Using Rooms and Meals for Building Aid

In the Nashua Telegraph, Kevin Landrigan reports on a plan by Nashua Rep. David Campbell to set aside a portion of the Rooms and Meal Tax to pay for the state's Building Aid Program:

Democratic state Rep. David Campbell said the plan would be a way to keep the state's promise for building aid while allowing for enough state-backed debt to finance its own public work projects.

"This is a way to get us through the next biennium," Campbell said Thursday after he and Rep. Candace Bouchard, D-Concord, chairwoman of the House Public Works and Highways Committee, offered the proposal to the Senate Capital Budget Committee.

"This allows the discussion to take place in the state Senate, where it belongs," Campbell said.

As proposed, it would dedicate one-half of 1 percent from the room and meals tax to pay for bonds covering the state's share of school construction projects.

"It would be up to the Senate to decide if it should raise the tax or use one-half of 1 percent of the existing tax," Campbell said.

First of all, the state already dedicates a portion of the Rooms and Meals Tax to revenue sharing. Gov. Lynch's budget proposed ending it, but the House budget restored it.

Secondly, Rooms and Meals revenue are already being spent. Dedicating them to a specific program does nothing to actually solve the problem. It just takes money from other spending.

Finally, if the Building Aid Program is such a high priority for Campbell and the Public Works Committee, they could have included more than $0 for it in the budget. They decide to punt, and let the State Senate figure out how to pay for a program that will almost certainly be added back into the House budget.

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.

House Committee Keeps Toll Control with Council

(CONCORD) The House Public Works and Highways Committee has unanimously rejected a proposal to give the Legislature control over New Hampshire tolls. HB 137 would have set state toll rates in law, rather than by the Executive Council.

The five-member council last year raised toll rates around the state in order to make up for a projected shortfall in turnpike revenues. The Legislature currently retains the right to set discounts under the electronic "E-Z Pass" system, and to decide where and when toll booths will be installed.

Committee Chair Candace Bouchard (D-Concord) and Vice-Chair David Campbell (D-Nashua) urged their collegues to keep the current system, arguing that last year's toll increase showed that the Council had the political courage to raise toll rates.

Representative John Graham (R-Bedford) argued that such decisions should all be made by the same body, preferably the Legislature, but went along with the Committee's 17-0 decision. The full House will likely take up the bill on February 4th.

Gas Tax on the Horizon?

With gas prices dropping under $2 a gallon for the first time in over three years, maybe New Hampshire drivers are willing to pay higher gas taxes. Maybe not. But some lawmakers are turning to the gas pump to try to replenish a Highway Trust Fund depleted by spending on other agencies and drivers staying home this summer.

The Concord Monitor reports on two Representatives who see higher gas taxes as the only way to pay for roads:

Rep. David Campbell, who has chaired this year's committee to study the highway fund, has said he will sponsor a gas-tax-increase bill. He said he hasn't sorted out all the details - including how big a raise he'll support - because it's not clear how much federal aid the state will receive. But, he said, he's come to believe that cutting alone won't right the road budget.

"At some point you can't cut the highway fund any more," said Campbell, who is not related to the transportation commissioner. "Are you going to cut winter salt? Are you going to cut snowplowing? Are you going to cut paving?"

Campbell, a Nashua Democrat, said he has backing from both sides of the political aisle.

"It's something that I'm hopeful the leadership of both parties, in both parties, can get behind," he said. "If they don't, I want them, whoever they are, to answer for the consequences if we don't do it. Show me where we're going to cut."

Rep. Candace Bouchard, a Concord Democrat who chairs the Public Works and Highways Committee, said she will support Campbell's bill.

"I'm pretty hopeful that people will understand the need to maintain our transportation system," Bouchard said. "I think we need to make our argument and show everyone that we've done our homework."

New Hampshire drivers currently pay 38 cents per gallon in gas taxes, 19.4 cents to New Hampshire, and 18.4 cents to Washington.