LACONIA — "There's a lot of common ground here," Gov. Maggie Hassan said yesterday. "There's a good deal to be had here. "The governor, a Democrat, last week vetoed the 2016-17 state budget adopted by the Legislature and this week said, "we're making the rounds because I hoped we'd have an agreed budget and we don't."
During an interview at the office of the Laconia Daily Sun, Hassan, who was accompanied by state Sen. Andrew Hosmer (D-Laconia), a member of the Senate Finance Committee, took aim at the budget adopted by Republican majorities in both the Senate and House of Representatives, which she called "unbalanced."
In particular, Hassan took issue with the Legislature's decision to reduce business taxes at the expense of more important priorities, which she believes will cripple future budgets by sapping revenues by $21 million in this biennium, $65 million in the next and $90 million in the one after that. "Ninety million dollars is a big number," she said, equal to the annual budget of the New Hampshire Community College System.
The governor recalled that the bipartisan budget adopted in her first term sought to expand employment and opportunity while stemming the loss of young people and protecting the state's low-tax environment by investing in infrastructure, higher education, mental health and substance abuse programs. Hassan noted that in 2014 the growth of the economy matched Massachusetts to set the pace in New England, and surpassed the national average. At the same time, New Hampshire enjoyed the lowest per capita tax burden in the country and was ranked the seventh most "business friendly" state by the Tax Foundation.
This year, Hassan said, the budget "passed in a partisan way." She said that the budget "double-counted" funding in 2015 by increasing the transfer to the revenue stabilization or "rainy day" fund by almost $12 million and the projected surplus by $15 million. Such "gimmicks," she said, "used in emergencies have become bad habits and within months will require cuts to balance the budget."
The governor said that she is not opposed to reducing business taxes, but added that she heard from business leaders that the development of a skilled workforce is their highest priority. She noted that the state has forgone revenue because of changes to the tax code introduced in 2010 and insisted "this is not the time to cut revenue. In the abstract we'd love it, " she continued, "but under the circumstances they're making the wrong choice."
Hassan said that she has suggested raising vehicle registration fees and the tobacco tax as well as closing loopholes in business taxes to pay for reduced business taxes, but has been rebuffed by Republican who refuse to increase any tax or fee.
Hassan said that she is also troubled by the failure of the Legislature to fund the contract negotiated with state employees and to ensure the perpetuation of the New Hampshire Health Protection Program (HPP).
The contract, she explained, was negotiated before she delivered her budget address in February, but the Legislature chose not only to withhold the necessary funding but also to defer implementation of the contract if the money was available.
Declining to reauthorize the HPP, the governor said, has created uncertainty about the health insurance of some 41,000 enrolled in the program, some of whom receive treatment for substance abuse and mental illness. At the same time, it has unsettled the health insurance market, which weighs on businesses contemplating the future cost of health insurance for their employees.
On the heels of Hassan's veto, the Legislature adopted a continuing resolution, which ensures that state government continues to operate with funding at the level of fiscal year 2015, which ends today. Although Hassan said she was "encouraged" by the continuing resolution, she said that "we must get back to the table." Funding programs and services at 2015 levels, she called "kicking the can down the road" and urged lawmakers to "return to the table sooner rather than later."
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