NH House Highlights

The 2010 legislative session started Wednesday with voting on bills retained from last year. The House was in a feisty mood and lengthy debate occurred on changes to House Rules even before we started on the bills. At the end of the day we had only voted on 14 bills and the Consent calendar. Wednesday was another bad day for NH Business struggling to afford health care as the NH House passed two additional insurance mandates. The first, HB561, would require insurers to pay up to $1500 every three years for hearing aids (209-157 vote) . The second (HB 569, passed 213-147) would mandate additional coverage for autism disorders, described by the majority report as “behavioral therapy, speech and occupational therapy along with already covered medications, health related services, and psychiatric services when they are part of a written plan ordered by a doctor…”. It is important to note that these changes only apply to private insurance which represents approximately 30% of those covered in the state. It does NOT apply to state employees, or to self-insured corporate plans. The bills go to the Senate for hearings.

We return next Wednesday to vote on the remaining bills. Hearing started in committees Thursday. Most committees have aggressive hearing scheduled. I will be providing updates on bills of interest as we progress. The business community is very angry with the 12th hour changes to how LLC’s are taxed. This provision was added late at night to balance the budget—the public did not have a chance to weigh in on the changes. There is a bill filed to repeal that provision and the public will have a chance to provide input. Finally, the health care debate in Washington will have a significant financial impact on the state on NH. Estimates are that the bill may cost the state $60 million in the next biennium, and even more in future years. This is a cost that we can’t afford given the estimated $500-600 million structural deficit going into the next budget year. This is a work in progress and needs to be watched closely.

There will be a legislative forum this evening, June1st, 6:30 p.m. held at Nashua High School North Auditorium. There will be four Republicans and four Democrats facing off to discuss the issues. Participants include myself, Rep. Carl Seidel, Rep. Peter Silva, and former Rep. Stephen Stepanek, Rep David Campbell, Rep Cindy Rosenwald, Senator Peggy Gilmour, and Senator Bette Lasky. The forum is to be moderated by Nashua Chamber President Chris Williams. Please join us and hear what is happening in the State of NH.

All eyes are on the Senate as they finalize the 2009-2010 budget. The final proposal will likely include gambling to fund state spending. The question is how much will spending be reduced and which tax(es) will be eliminated in their proposal. It is possible that the budget will not be resolved before the end of June. If we are unable to agree on a budget then we would work on a continuing resolution. We could continue spending at current levels or that plus or minus a percentage. The Senate should finish their work this week and recommend a budget to their body.

As the Legislature enters the final weeks we are in a time where members have to pay close attention. This is because we vote on Senate changes made to House bills. These items aren’t scheduled. They are added to the schedule with little notice of when and what will be considered. The process requires that a bill which is amended after being passed through one body must be voted on in the originating body. Any change that the Senate makes to a House bill comes back to us for a vote. There are three choices—concur which is approve, non-concur which kills the bill, or non-concur and request a committee of conference which is a small group of House and Senate members who meet to negotiate an agreement. The committee which heard the original bill should meet to discuss their recommendation on the changes. The Chairman of the Committee makes the recommendation to the full House. The members then vote on this recommendation. This is another attempt to stop a bill which members may object to. The final step is the Governor’s desk. The first example of a high profile bill which falls into this process is the bill on same sex marriage. The Senate amended the bill. The bill went to the Judiciary Committee to review. They voted 11-6 to accept the changes and will recommend that the House “concur” today. There will surely be debate on this issue. This could make a light agenda much longer.

The NH Legislature is considering a bill, SB5, to prohibit retailers from disclosing private customer information from sales to other states. This was filed in response to the Town Fair Tire situation in which Massachusetts wanted to collect sales tax on NH sales to Massachusetts residents. Our Attorney General quickly opposed this move by Massachusetts. The Senate has passed the bill and it is currently in the House. The Massachusetts High Court is apparently set to hear the arguments on this case. States choose their tax policy and must live with the consequences—in this case people choose to shop over the border in tax free NH. This case could have serious ramifications across our state and across the country if successful. The Commerce Committee is set to vote on this proposal this week.

All eyes are on the NH Senate today when they take up a number of controversial bills. On their docket are the following bills—medical marijuana, same sex marriage, transgender rights, repeal of the death penalty, and mandatory seat belts. The same sex marriage and transgender rights bills are recommended to be killed. The repeal of the death penalty is recommended for a one year study. The medical marijuana and mandatory seat belt bills are recommended for passage. It should be a lively session in the Senate. The House schedule is light with only a handful of bills on the regular calendar.

