Lots of winners in proposed state budget. That could change Thursday.
The House Finance Committee is proposing increasing the existing state budget by $2.4 billion over two years. That’s a bigger increase than Gov. Chris Sununu proposed. (Screenshot | NHFPI)
This story was updated Wednesday, April 5 at 9:30 a.m. to correct the amount of money proposed for a new hockey arena at the University of New Hampshire.
The budget headed for a House vote Thursday has good news for parents, state employees, certain retirees, wealthier Granite Staters counties, and dozens of agencies that rely on Medicaid. Others, like backers of professional licensing reform, will be disappointed.
The House Finance Committee is recommending a $15.76 billion two-year budget, about $180 million higher than the one proposed by Gov. Chris Sununu. The committee’s budget is also higher than the $13.36 billion current budget by about 18.8 percent.
The University of New Hampshire would lose $2 million of the $8 million the governor proposed for a new hockey arena, but University System of New Hampshire would get $2 million for general support in fiscal year 2025. The prison would lose out too, about $40 million for a new prison. In a bipartisan vote, the House Finance Committee scrapped nearly all of Sununu’s proposal to eliminate 34 professional licenses.
The House must vote on its budget by Thursday. The Senate has until June 8, less than a month before the new budget is set to take effect. Expect changes along the way. Lawmakers have already filed nearly a dozen amendments to House Bill 2, the policy piece of the proposed budget, and one to House Bill 1, the financial portion.
Phil Sletten, research director at the New Hampshire Fiscal Policy Institute, summed up the 200-plus pages in HB 1 and 2 in 50 slides during an online webinar Tuesday. Here are a few groups that stand to gain – for now.
State employees and retirees
- The budget retains the 12 percent pay raise the governor proposed for state employees; they’d get 10 percent the first year and 2 percent the second. That saw broad bipartisan support from House Finance Committee members, including Democrats who voted against the budget for other reasons.
- Approximately 1,860 state and local fire and law enforcement employees would see an increase in retirement benefits over the next 10 years. That group saw their benefits reduced under a 2011 change to the New Hampshire Retirement System. This would adjust the start date of those changes and entitle them to a refund of lost retirement pay.
- Future employees of the Community College System of New Hampshire would lose out on state retirement benefits existing workers receive. Employees who start after Jan. 1, 2024, would no longer be eligible for state retirement. Rep. Mary Heath, a Manchester Democrat, has sponsored an amendment that would eliminate that provision.
- Currently, Medicaid coverage for postpartum care ends at 60 days. The budget would extend that to a year.
- Many more students would be eligible for free or reduced-price meals under the proposed budget.
Currently, students whose household income is 130 percent of the federal poverty level qualify for free school meals; those whose household income is between 130 and 185 percent of the poverty level are eligible for reduced-price meals.
The proposed House budget would raise the eligibility threshold to 300 percent of the federal poverty level, increasing the cap for a family of four from about $55,000 to about $83,000; those amounts will likely increase next school year. The budget would also make it much easier for qualifying students to receive free or lower-cost meals by automatically enrolling students whose families receive Medicaid. To qualify for free or cheaper meals now, a parent or guardian must submit paperwork listing their household income, how often they get that money, and any other support.
It’s proven a barrier for hundreds of families. Laura Milliken, executive director at New Hampshire Hunger Solutions, told the Bulletin last week the change could add an additional 7,000 students to the program who are already eligible for free or reduced-price meals.
The state’s 10 counties must pay part of the Medicaid payments for recipients receiving care at county nursing homes and in-home or community-based services through the Choices for Independence Program. Typically, that cost increases each year.
The House Finance Committee is recommending that contributions stay flat at this year’s rates. That puts less pressure on county taxpayers, Sletten said.
The House Finance Committee, like Sununu, proposes lowering taxes on individuals. But the committee and the governor recommend different approaches.
Sununu called for eliminating the communications tax, a tax on landline and cell phone calls that brings in about $29 million a year. The House Finance Committee wants to keep that tax and instead speed up the elimination of the Interest and Dividends Tax from 2027 to 2025, which brings in about $135 million a year.
The latter is paid for by wealthier households.
Sletten said that just over half that annual revenue came from tax filers with more than $200,000 in taxable income and dividends, which doesn’t include wages and other income. In a recent analysis of the interest and dividends tax, Sletten said someone who owed $10,000 in taxes would have to own between about $4 million and $13.4 million in wealth.
Organizations that rely on Medicaid rates for a significant portion of their budget say they cannot recruit or hold onto workers at the current rate. Two providers whose care allows people to age at home say they can’t pay workers more than $13.50 an hour.
Sununu included $34 million for a 3.1 percent boost in Medicaid rates. The House Finance Committee is recommending the House increase that to about $92 million. Finance committee Democrats pushed for even more of an increase to meet the $200 million providers said they needed.
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