Lynch Calls for Spending Restraint, Green Jobs, and Federal Stimulus

By Grant Bosse
January 8, 2009

(CONCORD) In a speech filled with applause lines, but short of specifics, New Hampshire Governor John Lynch delivered his Third Inaugural Address in the New Hampshire House Chamber this afternoon. The Hopkinton Democrat warned the Legislature of a “budget challenge of unprecedented dimensions”, but did not set out his preferred solutions, either in terms of new revenues or spending cuts.

Republican lawmakers warned Lynch and Democratic budget writers two years ago that the revenue projections used to justify spending increases were unrealistic. But Lynch repeatedly pointed to the national economic climate as the reason for New Hampshire’s budget woes, rather than the 17.5% increase in state General Fund spending over the past two years.

“The national recession is having a dramatic impact on our state budget,” Lynch stated. “New Hampshire and states across the nation have seen significant shortfalls in revenue as this recession has deepened.”

Lynch called on Congress to quickly send aid to struggling states in the form of a stimulus package, drawing the first standing ovation of the afternoon from Democratic lawmakers.

“We need national solutions to this crisis. I urge the new Congress and President-elect Obama to act quickly to pass a stimulus package that will create jobs for our workers now,” Lynch said.

Senate Ways and Means Committee Chairman Lou D’Allesandro is also counting on Washington to help close New Hampshire’s budget gap.

“Clearly, the federal stimulus is an important ingredient in the package, and it’s incumbent on the Congress of the United States to work with the incoming President to get that done sooner rather than later.”

Former Republican Governor John Sununu will likely be the next Chairman of the Republican State Committee. He wanted Lynch to take more responsibility for the problems facing New Hampshire, rather than turning to Washington.

“I’m just surprised and disappointed that our principle strategy for dealing with the deficit is to wait for the federal bailout. I was hoping that we’d hear some specifics on reductions and so on, but there weren’t any,” Sununu said.

While not mentioning the size of the current budget gap, nor the structural deficit expected in next year’s budget, Lynch argued “this next budget cannot be balanced by tweaks and minor adjustments.” He promised to “examine every area of spending, look at every program, and say ‘no’ more often that we would like.”

Lynch also echoed his opposition to either a state sales or income tax, drawing his most enthusiastic response from Republican lawmakers. Senate Minority Leader Peter Bragdon led the only GOP-backed standing-O of the speech.

“We like the idea of no sales or income tax. We like the Governor’s idea of having to say no. We wish that we had said no to things in the last two years,” Bragdon said. “I’m disappointed though to hear that there’s no exclusion of other new taxes, and no exclusion of raiding the Rainy Day Fund to pay off the overspending of the last two years.”

While Lynch’s call for fiscal restraint meant with muted applause from the Democratically-controlled Legislature, it was his new spending initiatives that received the warmest response. Lynch unveiled a “Green Jobs Initiative” to be paid for from the proceeds of the Regional Greenhouse Gas Initiative. The program would increase energy efficiency in state buildings, increases worker training programs, and create a low-interest revolving loan fund to assist New Hampshire businesses with energy efficiency or alternative energy projects.

“The Green Jobs Initiative will help create jobs for our people now, and make New Hampshire’s economy stronger for the future,” Lynch said to a chorus of applause. “Let’s help New Hampshire workers and businesses keep their competitive edge, and let’s keep good paying jobs right here in New Hampshire.”

Lynch did not say how much the Initiative would cost, though New Hampshire could receive $25 to $35 million a year based on the current cost of carbon dioxide allowances. Senate President Sylvia Larsen admitted that she hasn’t yet seen the details of the Green Jobs Initiative, but welcomes the approach.

“I think that was one of the highlights of his speech, and one which has potential both for people who might be out of work, but also for young people who are graduating who might see an opening for a career ahead of them,” Larsen commented.

House Minority Leader Sherman Packard also expressed interest in the program, providing that its cost doesn’t land on New Hampshire ratepayers.

“Anyway that we can get away from importing oil, and sending money overseas, to South America and Russia, is a great idea,” Packard argued. “But I’d have to see how he plans on paying for this, whether it’s on private people who would do this, or whether he plans on putting state money into this.”

The final third of Lynch’s address concentrated on education, congratulating New Hampshire for mandating public kindergarten in every community, and for defining an adequate education. Lynch also renewed his support for a Constitutional Amendment that would allow targeted aid to needy communities, but stopped short of lobbying the Legislature to put such an amendment on the ballot.

“I also recognize that there has not been a consensus in the Legislature on a Constitutional Amendment that would allow for that approach. I believe the discussion should continue, but we also need to meet our education responsibilities and build on the progress we have made,” Lynch added.

Lynch’s comments on education were just one area where Deputy Minority Whip Andrew Renzullo says the Governor has failed to govern.

“He was congratulating himself on the definition of an adequate education. Unfortunately, that’s a $100 million hole in the budget. What does he plan to do about it? Does he plan to come and say that we need a more reasonable definition of an adequate education?” Renzullo asked.

Republican leaders argued that Lynch’s address was another in a long line of speeches calling for bipartisan cooperation and problem solving, but lacking any clear direction. Packard says it’s time for the three-term Governor to step up.

“We still need to hear the details on how he’s going to solve the problem. This is the party in power. He’s the Governor. And we’re certainly willing to work with him, but it’s incumbent on him to bring forward his ideas on how we’re going to solve these problems,” Packard said.

Republican Representative David Hess didn’t think the speech lived up the moment.

“In these difficult times, unprecedented in the last 70 or 80 years, it’s disappointing that the Governor didn’t have any specifics about what the state can and should do to alleviate the economic conditions, to keep the unemployment rate as low as possible,” Hess argued. “These are extraordinary times, and they call for an extraordinary Inaugural Address.”

But Democratic leaders defended the speech, arguing that while it may not have contained specifics, it did set out Lynch’s priorities.

“The roadmap he presented was one which we will work to preserve the safety net for our most vulnerable citizens, and to recognize the importance of maintaining public safety,” Larsen said. “In a time when we’re cutting other programs, those are critical needs that we’re going to work to protect as we look to cut back in state government.”

Larsen said Lynch struck a balanced tone between the somber economic times, and the ability of New Hampshire to rebound.

“Through green job growth, as well as job retraining, we can hopefully grow a new economy that is perhaps not exactly the same as in the past, but one which is forward thinking and moves towards new forms of energy, alternative energy, and jobs that relate to energy savings,” Larsen said. “I thought it was an upbeat message considering the economy we’re facing.”

D’Allesandro said he could easily summarize the Governor’s message.

“What he said was ‘Listen, we’ve got a problem, but we’ve got a great country. We’ve got a great state. And if we work together, we can keep these things going and we can bring success to the down economic situation,’” D’Allesandro concluded.