LACONIA — With the Legislature set to adopt its 2016-2017 state budget and Gov. Maggie Hassan set to veto it, two of its principal architects — Sen. Jeanie Forrester (R-Meredith), who chairs the Senate Finance Committee, and Senate Majority Leader Jeb Bradley (R-Wolfeboro) — have taken to the road in defense of their handiwork.
With the House and Senate expected to approve the budget on Wednesday. Forrester and Bradley spoke to the Laconia Daily Sun yesterday, just days after the legislative leadership announced they would introduce a continuing resolution to avert a government shutdown and the governor urged them to return to bargaining table.
Bradley said that the differences with the governor primarily turned on three issues — the Legislature's determination to reduce business taxes, failure to fund a pay raise negotiated with the State Employees Association and unwillingness to fund the Health Protection Program, which expanded Medicaid.
He stressed that the Senate, with several more months of tax receipts than the House, was able to increase revenue projections by about $120 million and restore many of the cuts to the governor's budget made by the House.
The increased revenues identified by the Senate include increasing the surplus carried forward at the close of the current fiscal year from $34 million to $49 million, while at the same time adding about $13 million to the rainy day fund. The governor has voiced misgivings about both projections.
Forrester, who chairs the Senate Finance Committee, noted that the Senate added $18 million to the appropriation for substance abuse treatment, bringing the total to $42 million, which will be supplemented by $2.5 in federal funding in each year of the biennium. She acknowledged that the $6.7 million appropriated for the treatment of alcohol abuse is less than the $9 million recommended by the governor and the $17 million stipulated by statute, but it is $2.7 more than has ever been directed at the problem.
The budget, Forrester continued, includes a 5 percent increase in the reimbursement rate paid to home health care providers, like the visiting nurse associations and Granite State Independent Living, the first increase since 2004. Bradley remarked that despite an 8 percent increase in the budget of the University System of New Hampshire "they're still mad at us."
"It's a good budget," Forrester insisted. "We've made a lot of compromises."
However, neither senator indicated a willingness to forego reductions in business taxes, to fund the state employees contract or commit to reauthorizing the Health Protection Program.
Forrester said that the Senate decided to reduce business taxes only at the end of the budget process when funds were allocated for other important responsibilities. Although the governor claims the reductions will diminish state revenues by $90 million, Bradley said that claims the cuts are not paid for are not true. He said that Business Profits Tax would be reduced from 8.5 percent -- the highest rate in New England and among the highest in the country -- to 7.9 percent, one-tenth of 1 percent below the rate in Massachusetts, over seven years.
""It's not a philosophical issue," Bradley. "It's a practical issue, a competitive issue." He said that the lower rates would help contribute to retaining and expanding local businesses, adding: "We've never said it's a silver bullet, never tried to oversell it." At the same time, he said that the Senate has taken steps to reduce the cost of workers compensation, electric rates and health insurance to improve the business climate.
Forrester emphasized that measures to ensure local businesses remain competitive are necessary because the private sector generates much of the revenue required to fund the programs and services offered by state government,
Bradley said that the Senate has offered to fund the state employees contract in the second year of the biennium, beginning on July 1, 2016. "The Senate is open-minded to funding the pay raise," he said. "The Republicans are not averse to this, but it's hard to shoe-horn $30 million into the budget."
Both Bradley and Forrester played key roles in introducing the Health Protection Program, which divided the Republican majority and carried the Senate by controversial bipartisan vote in in the Senate last year. The program is set to expire on Dec. 31, 2016. Rather than reauthorize it as part of the biennial budget process, the Republican majority in the Senate preferred to evaluate tits operation and address its reauthorization next year in separate legislation. Bradley said that he intended to sponsor such legislation, adding: "I hope it will be reauthorized."
"I'm cautiously optimistic," said Forrester, who expressed concern about the future of the federal funding to operate the program as it was designed. She also wanted to review the program to ensure that it reduces the shifting of health care costs from the uninsured and under-insured to the private insurance market. "I want to see the numbers," she said.
Anticipating that the governor will veto the budget and conceding the Legislature lacks the votes to override her veto, Bradley said that a continuing resolution will be introduced to keep government operating at current levels for six months. "No one wins in a government shutdown," he said.
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