LEBANON — Upper Valley schools, health care providers and municipalities are expecting a much-needed bump in state aid under New Hampshire’s $13 billion budget, which was into law by Gov. Chris Sununu on Thursday.
Officials say the two-year spending plan, a compromise between Sununu and Statehouse Democrats, invests in several priorities that were underfunded in past budgets. Those include money for local school districts, Medicaid rates and a key infrastructure project in Lebanon.
However, they also worry the Legislature’s use of surplus money to fund big-ticket items is risky and could put progress made this year in jeopardy in the event of future budget shortfalls.
School spendingSchool officials say they’re cautiously accepting about $138 million in new aid because the funds aren’t guaranteed to continue past 2021.
The money is particularly needed in property-poor communities, where reductions in state aid have resulted in staff and program cuts.
“We still lack a funding system for sustaining education,” Claremont School Board Chairman Frank Sprague said on Thursday. “The state of New Hampshire has to come to grips that an equal and appropriate education needs a permanent, stable funding source.”
Claremont, which has been the center of a decadeslong debate over how New Hampshire funds education, will receive an additional $6.25 million over the next two years through a combination of education aid and municipal revenue sharing.
“Obviously we are pleased. It stops the bleeding,” Sprague said.
Rep. Rick Ladd, R-Haverhill, echoed similar sentiments, saying he’s glad the Legislature was able to boost education spending but wants a long-term fix.
Haverhill is slated to receive an additional $1.8 million in aid over the budget’s cycle, while Canaan would see around $847,600 and Lebanon would get almost $1 million. Hanover, which is considered a property-rich town, would see state aid decline about $64,700.
“I’m really pleased that we’ve been able to do that but the caution now is if we’re going to do this with one-time money, we’ve got to ensure that people don’t go on a spending spree and start hiring labor and all that,” said Ladd, the ranking member of the House Education Committee.
Medicaid ratesHealth care providers in the Upper Valley said plans to raise Medicaid rates included in the state budget also are welcome but long overdue.
The budget compromise calls for an $85 million increase in Medicaid payments — when matching federal funds are included — over the next two years.
Rates will rise by 3.1% on Jan. 1, 2020, followed by another 3.1% increase in 2021.
However, those will come months later than health care providers initially expected. Earlier versions of the budget would have the Medicaid rates raised three months ago.
Martha Chesley, administrator of Hanover Terrace, said the wait has been “difficult” for her staff and patients.
Over the past year, the New England Consumer Price Index for medical care rose 4.6% and tariffs are driving up the prices on imported medical supplies, Chesley said. Meanwhile, some nursing homes have taken beds “offline” because of difficulty finding and training people to staff them, she added.
“The Medicaid rate increases are considered a ‘down payment’ when it comes to addressing years of funding neglect,” Chesley said in an email.
New Hampshire’s Medicaid reimbursement rate is among the lowest in the nation, according to Rick Adams, spokesman for Dartmouth-Hitchcock, who said the increase will provide some aid.
“There is still a long way to go, though, in getting to Medicaid reimbursement rates that come close to covering the cost of care to those patients,” he said via email.
Meanwhile, Camron Ford, executive director of Headrest, said the budget compromise does expand access to one area. For the first time ever, state funding will be available to the nonprofit’s suicide hotline, he said.
Westboro Rail YardLebanon officials say the budget also provides money to clean up the Westboro Rail Yard, beginning with demolition of several crumbling structures on the 22-acre site.
The budget sets aside $1.87 million for the Department of Transportation to demolish “structures on state-owned property,” including the rail yard’s historic bunkhouse, roundhouse, sandhouse and chimney. The funds also should cover a $620,000 request to tear down former highways garages said to be impeding development in Concord.
Lebanon’s City Council spent years lobbying Sununu and lawmakers to clean up the rail yard in West Lebanon, arguing the dilapidated structures inside pose a safety hazard and stand in the way of a proposal to create a park along the Connecticut River.
“I think it’s absolutely wonderful that (the demolition funds) made it into the budget,” Lebanon Mayor Tim McNamara said on Thursday, adding removal of the old buildings will help revitalize the neighborhood. “I’m delighted. I think it’s wonderful. We’ve been on pins and needles with this for a while.”
City Manager Shaun Mulholland spoke of the development in a more cautious tone, saying the spending compromise cut about $3.5 million from the DOT’s budget, and it’s not known where that money will come from.
Even if the state goes ahead with the demolition, it’s unclear when that will start, he added. Earlier versions of the state budget set the work for 2020, but Mulholland has yet to hear from transportation officials.
Tim Camerato can be reached at tcamerato@vnews.com or 603-727-3223. Nora Doyle-Burr can be reached at ndoyleburr@vnews.com or 603-727-3213.