NH House Highlights

This week is shaping up to be a busy one in the legislature. The House Finance Committee finished their work on the budget. On Monday the House members will receive a briefing on the details. The full House votes on the budget on Wednesday and Thursday. The budget reports and amendments may be previewed on the legislative website, http://www.gencourt.state.nh.us/house/caljourns/default.htm. The Democrat majority on the committee chose raise taxes and fees instead of making cuts to spending in their final recommendation. Two of the proposals, the 5% capital gains tax, and the 8% estate tax on estates over $2 million are new proposals which have not gone through the legislative process. These proposals had hearings but were then tabled. The committee and the full House have not had the opportunity to vote on these proposals individually, and the Senate has not had an opportunity to weigh in on the ideas. These proposals are included in the massive document which makes all the changes to law to make the budget work. Thus a vote against one proposal included in this document would cause the whole budget to be out of balance. We must pass a balanced budget. The pressure will be on to approve the whole package as presented. Significant changes to our tax policy deserve a full light of day review and each elected official should be held accountable for their vote. I will provide updates as the week proceeds.

House Finance has completed work on the budget. I understand the final vote was along party lines. The Committee voted to increase spending from the Governor’s recommendation. The majority chose to fund programs for senior volunteers, foster grandparents, and family planning instead of making cuts during these difficult economic times. The spending will be funded by a number of taxes and fees, including a new tax of 5% on capital gains, and an estate tax of 8% on estates over $2 million.

The Republicans did offer an alternate proposal which would have avoided the tax increases. These proposals were rejected by the majority. The ease with which the Democrat majority on the committee has embraced these new taxes to fuel the spending should demonstrate how comfortable they are with raising revenue from any source. We would likely face an income tax if the Governor and the public weren’t so opposed to this tax. The inheritance tax was abolished in my first term in office, only seven years ago. These new taxes will make our state a less desirable place to retire, as those who have saved their entire life so that they won’t be a burden to their family and can be comfortable in retirement will face significant taxes. The differences in the way the two parties Govern should be very clear by now. Next week will surely be filled with debate on these very important issues.

The Finance Committee will finalize the budget next week. We return the week of April 6th for two days of voting. The Ways and Means Committee has reviewed revenues and currently estimate figures approximately $256 million below those used in Governor Lynch’s budget. A few weeks ago Ways and Means held hearings on a number of “amendments” which proposed various tax and fee increases. The amendments were voted on in a “straw poll” and then tabled by the committee-an unusual move. The committee has used the projected revenue of $180 million from these proposals in their estimates even though these proposals have not been officially accepted. This means that all will likely appear in the budget trailer bill HB 2. Additionally, on Thursday the House considered a proposal to increase the state wide property tax but allow a homestead exemption which was tabled on the floor. Speaking in favor of the tabling motion the Chair of Ways and Means noted that this was a worthwhile proposal which could be worked on to provide additional needed revenue for the budget. The Democrat majority will use almost any source of revenue to continue the spending. More details to follow on the budget and bills voted on this week.

We had another long day in the House today. This completes the week of voting. I wanted to provide a quick update and will give more details later. Two important bills came out “Without Recommendation” because the committee was tied on the vote. The motion which is offered first to the floor is Ought to Pass in situations like this. HB 436, the bill to allow same sex marriages, was the first to be discussed. After a lengthy debate the Out to Pass motion failed by one vote, 182-183. A motion to table and another to kill the bill both failed. The Ought to Pass motion was moved on a reconsideration motion and passed 186-179. The bill moves to the Senate. HB 426, the bill to add transgender references to our non-discrimination laws. This bill has also been referred to as the “bathroom” bill by a number of individuals who have contacted me because of the provision allowing the use of public restroom facilites. The Ought to Pass motion failed on a 157-172 vote. The bill was killed 181-149. Finally, HB 426 which proposed an increase in property tax from $2.12 to $5.50 but offered a homestead exemption of $150,000 was eventually tabled. The concern was that costs would be shifted to business and other homeowners, including second homeowners. We have spent years working to get the statewide property tax reduced and this would open the door to reverse that trend. More details to follow.

Update on some of the bills of the day. A repeal of the Death Penalty failed to be killed on a 179-188 vote. It was subsequently passed. Fortunately the Governor has stated that if this bill reaches his desk he will veto it. A bill to exclude overtime in “earnable compensation” and, thus from inclusion in the retirement pay calculation, passed on a 189-185 vote. Medicinal marijuana passed on a 234-138 vote. A number of marriage bills were also taken up by the legislature. Things have really changed in NH. We return at 9:30 a.m. for more voting. More details when the time permits.

We have three days of voting this week. Today was our first day and we took up a number of controversial bills. The House killed bills requiring parental notification prior to an abortion being performed on a minor. A bill which prohibited text messaging while driving was passed 222-137. A bill to allow an insurance policy which is free of any mandates was defeated 203-138. This would have provided a low cost insurance option to those who have no insurance. The House passed a resolution 192-150 which endorses the National Health Care Act, and act endorsing a single payer health system in the United States. There were two bills filed to repeal two labor provisions which passed last year. The first, HB231, proposed to repeal the “Evergreen Clause”, which continues the provisions of a collective bargaining agreement with public employees until a new agreement is signed. The proponents argue that the continuation clause infringes on the rights of the local legislative body by forcing the residents to pay expenses they did not vote to approve. The bill was killed on a 209-159 vote. The other, HB500 would have repealed the “card check” law. This allows employees to submit a card voting in favor of unionization. Once a set percentage is reached the bargaining unit may be formed. This law takes away the right of a secret ballot, a fundamental right in our society. This bill was killed 212-160. There were a few bright spots when a bill expanding the ability to collect for loss of consortium (HB177) sponsored by a trial lawyer was killed. Another bill, HB197, which would have allowed a negligent party to be held liable beyond their percentage of negligence was laid on the table. We return tomorrow morning at 9:30.

