2 lawyers wrote their own meal ticket

The Nashua Telegraph runs an AP story on one of the most egregious cases of rent-seeking I've ever seen.

Every lawsuit filed or even threatened under a California law aimed at electing more minorities to local offices - and all of the roughly $4.3 million from settlements so far - can be traced to just two people: a pair of attorneys who worked together writing the statute, The Associated Press has found. The law makes it easier for lawyers to sue and win financial judgments in cases arising from claims that minorities effectively were shut out of local elections, while shielding attorneys from liability if the claims are tossed out.

The law was drafted mainly by Seattle law professor Joaquin Avila, with advice from lawyers including Robert Rubin, legal director for the Lawyers' Committee for Civil Rights of the San Francisco Bay Area. Avila, Rubin's committee and lawyers working with them have collected or billed local governments about $4.3 million in three cases that settled, and could reap more from two pending lawsuits.

Basically, these two daring entrepreneurs decided to go into the subsidy farming business in California. They push through a law that not only forces local governments to write them fat settlement checks, but also shields them from the consequnces of frivilous lawsuits. Win-Win, for them.

Expanded gambling not always sure thing

Kevin Landrigan leads off his weekly column in the Nashua Telegraph by reporting a glitch in the proposal to put video slot machines at the state's racetracks.

As it turns out, VLT gaming appears to meet the definition of a state lottery game. Voters approved more than a decade ago an amendment to the state Constitution which says that all profit from lottery games has to go to education.

For the layman, the essential difference is that at a VLT, all players are competing for one big jackpot. Theoretically at least, two people sitting next to one another playing a slot machine can win the jackpot at the same time.

Gaming Commission Chairman Andrew Lietz has confirmed that he would be asking Attorney General Michael Delaney’s office for a legal opinion on this subject.

Lots of other good stuff in the column, as always.

New Hampshire may have to lift Charter School moratorium to get federal aid

Kevin Landrigan reports on the Nashua Telegraph that New Hampshire officials are applying for $75 million in federal funds from the Department of Education, but might not qualify unless it lifts its Charter School moratorium.

It’s likely some state education laws will have to be changed for the state to become eligible, the state educators said.

The state has a moratorium on additional, state-created charter schools. New charter schools can still open up in the state as long as they are first approved by local voters.

The Race to the Top law encourages charter schools; Barry said existing federal advisories have warned states against having any caps on charter schools.

Maine is not eligible to apply for any of the money because there are no charter schools in that state, Barry said.

Telegraph slaps Court over cable ruling

The Nashua Telegraph takes issue with a recent New Hampshire Supreme Court ruling, which decided that a landlord could not cut off an illegal cable hookup from a tenant who had stopped paying the rent.

That’s seems a bit of a stretch. Television and Internet service are not cited in the legislation, and although telephone service is protected, there is no indication that cable was a telephone provider in this case.

If the connection was illegal, as the landlord claims, then it should have been disconnected anyway, making this a poor case upon which to set such a broad precedent if that was the court’s objective.

With this ruling, the court has essentially put cable television in the same category as essentials like water, light and electricity. What’s next? “Cable stamps” for those who can’t afford a hook-up; or Internet assistance for those who qualify for fuel assistance and subsidized school lunch?

State backing loan for Claremont newspaper

Further down in Kevin Landrigan's Sunday column is a note on a the Executive Council backing a loan for the new owners of the Claremont Eagle Times.

Sign of the Times

The council approved a state guarantee loan of up to $250,000 for the new publishers of the resurrected Claremont Eagle Times.

The loan is for working capital for Eagle Printing and Publishing, the company linked to the Pennsylvania media group that emerged as the suitor after its previous ownership sought bankruptcy protection four months ago.

The lenders will pay an interest rate of 5 percent for the first year and following that, the prime lending rate plus 1.25 percent.

For its part, the guarantee makes the state liable for up to 75 percent of any amount on which the group defaults.

Putting New Hampshire taxpayers on the hook for a private business is a fundamentally bad idea, especially since the loan is at the whim of elected officials rather than through an independant revolving loan fund. The implications of a newspaper existing because of the generosity of politicians is even more disturbing.

NH’s battle with feds over cash continues

Kevin Landrigan reports on New Hampshire ongoing battle with the federal government over Medicaid payments.

The feds’ decision against the state’s claim was made on several grounds, among them that the state’s tax on hospital revenues used to generate bonus state Medicaid payments is invalid.

Then, state Health and Human Services Commissioner John Stephen argued that the tax isn’t on income or profit, but on hospital revenues, and therefore, an appropriate expense to claim.

