetary control to the Governor to deal with any budget deficit in the current budget. What a mistake! The Democrat majority’s surplus/deficit statement indicates the amount needed to actually balance this budget is $22.6M. It allows about 300 dedicated funds to be raided, by the Governor, to balance the budget, with only the Joint Fiscal Committee’s approval. That’s only ten people, five representatives and five senators, rubber stamped political appointments, able to make these bait and switch critical decisions, which I believe needs to come before the full legislature for approval. These dedicated funds include: LCHIP, Fish & Game, renewable energy funds, state park funds, dam maintenance funds, enhanced 911 funds, public boat access fund, conservation number plate fund, and unemployment compensation and employment services administration fund, and unemployment compensation fund, all of which are at risk.

- Downshifting costs: sends $7M increased costs to counties. Section 9 of HB-2 increases the so called “Ccp” the counties must pay for their residents’ nursing home and other long-term care services. The higher this cap, the more it costs the county property taxpayer, and the less is paid by the state’s general fund. This cap increase will cost the taxpayers of Rockingham County $140K in 2014 and $942K in 2015, for a biennium total of $1.082 Million.

- Expands Medicaid, under the Affordable Care Act and substantially expands the size of our state government by more than 5% per year, while the economy is growing only around 2%. As future federal funding drops, this will leave us holding the tab;

- School building aid moratorium. HB-2 Sect. 3: no school building aid or alternative school building aid for any project approved on or after 6/30/13 through 6/30/15. There is a long list of approved projects just sitting in limbo awaiting funding. There will be no money in FY 2014, but if, by chance, there is a surplus in FY 2015, some money may be available for these already on the list projects. Please, don’t hold your breath anticipating a surplus.

- Charter schools: HB-2 Sect. 88 limits the amount of money to fund existing schools, and Sect. 152 imposes a moratorium on new schools through 2015;

- No new money for innovative education options. HB-2 Sect. 91 repeals education choice scholarship, a program we just passed last term. Funding came from businesses, not the state, and went into a special fund that was credited against the business’s BET tax to help needy families. Program already raised $159K, with over 450 students applying. This was a special fund outside of government, and by repealing it, will cost the taxpayers more money.

- Purposely underfunds various departments. By giving less money than a department needs, they can then ask for more money from the Joint Fiscal Committee later as needed, without legislative approval;

- Budget intentionally underfunds at least two very important state function: about $4M shortfall in the line item for correction officers overtime at the state men’s prison, and about $1.2M in indigent parent defense funds. But it authorizes the Joint Fiscal Committee to tap any surplus, or increasing any deficit to cover the need, again without legislative approval.

- Increases University System of New Hampshire funding by over $47M over the current 2012-13 budget and also provides an additional $12M over the biennium in the event of a General Fund surplus.

- Increases the Community College System of New Hampshire funding by over $19M over the current budget.

- Restores the saltwater fishing license fee for individuals from the $10.00 we did this budget, back to the $15.00 amount the Democrats had in FY 2011.

- Supports changing the Liquor Commission from a three person commission to a single commissioner, appointed by the Governor and approved by the Executive Council.

The Republicans attempted to pass sixteen amendments to reduce this unbalanced, unsustainable, unrealistic nightmare to no avail. All sixteen amendments were defeated, straight down party lines. I hope I haven’t bored you; we tried our best to amend this disaster, but we could not. The only thing I can say now is it’s your tax dollars the Democrats are recklessly spending. The budget bills now go to the Senate. Now’s the time to call your Senators and let them know your concerns.

(Editor’s Note: NH State Representative Mike Kappler can be reached at l.mikekappler@comcast.net)