Published DateLACONIA — The five members of the New Hampshire House of Representatives who represent the city, accompanied by Senators Andrew Hosmer (D-Laconia) and Jeanie Forrester (R-Meredith), told the City Council this week that although they do not expect the Legislature to transfer significant costs to municipalities this session, the outcome of the biennial budget process is far from clear.
A change in the distribution of state aid to education, which was legislated in 2011 but will be implemented in fiscal year 2014 beginning July 1, 2013, will have the greatest impact on the city. Rep. Beth Arsenault, a Democrat representing Laconia and Belmont who serves on the House Education Committee, explained that the formula for allocating funds, which includes a premium for students eligible for free and reduced-price lunch, was changed. Originally the amount of the premium increased with the proportion of the enrollment who qualified for meals program and was multiplied by the number of students enrolled to calculate the grant. Beginning in July, the premium, approximately $1,750, will be multiplied only by the number of students qualified for free and reduced-price lunch. As a result state aid for the Laconia School District will shrink by $483, 281, from $6,436,432 to $5,953,151.
Rep. David Huot, a Democrat with a seat on the House Finance Finance Committee, explained that the budget process is overshadowed by questions about revenue projections and expanding Medicaid. Governor Maggie Hassan included $80-million in revenue from the introduction of a casino in her budget, but Huot said that because "gambling is not a foregone conclusion," the House Ways and Means Committee has not included the revenue in its projections. In the past gambling bills have won majorities in the Senate, but never in the House.
Hosmer noted that "it is early to speak of specifics," but ventured that "gambling is on a collision course with the gas tax," referring to the 15- cent hike in the levy that carried the House last week. He expected the Senate to authorize casino gambling, adding that the legislation provides that the proceeds will be shared between education and roads and bridges as well as funding for economic development in the North Country. "The gas tax lags in the Senate and gambling lags in the House," he said. "Remove the $80-million and the governor's budget may collapse on itself."
As if to highlight the differences, when Rep. Frank Tilton, who was among a number of Republicans to vote for the increased gas tax, said that 12-percent of the revenue would be earmarked for cities and towns and Laconia would receive $1.1-million over 10 years.
Forrester, herself no champion of gambling, countered that city residents would pay an extra $8-million in gas taxes during the same period.
In response to a question from Councilor Brenda Baer (Ward 4) Huot said that the Legislature is seeking to restore a measure of Medicaid funding to hospitals, which is a matter of litigation in federal court, but the issue hinges on the decision of whether or not to expand Medicaid. "There are disadvantages to doing nothing, doing something or doing a lot," he said.
Councilor Henry Lipman (Ward 3) asked about economic development initiatives. Hosmer said that the Senate unanimously voted to double and make permanent the research and development tax credit for businesses and that an effort to rewrite the corporate code for the first time in 20 years is underway. Forrester said that she had considered filing legislation to prepare a 10-year economic development plan, but after hearing from the business community that health care, infrastructure and education are its highest priorities, decided to introduce the bill next year.
Tilton, who has a hand in the capital budget process as a member of the House Public Works and Highways Committee, said that he hoped to include funding for another academic building at Lakes Region Community College, which would would house the culinary arts program. However, he anticipated that the capital budget would be less than $125-million and that the highest priority is the construction of a new women's prison estimated to cost $38-million.
Councilor Bob Hamel (Ward 5) asked after a bill to reopen an office of the Department of Motor Vehicles in Belknap County. Rep. Bob Luther, who picked up the baton from the original sponsor and fellow Republican Harry Accornero when he lost his seat, said that the House killed the bill.
"It was a money issue," he explained. "They sent to director of the DMV to shoot me down and he was overqualified for the job."