The House meets in session three days this week to vote on the majority of the remaining bills. There are a number of bills related to social issues on the docket which have generated alot of public input. I will provide updates on voting as the week proceeds. The Ways and Means Committee has held hearings on various tax and fee amendments in the past few weeks. There are two which I have received emails on. The first is a proposal to tax Capital Gains at 5%. This would be a new tax. A retired resident opposed this legislation noting that his savings are approximately 50% of their prior valuation and the state is proposing to tax what little remains. The seond proposes to tax estates over $2 Million at 8%, including those which pass to a surviving spouse. We should encourage and reward those who are successful and are able to take care of themselves in life. Both these proposals are contrary to this. The alternative is to have an individual dependent upon Government. These are troubling proposals. They have been retained by the Committee. They will likely appear in the buget companion bill, HB2, to fund the ever growing spending.

I have been asked about Federal Stimulus money coming to NH recently. Details are slowly coming to this state. There was a briefing Monday which can be viewed on the General Court website, www.gencourt.state.nh.us. There is also a link on the state homepage, www.nh.gov. The link provides Federal dollars and estimates of the NH share for various programs. I don’t believe that exact dollars are known yet. Within the last few days a number of Republican Governors have taken a position against acceptance of the stimulus dollars. The rationale is that this is one time money which will be used to start programs, or hire new employees. The cost of continuing these programs will then fall on the state or local community. In NH Governor Lynch has stated that he may use some Federal money to fund a part of education adequacy grants. This will cause the state to have a hole in our budget when the dollars are no longer available. The Governor does propose to use state dollars to continue some of the revenue sharing which he previously talked about suspending.

The Ways and Means Committee was holding hearings on Thursday on the tax and fee provisions contained in the Governor’s budget. We will see how the Committee responds to the estimated $127 M in new taxes and fees. The House session on Wednesday was relatively light. There will be no session next week so the Committees may vote on their remaining bills. There are three days reserved for session the last week of March.

The House returned from vacation week to a very busy schedule. Hearings and executive sessions were held to finish up the bills which have originated in the House. The highlight of the week was Wednesday’s session. HB 590 proposed to increase the age of retirement eligibility for Group II workers (Police, Fire, and Corrections) from 20 to 25 years of service, and a minimum of age 45 to age 50. This passed the House 279-90. This proposal passed the House last year also but was killed by the Senate. The House voted on two gambling bills. HB461 proposed to establish state owned casinos and was killed 335-35. HB593 proposed casinos and slots at racetracks and was killed 295-72. The House continues it’s tradition of being opposed to gambling. There are bills in the Senate which will come to the House later this spring so the subject is not dead for the year.

Two of the most controversial bills dealt with raising the gas tax and reducing the EZ Pass discount. HB 644 proposed to raise the gas tax by 15 cents (from around 20 cents to 35 cents), spread out over a 3 year period. This money will go into our The Highway fund to support road and bridge repairs. This fund also directs dollars to the Safety Department to fund Troopers, to the Judicial system, and to our Municipalities for road repairs. Supporters state that the gas tax has not been increased since 1991 and the Highway fund is in trouble. I don’t believe that this is the time to increase our gas tax given the economy. People are concerned with job security and are having difficulty making ends meet. Regardless, the House passed the gas tax increase on a 190-162 vote. HB 670 sought to make changes to the EZ Pass program used on our Turnpike System. The bill proposed reducing the discount from 30% to 15% and capping the number of transactions at 33 per month. The 50% discount given to tokens was reduced to 30% when the state converted to the EZ Pass system. Only four years after EZ Pass was implemented this bill proposed the further reduction in discount to the 15% level. The cap was proposed to take care of the commuter who uses the toll roads each day. The Turnpike system is a user pay system. A cap would essentially result in the infrequent user paying for the frequent user. The House rejected the Committee recommendation to pass the amended bill on a 161-181 vote. One final tax for the day–the House passed HB 205 183-123 to double boat registration fees.

Details are coming forward on how the Governor proposes to fund the estimated $500 million structural deficit in his budget. A close review shows three main sources of additional money; the use of one time money, suspension of contributions to NH municipalities, and tax increases. One time money accounts for a large share as the Governor proposes bonding $83 million of state building aid which has been discussed in detail already. He also proposes the sale of state liquor assets which is estimated to produce around $31 million. He also proposes to use $60 million from a Malpractice Insurance fund (which has approximately $160 million in assets). I do believe he proposes the use of some stimulus money also but don’t have the details at this time. He proposes to suspend revenue sharing with, and rooms and meals contributions to cities and towns. This totals an estimated $166 million. Nashua receives approximately $3.7 million from rooms and meals contributions, and approximately $2.5 million from revenue sharing. Finally, the Governor proposes a number of tax and fee increases which will total approximately $126 million. His list includes a $0.35 increase in the tobacco tax ($70 million), a ¾% increase in the rooms and meals tax ($40 million), and a 10% tax on gambling winnings over $600 ($16 million). The Governor also is proposing a $10 increase in motor vehicle registrations, and changes to the EZ Pass discount (eliminating the discount but capping the total monthly charge around $30 for those who drive a lot). The above show a patchwork to fill the budget hole. Hosue Finance started their hearings yesterday. The Legislature is on break next week so details will emerge in early March.