NH Building Aid not sustainable

Karen Langley in the Concord Monitor reports on the state's Building Aid Program, which is currently funding by borrowing money to give to local school districts.

The state pays out about $45 million in partial reimbursement of school building costs annually. The money was included in the state budget's general fund until 2009, when an increasingly tortured economy pushed legislators to borrow the aid.

Borrowing the money can work as a temporary salve but would have a crippling effect if continued, the state treasurer has told members of the legislative committee commissioned to study the program. If the state continues bonding at current rates, the annual debt service will reach $50 million by 2020, said state Treasurer Catherine Provencher.

Towns to sue over retirement cuts

Karen Langley reports in the Concord Monitor on New Hampshire municipalities suing the state for cutting the state subsidy for local retirement benefits.

The state has long provided 35 percent of the payments into the state retirement system for local employees including teachers, firefighters and the police. But the state budget reduced that contribution to 30 percent this fiscal year and to 25 percent for fiscal year 2011. The association estimates the change will cost municipalities and school districts $27 million over the two years.

Groups representing municipalities, school districts and counties are crying foul. The organizations wrote to their members highlighting the budget change and informing them of the pending lawsuit. The suit will argue that the reduction in state payments violates a ban on unfunded mandates in the state constitution. In effect, the ban mandates that the state obtain municipal permission to impose or expand programs that will require local money.

SEA chief re-elected to 6th year

Karen Langley reports in the Concord Monitor that SEA President Gary Smith has re-elected to another year at the head of the union.

Union delegates meeting in Nashua yesterday cast 120 votes for Smith and 93 votes for opponent Ed Hager, said SEA spokesman Mike Barwell.

The election was the outcome of a Department of Labor investigation into complaints made by Smith's opponents after the union elections last year. The Department of Labor and the union settled with no admission of fault and an agreement to hold new elections for the second year of the term.

Smith said yesterday the vote was a vindication.

"We ran a fair and open campaign and election last year. We ran a fair and open campaign and election this year," he said. "It ought to clear up any doubt about the veracity of our process."

Child-care subsidies on hold

One of the many ways in which budget writers can ignore reality is by ignoring predicted caseloads. Just as overestimating revenues can lead to a rosier budget picture, so too can underestimating the number of people who will sign up for state services. Karen Langley reports in the Concord Monitor that increased demand for a state child-care program has forced the Child Development Bureau to start a waitlist for those seeking state money.

The Child Development Bureau will start the waiting list - a first for the department - as a way to stay on budget in a year when unprecedented numbers of families have sought aid.

The state has seen a 15 percent increase in the number of children receiving scholarships between February 2008 and August 2009, when the rolls increased from 7,294 children to 8,411 children, according to the bureau's figures.

While total enrollment has risen, the most expensive categories of child care - care for infants and full-time care - have seen disproportionate increases. Children up to 18 months accounted for nearly 25 percent of those receiving scholarship in August, up from 10 percent of those enrolled a year and a half earlier.

For programs such as this, the state can simply stop signing up new beneficiaries when the money runs out. If it underestimates caseloads for mandatory welfare programs, anyone qualifying for state money still gets it, and the deficit is added to the state's growing budget hole.