Sununu’s budget offers new programs, investments without raising taxes 

Monitor staff
Published: 2/14/2019 10:19:28 PM
Modified: 2/14/2019 10:21:35 PM

It’s been a dual problem for years: New Hampshire’s high student loan debt and its persistent workforce shortage. On Thursday, Gov. Chris Sununu announced a plan he said would address both.

Through the plan, the state “will lead the nation with a new $32 million student loan assistance program available to all students and at no additional cost to the taxpayer,” the governor told a chamber of House and Senate legislators.

The plan was one of a range of investments proposed in Sununu’s budget address on Thursday — a fiscally conservative blueprint aiming to secure social services investments without raising taxes. Over a brisk speech, the governor made commitments to mental health, school building aid, child services, hospitals and lead remediation, even while warning the Democratic Legislature against spending increases of its own.

Sununu’s budget pivoted on arguments of financial responsibility, and it would store away the highest amount in the “rainy day fund” in state history. But the proposal also included plenty of investments intended to win bipartisan support in an era of divided government.

Addressing a lingering crisis, Sununu suggested 61 positions in the Division for Children, Youth and Families, which has struggled to rebuild after a series of children’s deaths and ensuing audits exposed deep-set staffing issues.

He proposed a $61 million investment in services for the developmentally disabled. The state for years has had a backlog of those waiting for services; Sununu said the investment would eliminate that waitlist entirely.

He presented a $63.7 million commitment toward school building aid. That money, he said, would allow “property-poor” school districts — those whose property values are too low to easily generate funding — to get some needed relief.

And he talked up investments in higher education programs, from $24 million toward community colleges for nursing education to the $32 million student loan repayment program. That program would use funds normally appropriated to university endowments under the state’s UNIQUE program.

Sununu often has expressed aversion to loading budgets with policy changes instead of investments. But his proposal on Thursday included a few policy changes of his own.

A budget trailer bill included the framework behind a two-state paid family leave proposal that Sununu introduced with Vermont Gov. Phil Scott last month. And it followed through on a longtime priority for the governor: the creation of a state Department of Military Affairs and Veterans Services. That agency, a combination of the Office of Veteran Services, Adjutant General’s Department and Bureau of Community-Based Military Programs, was created by executive order last year but has yet to be created in law.

In unveiling his budget, Sununu stressed that it would include no new taxes and fees. But the governor did press for the legalization of sports betting — operated by the state Lottery Commission — which his advisers say could pull in $10 million a year for education.

“I say we go all in and get it done,” Sununu said of the legalization effort.

The proposals aligned with many of the Democrats’ funding priorities this year, and prompted more than a few ovations from both parties on Thursday. But Democrats were sharply critical of some of the funding levels, arguing they didn’t rise to the need for certain priorities.

And some organizations said the budget would harm them moving forward.

While Sununu touted a nearly 50 percent increase in funding for victim services provided by the New Hampshire Coalition Against Domestic and Sexual Violence, another organization, New Hampshire Legal Assistance, would receive a cut in its state funding.

In an email, the organization, which provides legal aid to poor residents, said the budget would cut the group’s state funding in half — from $1.2 million to $650,000, the lowest since 2012.

“This would be a staggering, to-the-bone cut that would reduce NHLA’s state funding below where it was in the depth of the Great Recession,” spokeswoman Sarah Palermo said, adding that the cuts would mean some New Hampshire residents would be forced to “go it alone in a complex legal system that is stacked against them.”

The budget included no funding to broadly increase Medicaid reimbursement rates, though advisers to Sununu said the administration would hope to increase rates for managed care companies.

Brendan Williams, CEO of the New Hampshire Health Care Association, which represents nursing homes and other providers, called the budget a “good start,” but urged investment in raising Medicaid reimbursement rates, which have stayed among the nation’s lowest for years.

Democrats criticized the absence of other funding initiatives, including the lack of increases to the adequacy formula, which provides per-student state aid to school districts.

At its heart, Democratic leaders said, the proposed budget did not do enough to ease the burden on local property taxes.

“Twenty years ago, the property tax burden was approximately 50 percent of the total tax burden for Granite State families,” said Majority Leader Doug Ley, of Jaffrey. “Today it has increased to almost two-thirds. That is not sustainable.”

But Sununu stood by the decision to top up the rainy day fund, and he offered stern words to the Democratic majorities over taxes. A series of cuts to the business profits tax and business enterprise tax are set to kick in 2021, but House and Senate Democrats are pressing to freeze the tax rate and prevent the future decreases.

Alluding to upcoming budget negotiations, Sununu said that stopping the tax cuts and raising spending beyond his own targets was a non-starter.

“You have to decide, are you going to spend money on bloated government or stand with taxpayers?” he said.

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