Republican negotiators in the House and Senate have agreed on a state budget proposal — one that Gov. Kelly Ayotte says she can’t support.
But before the budget even gets to Ayotte, the compromise will face uncertain up-or-down votes from the full House and Senate next week. Republican lawmakers scrambled Thursday to insert last-minute provisions they hope will allow their plan to survive those votes as the budget’s future remains in serious doubt due to the opposition of both Ayotte — a first-term Republican — and Democratic lawmakers.
“If this budget were to come to me now, I couldn’t support it and would have to veto it,” Ayotte told WMUR Thursday.
Before the plan was even finalized, Ayotte repeatedly criticized it for not fully restoring the pensions of 1,500 police officers and firefighters whose benefits were altered by a 2011 law passed to improve the solvency of the state’s retirement system.
Ayotte’s advocacy for those public workers became a recurrent theme of the past week: She joined first responders for an impromptu rally Tuesday outside the Legislative Office Building. On Thursday, she criticized lawmakers for declining to join her in supporting spending $27.5 million a year for the next decade to benefit affected retirees.
‘We need a budget that serves all of New Hampshire, and this budget falls short of that promise,” Ayotte said.
By midweek, Democrats had joined Ayotte’s criticisms. Democratic budget writers in the House and Senate refused to sign onto the committee of conference plan, and caucus leaders impugned Republicans’ integrity.
“Republicans are suddenly abandoning their promises. It is abhorrent to treat our first responders this way,” House Democratic Leader Alexis Simpson said Wednesday.
GOP leaders countered that their spending plan was realistic given financial realities.
“This budget is a win for New Hampshire families — our priority,” said House Speaker Sherman Packard. “The Group II retirement proposal is better than what these folks have today, and it is what's currently possible with funding limitations, while balancing the needs of everything else that gets state funding.”
But all the criticism from Ayotte and Democrats — and real concerns that conservatives in the House will oppose the budget for spending too much money — spurred negotiators on a joint committee of conference to make last minute changes Thursday, in the hope of building the coalition this budget could need when it goes for votes before the full House and Senate next week.
“We’ve heard a lot in the last 12 to 24 hours,” said House Deputy Majority Leader Joe Sweeney. “I think there was just a little more room that we needed for both chambers, to get to 201 in the House and 13 in the Senate, to get to an agreement.”
Late changes to broaden support
The changes adopted without debate by House and Senate negotiators Thursday included trimming — from 23 years to 22 years — the length of service requirement for police and firefighters affected by the 2011 change to collect a full pension. Negotiators also moved to repeal the state’s car inspection requirement starting in 2026.
Other changes reversed an $18.8 million cut to services for people with developmental disabilities, and restored the budget’s so-called Momnibus policies, which include coverage mandates for an array of services for mothers and children under the state’s Medicaid program and private insurers.
The committee of conference budget spends $52.5 million to reverse the 3% rate cuts to Medicaid service providers backed this spring by the House. The plan also adds back $37.8 million in mental health and developmental services funding. It restores money the House cut for family planning programs, allowing the program to leverage federal grants.
Health and Social Services, Corrections
The committee of conference budget also requires New Hampshire residents insured through Medicaid to pay premiums, at a flat rate per person. The budgets backed by Ayotte and the House also included Medicaid premiums, at variable rates pegged to income.
The budget restores the state Office of Child Advocate, which had been eliminated by the House. The Senate proposes funding the office at $1.6 million, but would trim the office’s staff. It would also make the Child Advocate post subject to Executive Council confirmation.
The committee of conference proposal restores more than 100 jobs at the Department of Corrections — positions originally cut by House budget writers. But the plan asks that agency to find $10 million in savings.
Higher education
This budget would send $85 million a year to the state University System, which includes the University of New Hampshire, Plymouth State and Keene State.
The amount represents a reduction from USNH’s current budget, but largely reverses deep cuts proposed in the House’s budget, which slashed $50 million in University System funding — a more than 30% reduction from what Ayotte proposed spending in her budget.
School funding
The committee of conference budget retains the current education grants for school districts at $4,351 per pupil, with additional funding for students eligible for free and reduced-price meals and special education services. But some districts will see funding swings. Manchester, for instance, would lose $10 million in state aid – a loss Ayotte and Mayor Jay Ruais have both criticized.
The budget also envisions the expansion of the state’s voucher-like Education Freedom Account program, making it open to 10,000 students regardless of their family income. siblings of current EFA students, who must be from families with incomes no higher than 350% of the federal poverty level — or about $113,000 for a family of four — would gain automatic enrollment, irrespective of the 10,000 student limit.
Diversity and equity initiatives
The committee of conference budget retains provisions to prohibit diversity, equity, and inclusion initiatives in all public schools and state-funded colleges and universities.
The budget backed by the House aimed to go further, by blocking state agencies and municipalities from entering into contracts that include provisions “that classify individuals based on race, sex, ethnicity, or other group characteristics for the purpose of achieving demographic outcomes.”
Public retirement benefits
Pensions for so-called “Group II” public employees — which includes police officers and firefighters — have been a fraught issue for some time. Like the budgets proposed by Ayotte and the House, the Senate budget would restore pension benefits now denied to 1,500 first responders hired before 2011 but whose pensions didn’t vest until after 2012 . But unlike Ayotte and the House, the Senate’s plan would have delayed the pension change for six months, a move budget writers in the Senate say will save the state $7 million.
The total cost of the pension change is $27.5 million a year.
When Ayotte included the pension change in her budget, she tethered its funding to legalizing video slot machines at the state’s charity casinos. The House, meanwhile, didn’t link any Group II pension change to a specific revenue source. Senate GOP leaders repeatedly raised concerns about the fiscal implication of restoring Group II benefits this year, especially if new policies didn’t bar workers from “spiking” their retirement payouts by counting unused sick time and vacation as compensation to boost their pensions.
