U.S. Markets open in 7 hrs 18 mins

NH House passes $11B budget

Norma Love, Associated Press

CONCORD, N.H. (AP) -- New Hampshire's House passed an $11 billion, two-year budget package Wednesday that does not support legalizing a casino, a move that drew quick criticism from the governor and Senate.

Gov. Maggie Hassan, a Democrat, criticized the plan put together by the Democratic majority because the House cut spending rather than include the $80 million in her budget from licensing a yet-to-be-approved casino.

"We can address the challenges of the House budget by moving forward with a plan to license one high-end, highly regulated casino that will help us invest in our priorities," Hassan said in a statement.

Her call for the House to approve a casino was echoed by Senate Finance Chairman Chuck Morse, a Salem Republican and sponsor of a casino bill passed to the House last month.

Morse said the House budget relies on inflated revenue estimates as well as unnecessary tax increases on gas, diesel and cigarettes while passing the casino bill "would provide the state with millions in non-tax revenue allowing us to fund our priorities, from education to infrastructure, without increasing taxes on New Hampshire citizens."

The House's decision not to embrace gambling means the differences over revenue sources is likely destined to be settled in June, after the Senate passes its own budget.

Without the gambling revenues, House budget writers scaled back education aid, such as giving a smaller increase to the state's university system and putting off implementation of a new school construction program. It also offered less aid to the state's hospitals to offset Medicaid and charity care costs than Hassan had proposed.

The House proposal spends about $2.7 billion from state taxes, roughly a 4 percent increase over the current budget and $52 million less than Hassan proposed. The $11 billion budget when federal and other funds are totaled is 10 percent higher.

Democrats passed their package 194-172, largely along party lines. The House — regardless of whether Democrats or Republicans held a majority — has considered dozens of casino bills over the years but never passed one.

The House budget also contains a phased-in 12 cent hike in the gas and diesel tax to pay for highway improvements that Hassan has not ruled out as a funding source to fix deteriorating roads and bridges. The House went along with Hassan's recommendation to raise the cigarette tax 30 cents to $1.98 per pack to raise money for spending, overriding a Republican effort to limit the increase to 20 cents.

House Republicans offered more than a dozen amendments to increase spending on programs ranging from school construction to moving up the effective dates for business tax breaks Hassan and House Democrats would delay to save money. They proposed paying out less aid to the state's hospitals to foot the bill.

House Finance Chairwoman Mary Jane Wallner, D-Concord, said further reducing hospital aid would hurt the state's chances of implementing a managed care program.

"To make managed care work, we need the hospitals working with us, and if we don't reimburse them for uncompensated care, we probably won't find a partner willing to work with us," she said.

The state has been stymied in implementing a managed care program for Medicaid because the hospitals have so far refused to participate; ten of the state's largest hospitals are suing the state over the reimbursement rate.

Hassan had included more aid in her budget in an attempt to win the hospitals over and was critical of the House's decision to budget less for aid than she recommended.

Republicans also balked at giving Hassan authority to take money from programs with specific funding sources to close a possible deficit in this year's budget. The state has more than 200 dedicated funds for programs ranging from dam maintenance to land conservation. The budget package requires Hassan to get permission first from the 10-member joint legislative Fiscal Committee.

The House also defeated efforts to allow new charter schools and unlimited expansion of existing schools. The House budget establishes a moratorium on new publicly funded charter schools and limits on enrollment in existing schools.

The House also passed a $227 million public works budget for the next two years that contains money for a new 224-bed women's prison and transitional facility in Concord by the men's prison. The project would cost $38 million and is the largest single item in the proposed budget.