Companies do have a choice on where they locate and we in state government need to be careful about the policies that we enact. That message was made clear last week when we heard a bill from the Senate to make changes to the definition of a post secondary career school. Last year a change was made to this definition with a goal to protect students who go to career schools. The change had the unintended consequence of capturing a type of business which had never intended to fall under the definition. The proposed new language will add companies that license software to the list of entities excluded from the definition of such career schools. This change has been requested on behalf of Skillsoft Company, an employer of 240 in Nashua. This company licenses software to businesses and provides corporate training on the use of that software. Current law already excludes computer technology vendors who offer instruction to those who purchase their hardware or software. Although the committee never intended those who provide instruction on software they license to fall under this definition, it was never specifically excluded. Skillsoft is nearing the end of the lease on their present facility and has been looking at property in Massachusetts where they are excluded from this definition and the associated licensing requirements. We do not want to provide any barriers to retaining this valuable employer in the Nashua area. The committee unanimously agreed yesterday that this type of business was never intended to fall under this definition and has moved to promptly correct this oversight. The recommendation will go to the full House next week. Our policies do make a difference.

This has been a relatively quiet week in the State House. The House is holding hearings on Senate bills. We meet in session next week to address a very light calendar–only three bills on the regular calendar and a number on consent. The Education Committee, on which I serve, did hear the bill to ensure accountability in the delivery of an adequate education. The bill is assigned to a subcommittee for further work. At first pass, it appears that are taking the basic structure of what is done now in the state, asking the districts to do more, and labeling it as accountability. We need to make sure that we don’t overburden our local communities, and don’t end up with a state run education system. We need to maintain the little bit of local control we have left.

I read a report today that the House has gone to the Senate in an effort to restore School Building Aid to the local communities. It appears that the objective is to bond the building aid and use a portion of the rooms and meals tax to fund the bond payments. The bonding of School Building Aid is a bad idea, one I have written about previously. The local community will bond their school construction costs. The state contributes to the local communities principal payment cost (approximately 30%). The state proposes to borrow to pay for borrowed costs. This equates to using a master card to pay a visa. This is bad public policy and poor financial management. This takes us down the road of escalating our budget and financial obligations. School Building Aid had always been paid in the operating budget. The operating budget has grown so significantly that the state can’t fund the basic promises such as school building aid. We will see how the Senate responds.

After two very long days the NH House passed a budget which increased spending funded by new and increased taxes. The spending in the state will increase 2.9% in general fund dollars (raised and spent in NH), and 13.9% when you factor in Federal dollars. This budget fails to fund School Building Aid ($83 million), and Revenue Sharing ($50 million), two programs which send money to our cities and towns. This means that the local taxpayer will have to pick up this share and this will result in higher local property taxes. The budget is funded by a 5% capital gains tax, an 8% estate tax on estates over $2 million, and a 10% tax on gambling winnings over $600—all new taxes. The majority will raise the rooms and meals tax by almost 10%, and increase the tobacco tax for the 4th time in 5 years. Further they propose to delay the reduction in an insurance premium tax for two years, a promise we made to bring business and good paying jobs to the state of NH. Republicans offered various amendments to reduce the budget, fund the two revenue sharing programs, and eliminate the above noted taxes (each offered on separate amendments). All amendments failed.

It was noted that Former Speaker Doug Scamman supported tax increases in 1990 when he was Speaker. The taxes were the subject of the Sunday political columns. It is true that he supported, and advocated for these taxes. What was not reported was his answer on why this was true. He noted that the House had passed a budget some months prior which represented a reduction from the prior two year budget. As the economy slipped into a recession the two parties worked together to craft a revised budget. Meeting weekly, the majority and minority worked to reduce the budget another 5% in each of the two years. Only after working to reduce the budget did the parties work together to determine which mutually agreeable taxes could be sought to fill the remaining hole. None of that was done here. He noted to two taxes, the capital gains tax, and the suspension of the insurance premium tax which will be particularly harmful to our state. That is the rest of the story which was not reported.

The House was briefed on the Budget on Monday. The Chair of Finance noted that this was a very difficult budget where all must share in the pain. This is a budget which increases overall spending by 13.9%. The budget which is funded by General Fund dollars (money raised and spent in NH) is increasing 2.9%. The budget is missing one key factor-school construction aid to our cities and towns, estimated at $83 million. Inclusion would double the state general fund spending. The House rejected the Governor’s proposal to bond this item (borrowing to help pay for borrowed money), but did not fund it in the operating budget, leaving it to the Senate to resolve. The proposed budget is funded through increases in the rooms and meals and tobacco taxes, and new taxes on capital gains, gambling winnings, estates over $2 million. The new taxes equate to $300 for every person in our state–$1200 for a family of four.

Republicans presented an alternate budget yesterday. The budget would require no new or increased taxes, and represent a 2.6% decrease in general fund spending. We recognize that many are struggling to support their families and they should not have additional tax burdens imposed upon them by the state. The budget funds revenue sharing to cities, and school construction aid (which will prevent larger local property taxes). The contrast in this time of recession is a budget which lives within the revenue means, and one which continues to search for revenue sources regardless of the impact upon the citizens. The House will vote on the budget tomorrow.