Governors school aid plan draws rave reviews and pans

Gov. John Lynch asked lawmakers in a joint session yesterday to increase the annual state budget from $4.79 billion to $5.05 billion next fiscal year, followed by a $110 million hike for 2009. That’s a 7.5 percent boost phased in over two years, $300 million of it being non-discretionary. He axed $291 million from state agency requests in developing his package and trimmed 321 vacant job positions.

A 28-cent increase in the cigarette tax would raise an extra $45 million per year. Better receipts from current taxes would balance both yearly budgets without a sales tax, an income tax or a hike in the statewide property tax, the governor said.

“We estimated revenues carefully, assuming modest economic growth,” Lynch said.

Lawmakers had mixed reviews for the governor’s call to define an adequate education this legislative session based on the required curriculum and the school approval standards, but pay for that education later. As a stopgap for two years, Lynch advised giving every town its current school grant plus a 5 percent increase. That would buy time, he said, to develop a long-term aid formula. Lynch called for a related constitutional amendment to target aid to needy towns, but without letting the state renege on its obligation for education.

Rep. John Thomas, R-Belmont, warned the price of adequacy is probably close to $1.5 billion a year.

“Where do we get that kind of money without a total reorganization of the tax structure?” he asked.

Rep. Fran Wendelboe, R-New Hampton, called the governor’s projections for the business profits tax, the real estate transfer tax and business enterprise tax too optimistic.

House majority Leader Mike Whalley, R-Alton, feared a big gap between spending and revenue.

“We’ve been frozen out of seeing any revenue projections for weeks,” he said.

Senator Joe Kenney, R-Union, was concerned the governor isn’t saying what school aid will cost.

“That’s something I need an answer on,” Kenney said.

Sen. John Gallus, R-Berlin, said a mere 5 percent increase in state grants would hurt most of the North Country. Under current law its towns would be much bigger winners in the zero sum game of aid distribution.

“I hope we can change that idea,” Gallus said.

Rep. Betsey Patten, R-Moultonborough, asked how the state could afford the large spending package with just a cigarette tax increase.

“Do we go back to donor towns?” she asked. “I hope not.”

Rep. Gene Chandler, R-Bartlett, said the budget promises too much and will cost too much.

“Unless a lot of people take up smoking, we can’t pay for it,” he warned.

House Speaker Terie Norelli, D-Portsmouth, said the budget would get an intense review, not only in the Statehouse but also in four forums around the state. There is one next month in Lancaster.

“For ten years we’ve played the game starting with how much money we could afford,” Norelli said. “This time we do the first step first, define it.”

Litigants are gearing up to challenge the school aid law again. Steve Young, school board chairman in Londonderry, said his taxpayers face a sudden $2.1 million revenue hole in the budget that goes to voters next month. His town is the lead plaintiff in the lawsuit that made the current aid formula unconstitutional.

“Obviously, the governor has no respect for the Supreme Court and its decision,” Young said. “We’ll have no choice but go back to court and spend more tax dollars on litigation. If I ran my company this way I’d be out of business.”

Rep. Tom Buco, D-Conway, said the budget properly makes education its top priority.

“That’s a good thing,” he said. “Look at all the money for Head Start, alternative education, Operation Running Start, the universities and community technical colleges.”

Rep. Charles Clark, R-Gilford, said the high court would never sit still for two years on funding education.

“The whole issue of paying for it is down the road,” he said.

Gallus welcomed a $10 million item to begin construction of a 500-bed expansion of the prison in Berlin, but said it’s a $26 million project. He wasn’t sure what 38 percent of its budget would build.

“But it’s a start,” Gallus noted.

Rep. Rep. Robert Theberge, D-Berlin, said the construction and the new prison jobs would spur the local economy.

“The whole system is overcrowded and we have to expand it,” he said.

Lynch drew the longest of 35 ovations when he asked for $6 million each year for the popular Land and Community Heritage Investment Program. It now gets $1.5 million over two years.

Gallus praised LCHIP, but thought its money could go to the neglected park system and the unfinished ATV park in Berlin. He also called a $1 million item to begin rail transportation “feel good” legislation.

“That doesn’t go very far,” he said.

The Lynch budget would give 10,000 more children health insurance, reduce by half the wait list for services to the developmentally disabled, increase the rainy day fund from $69 million to $84 million, and spend $1 million toward reviving railroads in the southern part of the state.

The governor drew strong applause when he proposed spending an extra $27 million a year for alternative education programs to keep teens in school until age 18.

Whalley said the wait list should go now.

“There shouldn’t be one at all,” he said.

The budget would also replace $1 million in federal funds for AIDS and HIV patients the state is losing next month, create a $400,000 revolving fund to help the needy pay their rent security deposits, and set aside $400,000 in grants for towns trying to expand their stock of affordable housing.

Rep. Ed Butler, D-Hart’s Location, who is openly gay, praised the money for AIDS. He helped start one of the first AIDS treatment homes in the country.

“I hope that funding happens,” he said. “It would be sad to see us lose some of our AIDS programs.”

Rep. Buco, D-Conway, liked a $500,000 item to boost tourism because it would help the Mount Washington Valley.