For years, the state’s argument has been that the federal government has changed the rules of the reimbursement game and tried to apply them retroactively to New Hampshire.

Did we really need a summit to figure out how to fix budget?

Nashua Telegraph columnist John Bachman questions why House leadership would hold a Tax Summit, but not give equal attention to state spending.

Every dollar forcibly taken from the private sector is a dollar not available to finance growth and create jobs. Now the Democrats in charge must bob and weave themselves around these obvious facts, but the state budget is still broken due to the spending of Step 1.

A series of federal handouts have obscured the problem, but it is still here. We spend more than we have, and if we take more taxes, unemployment worsens.

It was not always so and it need not be. Most people live within their means and know how to restrain the wants to fund the musts. But politicians have proven they cannot be trusted to do the same. Spending begets power and buys votes, so they spend.

Municipalities had no choice but to sue

The Nashua Telegraph says that New Hampshire cities and town were right to take the state to court over cuts in municipal retirement subsidies, whether or not they win the case.

The state took $50 million from cities and towns in the form of suspended state revenue-sharing payments. That, as far as we know, is resented but not being challenged.

It then handed municipalities a bill for $27 million. That’s the estimated cost of reducing the state’s contribution to public employee retirement funds from 35 percent to 30 percent next year and to 25 percent in 2011. The reduction, which is the subject of an impending lawsuit, will cost Concord taxpayers between $300,000 and $350,000 over the next two years.

The municipalities are right to challenge the state’s unilateral abrogation of a longstanding agreement. They may not win, but given what’s at stake, they must fight the state’s move, one that could have been avoided by raising more revenue.

Watchdogs sound alarm on spending

Kevin Landrigan writes up yesterday's "Stop the Spending Summit", featuring some of the leading state budget experts in New Hampshire who are also my boss.

Charles Arlinghaus, president of the Josiah Bartlett Center for Public Policy, said lawmakers in 2012-13 face a shortfall of $637 million when one-time stimulus grants totaling $550 million go away as well as other one-time fixes.

To close the current budget, lawmakers deeply cut aid to cities and towns for revenue sharing and retirement costs but those get restored after July 1, 2011.

“That’s the starting problem for the budget next year,” Arlinghaus said. “I don’t know how many of you have decided to run for re-election or not; God help you.”

Health care for public retirees could be reality

Kevin Landrigan reports in his Nashua Telegraph column on a move to set up permanent health care subsidies for retired municipal workers.

The New Hampshire Commission to Propose a Retiree Health Care Benefits Funding Model – that’s a mouthful – took a big leap last week toward finding a viable way to help public retirees get health care from somewhere other than Medicare.

It’s no longer an academic debate. Thanks to the plummeting assets of the New Hampshire Retirement System, the days of a medical subsidy helping to pay some of the coverage costs for retirees are fast disappearing.

By one insider’s estimate, the subsidy no longer applies to as many as half of the existing 52,000 public employees who one day will need health coverage after they’ve ceased working.

State tries to justify $110m seizure

Kevin Landrigan summarizes yesterday's oral arguments in the JUA Lawsuit.

David Leslie, a Boston lawyer representing Attorney General Michael Delaney, said the policyholders had no vested right to the surplus and the Legislature could take at least some of it to support spending on access to health care.

“Do the policyholders have a vested right? They don’t,’’ Leslie argued.

But Kevin Fitzgerald, lead lawyer for the parties that sued the state, said politicians in Concord took the money without any legal foundation.

‘’You can’t take that which doesn’t belong to you, neither can you supplant the plain contractual rights of others,’’ Fitzgerald answered.

State workers take a stand; choose layoffs over furloughs

The Nashua Telegraph editorial page looks at the aftermath of the State Employees Association rejecting the new contract put before them.

With a spread of 59 percent against the deal, the message is clear: “Let’s get back to the bargaining table,” said Gary Smith, president of the State Employees Association, SEIU Local 1984.

Unfortunately, there’s not much more to bargain for. Gov. John Lynch and his bargaining team have already rejected the alternatives the union is proposing. Voluntary furloughs, early retirement incentives, four-day work-weeks, and allowing unfilled positions to stay vacant are all good ideas, but won’t get the state the $25 million in savings needed quickly enough.

There is no alternative now except layoffs, which will be somewhere between 500 and 750 depending on the state’s revenue receipts in the months ahead, and the outcome of a lawsuit over a medical malpractice insurance fund that has been raided to balance the budget.

