Budget Concerns

While high-profile bills dealing with social issues got most of the attention last week, Kevin Landrigan continutes to supply excellent coverage of New Hampshire budget mess in the pages of the Nashua Telegraph. In his weekly column, Landrigan reports on how Governor John Lynch's plan to borrow against operating funds is endangering the state's capital budget:

Lynch had enough to worry about trying to get his complex state budget through the House of Representatives.

Now it's looking more and more like his two-year capital budget could be in tatters before too long.

As noted, Lynch used a variety of maneuvers to balance his two-year spending plan, and one that has received little attention is the proposal to float state-backed bonds and make $84 million in school building aid payments to school districts.

One byproduct of this is that for the next two years, it would gobble up 60 percent of state bonds to do public works construction projects.

"Once you do that, you cease having a capital budget," said Nashua Democratic Rep. David Campbell, vice chairman of the House Public Works and Highways Committee. "If we do that, then we might as well not bother putting one together, because we can't possibly meet the needs."

Campbell and others worry that setting this precedent for a popular local aid program couldn't easily be undone once the economy recovers.

Landrigan also lists some of the budget changes under consideration by the House Ways and Means Committee:

Budget "hole": At one point early last week, the House subcommittee recommended spending that dwarfed the amount of expected revenue even with proposed new taxes on capital gains and estates.

The gap closed by week's end. House budget writers cranked the budget up by $14 million over what Lynch had budgeted to come in from prescription drug discounts and they dropped estimates for welfare caseloads as much as $20 million below Lynch estimates.

State layoffs: The proposal adds back two dozen employees, or nearly 30 percent of layoffs Lynch called for in Corrections with the closing of the state prison in Laconia.

Medicaid ouch: House budget writers learned at least $25 million in federal stimulus money given to the state has to go straight to county budget coffers because counties pick up all the non-federal share of nursing home and other costs.