Fiscal Committee examines Lynch waivers

(CONCORD) The Legislative Fiscal Committee yesterday got its first look at the 352 waivers that Governor John Lynch made to his own Executive Orders instituting a hiring freeze, a ban on out of state travel, and limits of equipment purchases.

Administrative Services Commissioner Linda Hodgden answered the Committee's questions about the report, which shows 352 exceptions to the Governor's budget controls in Fiscal Year 2009, totaling $6.2 million in spending. Hodgden says her office estimates that Executive Order 2008-01 resulted in $13.3 million in savings since Lynch issued it in February 2008.

Under the Order, Lynch retained the power to waive any of the three spending restraints if Department heads requested an exception in writing. Hodgden says she's headed up a Waiver Committee at the Department of Administrative Services which carefully reviews each request before singing off. She credits her fellow Commissioners for limiting their waiver requests to only their most pressing needs, but says not all requests were granted.

The Josiah Bartlett Center has asked to see all department requests for budget waivers. At Hodgden's suggestion, we will submit a formal request under RSA 91-A, the New Hampshire Right to Know Law. Hodgden says that her committee has worked diligently to make sure only the most urgent staffing and equipment needs receive waivers, and that she tries to delay filling vacant positions as long as possible in order to maximize savings in the budget.

Committee Chair Marjorie Smith (D-Durham) took issue with several waivers granted for expensive equipment purchases, including 17 flashlights for the Department of Corrections costing $110 each, bullet-proof vests for the Liquor Commission, and five fax machines each costing $350. Representative Neal Kurk (R-Weare) thanked Hodgden for complying with the reporting requirements of the Order, but asked why it took nearly 18 months for Fiscal to receive its first Exceptions Report.

Hodgden responded that her office reported on exception granted in FY08 last year, and has submitted three separate updates on the impact of the Governor's Executive Orders since March.

Senate Minority Leader Peter Bragdon (R-Milford) asked about one trip that caught his eye, a one-day journey to San Juan, Puerto Rico. Hodgden explained that a state worker had been dispatched to retrieve a juvenile runaway, and not on a long Caribbean vacation.

The Committee also questioned a discrepancy between two DAS reports relating to the Executive Orders. The 60-day report, issued in July, stated that Administrative Services had processed $7.1 million in savings, and was on track for the original estimate of $8 million. But the waiver report, written two weeks ago, showed $13.3 million in savings.

Hodgden explained that the two estimates were generated by separate teams within her own office using different methods. She claimed the August report, with the higher savings figure, was more accurate as it was compiled using more recent and detailed data. The report itself did not describe how DAS arrived at its estimate. The Josiah Bartlett Center has asked for more information on the Department's methodology.

While the report includes $6.2 million in waivers granted by the Governor, Hodgden told the Committee that the full cost has not yet been felt. Several positions were filled by waivers late in the year, so no paychecks have yet been issued. Those costs will show up in FY10.

Earlier in the meeting, the Fiscal Committee officially accepted over $100 million in federal funds under the American Recovery and Reinvestment Act (ARRA). The bulk of the funding is directed at the Department of Health and Human Services. These funds were anticipated in the budget adopted by the Legislature in June.

On several items, Kurk questions state officials on whether the federal money would expand benefits and services to individuals not currently receiving them. He worried that the "free" money would boost the state's budget baseline, and put "tremendous pressure on the Legislature" to replace the federal funds with state dollars once the ARRA funding expires in 2011.