CONCORD, N.H. — The House Finance Committee made its final recommendations for the state budget Thursday, sending a package to the full House that significantly cuts spending from Gov. Kelly Ayotte’s proposal, as lawmakers eye low revenues from New Hampshire business taxes.
House Bill 1 and House Bill 2, which have spent weeks in the House committee, will next go for a vote before the full House April 10, and then on to the state Senate. The final budget bills will not emerge until June.
The House Finance Committee’s proposal reflects a sour outlook on tax revenue for next year — and a difference of opinion between lawmakers and the governor’s office.
At the beginning of the process, House Finance Chairman Ken Weyler said that his committee would need to make nearly $800 million in cuts to Ayotte’s budget in order to get it in line with the revenue projections of the House Ways and Means Committee.
The committee passed a budget that achieves that balance, imposing a number of cutbacks to make it happen. Democrats slammed the proposal, and Republicans defended it, arguing that the circumstances required hard choices.
“This was a very difficult budget,” Weyler said. “The economy that has happened in the last few years has been terrible. (There has) been mismanagement caused by the decisions in Washington, D.C., that have affected us all, and it has lowered the amount of revenue we expected. Obviously, that’s a reason that we have to cut the budget, because the revenue just isn’t there.”
Rep. Mary Jane Wallner, a Concord Democrat and a former chairwoman of the committee, said, “This budget will have devastating and long-lasting effects on the neediest in our state, and for many more reasons, the minority will vote no.”
Lower revenue projections
The House committee expects New Hampshire will start the next two-year budget period with a bigger revenue shortfall than Ayotte does.
Ayotte’s budget anticipates the state being $81 million behind expectations, but the House projects a $149 million hole. That would require the House budget to draw $149 million out of the state’s Rainy Day Fund, which currently has a balance of $293 million.
To make up for that gap, the House proposes spending less year to year than Ayotte’s budget.
It would spend $3.7 billion from the general fund as opposed to Ayotte’s $3.9 billion. And the House budget would shrink the amount spent by the Education Trust Fund; Ayotte has proposed $1.3 billion per year and the House has proposed spending an average of $937 million per year. Under the House proposal some of that education spending would continue in the General Fund.
To achieve those reductions, the House has recommended a series of cuts.
Cutting state positions
Much of the reduced spending in the House proposal comes from eliminating positions at New Hampshire departments and agencies. But Weyler stressed that most of those positions are currently vacant.
The House budget would cut five positions in the Secretary of State’s Office; three in the Insurance Department; 34 in the Liquor Commission; 190 from the Department of Corrections; 14 from the Department of Business and Economic Affairs; eight from the Department of Natural and Cultural Resources; 27 from the Department of Education; and eight from the Department of Safety.
The budget would also institute “back of the budget” cuts to a number of departments — broad reductions that are not targeted to a position or program, but which the agencies must incorporate into their own spending by cutting programs and terminating positions internally.
That includes cuts of $7.9 million to the judicial branch, $600,000 to the Department of Natural and Cultural Resources, $6 million to the Department of Environmental Services, $1 million to the legislative branch, $100,000 to the governor’s office, about $8.7 million to the New Hampshire Retirement System, $14.7 million to the Department of Justice, $10 million to the Department of Information Technology, and $46 million to the Department of Health and Human Services.
Eliminating the child advocate
In addition to paring down state agencies, the House budget would eliminate a number of smaller agencies in the state, a move that Republicans say is difficult but necessary. Democrats denounced the moves.
Most prominently, the committee has recommended getting rid of the Office of the Child Advocate, the watchdog agency created under the governorship of Chris Sununu that monitors the Division for Children, Youth, and Families after a series of child fatalities a decade ago.
The committee also recommended axing the State Council on the Arts, which provides grants to local arts programs. It also called for the repeal of the Human Rights Commission, an independent agency that hears civil rights and discrimination complaints and can make recommendations for prosecution to the Attorney General’s Office.
It would ax the state’s right-to-know ombudsman, who adjudicates disputes over public records laws to avoid parties needing to go to court, and the Housing Appeals Board, the newly created panel to speed up planning and zoning board disputes between towns and developers.
And it would cut the Office of Early Childhood Education within the state’s Department of Education.
Cuts to university system
The House budget would reduce state spending on the University System of New Hampshire by $50 million over the two-year budget. It would also eliminate the Governor’s Scholarship Fund, cutting $5.4 million over two years.
The community college system would receive a $4 million cut in funding.
Other programs cut by the House Finance Committee include the state’s family planning program, which provides funding to health centers for testing for cancers, sexually transmitted infections, and other health care. The committee has proposed cutting the $839,000 per year appropriated in Ayotte’s budget.
The budget would also reduce spending in the state’s Medicaid program by $52.5 million in two years, a 3% reduction to providers. HB 2 would prohibit Medicaid from paying for circumcisions, a long-sought goal for Republicans.
And the budget would also level fund the amount it distributes from the meals and rooms tax to cities and towns to $137 million a year, rather than a percentage amount, which amounts to an $11.2 million cut.
Expanding private school vouchers
While Ayotte had a more conservative approach to expanding universal education freedom accounts — removing income limits only for students who are already in public schools, starting in 2026 — the House has a more expansive approach. The House’s version would expand the income eligibility from 350% of the federal poverty level to 400% in the next school year, and then would make them universal in the 2026-2027 school year.
The House budget also includes “open enrollment” legislation to allow residents of New Hampshire to attend any public school in the state that has capacity, even if they do not live in that school district. And it included legislation that would cap the amount that local school boards could increase their budgets and require a three-fifths majority vote by school district residents to override that cap.
Meanwhile, the committee is keeping Ayotte’s mandatory cell phone ban in New Hampshire schools, but it is removing the governor’s grant program intended to help schools implement that policy. The House’s version of the committee also expands on the exemptions: Rather than just applying to students with disabilities, the exemptions also apply to students with medical needs such as insulin pumps and glucose sensors.
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