LACONIA — Speaking to the City Council last night, State Senator Andrew Hosmer (D-Laconia) said that while lawmakers have been working throughout the summer to resolve the stalemate over the 2016-2017 budget, he could offer no assurance that an agreement would be reached by the time the Senate reconvenes on September 16.
In June, the Senate and House of Representatives adopted a budget, which Governor Maggie Hassan promptly vetoed. Without the votes to override her veto, the Republican majorities in both chambers adopted a continuing resolution that maintains state spending at the levels authorized in the prior fiscal year.
Hosmer, who serves on the Senate Finance Committee, told the councilors that there will be no significant impact on cities and towns other than deferring reimbursement of tuition and transportation payments for students attending regional technical centers cities and towns that could effect the cash flows of some municipalities.
In particular, Hosmer reminded the council said that the sale of the former Laconia State School property on North Main Street is included in the budget and said that it has not been and is not likely to become a bone of contention. The budget projects the transaction will return $2-million in revenue, which he presumed represents the asking price. The terms of the transaction require that the state first offer the property to the city.
Likewise, funding for construction of the automotive technology facility at Lakes Region Community College, Hosmer said, will not be affected by the budget impasse and work at the site will continue until the building is complete.
Hosmer suggested that the outstanding issues in the dispute over the budget are the Legislature's insistence on reducing business taxes — both the business profits tax (BPT) and the business enterprise tax — the governor's wish to fund the contract negotiated with state employees and sustain the program to expand enrollment in the Medicaid program, and disagreement about the amount of the surplus accrued in the last fiscal year to be carried forward in to the next.
The governor, Hosmer said, proposed a compromise that would have immediately lowered the BPT from 8.5 percent to 7.9 percent, but added 21 cents to the tax on package of cigarettes and $5 to the automobile registration fee. The funds, Hassan claimed, would be sufficient to fund the state employees contract and expansion of Medicail enrollment as well as increase funding for the New Hampshire Community College System, enabling the colleges to freeze tuition.
Although the governor's proposal was rejected out of hand., Hosmer said that "it moved the discussion forward" and noted that senators and representatives have been meeting "outside the media spotlight," which is conducive to "frank conversations." Hesitant to sketch the outlines of an eventual settlement, he did say that while he doubted the expansion of Medicaid would be part of a budget agreement he believed the program would be reauthorized in 2016. At the same time he expected the budget would include reduced business taxes.
Because of the uncertainty surrounding the amount of the accrued surplus that can be applied to the budget, Hosmer did not expect the impasse would be overcome until the unaudited financial report for the last fiscal year is issued in September. He explained that while revenues in the last fiscal year exceeded projections, expenses, especially at the Department of Health and Human Services, also exceeded expectations. Until all the bills are paid and the tally is complete, the amount of the surplus available to fund the 2016-2016 cannot be calculated.
"We've got a ways to go," Hosmer said.