The New Hampshire House Finance Committee has this week to finalize its version of the state’s next two-year spending plan, as they work under the pressure of significant fiscal challenges, including the expiration of millions of dollars in federal aid tied to the pandemic, an uncertain economy, and the spectre of further deep cuts to federal aid programs.
When she presented her state budget in February, Gov. Kelly Ayotte stressed the need to “recalibrate” state spending, but the Republican-led Legislature appears poised to take even more dramatic steps than Ayotte proposed in her plan.
Budget writers Monday debated and voted — almost entirely along party lines — on an array of spending reductions that, by weeks’ end, are expected to cut more than $200 million from Ayotte’s proposal.
“It’s not easy; we are where we are,” Rep. Dan McGuire of Epsom said.
The proposed reductions to Ayotte’s budget span state government. Under the plan taking shape this week in the House Finance Committee, the University System of New Hampshire’s budget would be cut by about $80 million, including $50 million to UNH alone.
“The governor did not cut very much,” Rep. Daniel Popovici-Muller of Windham said, justifying the cuts approved Monday.
The state’s public university system isn’t alone in getting less money than Ayotte envisioned.
The state court system is being asked to find $8 million in savings under the House's proposed budget.
Executive branch agencies — ranging from the Department of Corrections to the Department of Justice — will also be asked to make do with less. Corrections faces a more than $20 million reduction and the elimination of more than 100 jobs. The Attorney General’s office is seeing its budget trimmed $15 million.
Cutting agencies, raising fees
The budget backed by the GOP-led Finance Committee also eliminates or shifts some government functions. The Office of Child Advocate would be abolished, as would the State Arts Council and the New Hampshire Human Rights Commission. The State Liquor Commission, meanwhile, would no longer police violations of state alcohol laws.
The Finance Committee’s proposed spending plan also relies on boosting numerous state fees, including ones collected by the Department of Environmental Services, New Hampshire Fish and Game, and the Department of Safety. Lawmakers said many state fees haven’t been increased in years.
House budget writers are also backing a new 5% assessment on the state’s dedicated funds, which they say will net the state a quick $30 million.
“This will not impact the current fund balances of any of those funds,” Rep. Keith Erf of Weare told colleagues.
Like Ayotte’s budget, the Finance Committee’s plan also banks on fresh gambling revenue, including from video slot machines that are not yet legal in New Hampshire. The committee is also betting on more money from KENO. The House’s plan would end the requirement that local voters approve before KENO gambling can take place in their communities.
Redefining ‘local control’
Local control was a recurrent flashpoint as the committee debated the budget Monday.
“It really concerns me that we are going to attempt, from the state end, to cap what people can do in their own towns to answer the call of their families,” Rep Karen Ebel of New London said when debate turned to a GOP amendment that would cap local school budget growth to the rate of inflation.
“A cap would result in underfunded schools remaining underfunded,” added Democratic Rep. Kate Murray of New Castle.
Democrats also unsuccessfully fought a Republican provision to end restrictions requiring students to live in the district when they attend public school. The change would essentially allow any student in New Hampshire to attend school in whatever district they choose.
The committee’s budget deliberations continue Tuesday, when lawmakers will debate funding for the Department of Health and Human Services, which accounts for about 40 percent of all state spending.
Lawmakers are expected to consider $150 million in cuts from Ayotte’s budget plan, including more than $50 million in cuts to state payments to Medicaid providers, and about $30 million in reduced funding for services for people with developmental disabilities.
Deeper reductions may be in the offing. The Trump administration announced last week it was pulling back $80 million in public health aid tied to the pandemic that the state believed would be available through next year.
Lawmakers are also expected to debate imposing fresh limits on programs that touch DEI policies. One amendment that circulated Monday would “prohibit” state or local government entities from engaging in “any DEI-related initiatives, programs, training or policies.” A separate proposal would meanwhile change the name of the state’s Office of Health Equity to the Office of Health Access. It would also insert language from the state’s so-called “Divisive Concepts” law into the budget. That 2021 law aimed to restrict certain teachings on race or sex in New Hampshire classrooms. A federal judge ruled last year that the law was unconstitutionally vague.
