The N.H. House and Senate managed to come to an agreement Wednesday about New Hampshire’s budget—sort of.
They agreed, at least, to keep trying to agree on how to achieve about $300 million in savings and/or new money to balance the state budget by the middle of next year. They almost threw in the towel in defiance of one another, in which case Gov. John Lynch would likely have called them into special sessions this summer. Instead, they formed a Committee of Conference just in time to meet the deadline for doing so.
Actually, they formed two Committees of Conference—one each for Senate Bill 450 and House Bill 1128.
Those two bills have become the de facto budget bills in recent weeks, as a string of cost-cutting or revenue-producing amendments was added to each. But the Senate rejected the House’s amendments to SB 450, which included new taxes, and the House rejected the Senate’s amendments to HB 1128, which included expanded gambling.
House and Senate leadership overcame the resulting impasse with a private deal that technically created two Committees of Conference—one each for SB 450 and HB 1128. But the leaders also agreed to assign the same lawmakers to both committees and to select only one bill that would ultimately contain the compromise, although provisions from both bills are eligible for inclusion. So, in essence, the two Committees of Conference will function as one.
House Speaker Teri Norelli (D-Portsmouth) and Senate President Sylvia Larsen (D-Concord) held a coin toss—yes, literally—to determine who would get to select which bill they would work from. The House won, and HB 1128 it is.
Coin toss aside, the Committee of Conference is a compromise process used for any number of bills the House and Senate can’t agree on in a given session. No less than 65 Committees of Conference were formed last week, and they all have just one week to work, with reports due May 27. Lawmakers then get another week to mull over the reports before casting final votes on pending legislation on June 2.
If all goes well, they can meet the budget, break for summer recess and gear up for this fall’s state elections.
different approaches
Gambling is the most notable difference between the House and Senate proposals to balance the budget, but it’s hardly the only one.
The House plan would suspend catastrophic aid and medical education payments to hospitals and suspend the catastrophic illness and senior volunteer grant programs in the Dept. of Health and Human Services. Revenue from meals and rooms taxes normally shared with cities and towns would be reduced by more than $6 million, and the state’s contribution for benefits under the N.H. Retirement System would be reduced for the next fiscal year. Analysts predict either measure would create local property tax hikes.
Also, in fiscal year 2011, 12 furlough days would be required of all state employees.
Several tax changes would also come from the House. Electricity taxes would be paid by electricity generators rather than consumers. Insurance premium taxes would go up to 2 percent for all lines of insurance (up from 1, 1.25, 1.5, and 1.75 percent). And an 8 percent estate tax would be imposed on properties worth more than $2 million after allowable deductions. The estate tax is applied when real estate is transferred after a property owner’s death.
The Senate, on the other hand, would not only expand gambling, but also require the Judicial Branch to cut its budget by an additional $2 million. It would also send $2.7 million to the Department of Health and Human Services for child care services as part of a move back to a cost-sharing model based on costs per family rather than costs per child.
Finally, the Senate plan would create a new commission to study ways the state could make money by leasing or selling off some of its assets, enterprises or resources.
common ground
In spite of these differences, about 44 provisions are the same in both SB 450 and HB 1128. They include giving permission for cities and towns to impose their own local meals and rooms taxes.
This common ground will form the Committee of Conference’s starting point, but really, anything is on the table—whether it’s part of what the House or Senate has already approved this year or not.
That openness may prove tricky, as history shows in the very bills at hand. Both contain the repeal of last year’s application of the meals and rooms tax to campsites, along with clarification that limited liability companies can only be taxed for interest and dividends if the LLC has transferable shares.
