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N.H. Panel  Says No to Rise  Of Smoke Tax

House to Vote on Casino Bill  As Parties Wrestle Over Budget

Concord — On the eve of a House vote on casino gambling, the Senate’s budget committee voted yesterday not to accept a House-proposed 20-cent cigarette tax hike and delays in several business tax credits worth a total of $53 million in revenue.

The Republican-controlled Finance Committee voted 4-2 on the proposals with the two Democrats in opposition. The committee is putting together its chamber’s own $11 billion, two-year budget for a Senate vote June 6.

The chambers’ differences over how to pay for state spending could extend to a key measure endorsed by the Senate and Gov. Maggie Hassan: casino gambling. The House votes on a Senate-passed bill today that would legalize one casino with up to 5,000 video slots and 150 table games.

Hassan included $80 million in her budget from a licensing fee from a casino and has lobbied hard for the House to pass it as another revenue source for a state that has no personal income or general sales tax. The House has never passed a casino bill and its budget contains no gambling money.

The Senate is building its budget on about $62 million less in revenue estimates than the House. The revenue difference is partly due to the Senate not accepting revenue from the cigarette tax increase and delaying the business tax credits.

The Senate also estimates the state will get $107 million less in revenue for a hospital tax used for some state spending and for aid to hospitals to help offset their cost of caring for the poor.

Senate Republican leaders say they will make cuts to spending rather than include gambling money to make up the difference unless the House passes its casino bill.

Senate Finance Chairman Chuck Morse released a list of suggested changes to the Department of Health and Human Services’ budget yesterday that included smaller funding increases for services for the disabled and mentally ill than proposed by Hassan and the House.

That prompted a quick response from Hassan, who called the funding levels “nothing short of devastating for the health and well-being of the people of New Hampshire.” Though Hassan did not mention the casino bill, the message was plainly directed at undecided lawmakers ahead of today’s House vote, which is expected to be very close.

“I urge the New Hampshire Legislature to come together, reject these cuts, and move forward” with a plan to strengthen the economy, Hassan said in her statement.

Regardless of the Senate panel’s decisions, the budget still must ultimately go through other tests besides the June 6 Senate vote. The House and Senate must negotiate a compromise, which means both sides are setting positions now that will likely change in June.

Republicans control the Senate by a 13-11 margin while the House is controlled by Democrats 218-179 with three vacancies.

The Senate panel’s rejection of the 20-cent cigarette tax increase did not include a 10-cent increase due to take effect automatically this summer which indicates it is not against all tax increases. The House most likely has built fallback positions into its budget.

Both sides agree no revenue from a casino — if the Senate bill passes — will be available in this two-year budget cycle except for possibly a licensing fee. They also agree that higher education and services for the mentally ill and disabled are priorities. For example, the Senate panel agreed Monday to the House’s aid levels for the community colleges and university system.

Veteran budget-watchers know that one thing is certain: the budget that takes effect July 1 will have elements of both the Senate and House budgets and some of the talk today is nothing more than setting the table for the negotiations ahead.