State union employees hit hard by job cuts

In the Nashua Telegraph, Kevin Landrigan takes a personal look at the impact of layoffs on state employees.

Worried about the jobs of his co-workers, state Revenue Operations Officer Bill Champagne said Monday he voted for a pending labor contract, that if approved, would have cost him $3,300 in unpaid furlough days.

On Tuesday, Champagne, 63, listened in stunned disbelief while being told he was one of seven Department of Revenue employees to be let go.

“I was just flabbergasted. I would have bet the farm I was the last one to go and that would have been after the commissioner,” Champagne said. “I am just devastated. It does bring your self-worth and self-esteem down to zero.

Lynch Layoff Roundup

In the Telegraph, Kevin Landrigan says Governor John Lynch is moving forward with plans to lay off 250 workers and demote 60 more.

Some of the savings will occur through the elimination of vacant jobs that are paid for in the existing $11.5 billion state budget, Lynch told reporters.

The three-term Democratic chief executive said some employees at all levels of authority will be let go, but whole agencies and specific jobs solely paid for with federal or other nonstate dollars would be exempt from the layoff.

Many of those vacancies were already included in the budget, which extended the partial hiring freeze imposed by Lynch in February 2008.

Shira Schoenberg gets reaction from the head of the State Employees Association in the Monitor.

"Services are going to go unprovided," said SEA President Gary Smith. "Kids are going to go unprotected. Elderly are going to freeze. And we're going to be able to say this didn't have to happen. . . . This happened because the governor didn't recognize the need and didn't give the resources to it."

Smith said the union is considering whether it has any legal avenue to challenge the layoffs.

He added that after the vote, Lynch had little choice.

"(Lynch) built his own political box," Smith said. "He had nowhere to go but to show that he's tough and can follow through on his threat."

In the Union Leader, Tom Fahey reports that the cuts will come from departments funded with state General Fund dollars.

Lynch would not specify what government agencies will be hit. Only jobs that will save the state money will be cut, he said.

That means layoffs are unlikely at the Department of Employment Security, which is federally funded. Banking, Insurance and the Public Utilities Commission appear safe, too, since they run on fees from companies they regulate.

Many Safety and Transportation jobs rely on highway funds, not general tax revenues. Safety Commissioner John Barthelmes told his workers in a memo yesterday "there will be no layoffs" in his department.

Today is D-Day for NH state employees

The Nashua Telegraph hopes for a "Yes" vote in anticipation of today's results of the state employee contract.

Today should be the day we learn what lies ahead for state government – massive layoffs or employee furloughs. It’s decision time on a proposal that could save 750 state jobs in return for unpaid days off. If there is a shred of common sense among the 12,000 members of the State Employees Association, it should be apparent in a “yes” vote.

Any other outcome will be bad for the state employees and its citizens at large. While furloughs will no doubt affect state services, the loss of so many state workers would have a far more devastating effect.

NH House to hear and talk about taxes

The Nashua Telegraph runs the Associated Press preview of next week's Tax Summit at the State House.

The Ways and Means Committee sessions will be Oct. 21 and Oct. 22. Participants will be asked to address the current situation and what they perceive the revenue structure would be in the future. Guest presenters will also be asked what they like and dislike about the current tax structure and how they would change it.

Sunday Column Rundown

Kevin Landrigan in the Nashua Telegraph- Lots of political stuff in there, but he does predict that state employees will narrowly approve the contract deal voted on last week.

With seniority playing a major part in who would get laid off, many state workers in these departments have a pretty good understanding whether they’re under the knife or free and clear even if the layoff is carried out.

With 6,800 voting, that means a super-majority of those casting ballots will enter the exercise expecting that if they vote the contract down, they’ll still have a job.

Then what drives them: the naked self-interest of not having to do without an estimated 3.5 percent of pay that comes with furloughs or the compassion that would oppose throwing any state worker out on the street in this tough economy?

I've predicted they vote down the contract when votes are counted tomorrow, so one of us will be right, and one of us will pretend this never happened.

Capital Beat in the Concord Monitor- pretty much all politics this week, focusing largely on the 2nd CD.

Under the State House Dome in the Union Leader- not online yet.

City Hall in the Union Leader- requiring city department heads to live within city limits, and lots of stuff about the upcoming city election.

Top lawmakers join in backing taking

Kevin Landrigan reports in the Nashua Telegraph on the Amicus Brief filed last week by Democratic legislative leaders in the JUA Lawsuit.

Among the legal arguments was the assertion that taking the money from the Joint Underwriting Association was not simply to balance the two-year state budget but to preserve state programs that make health care more accessible.

Lawyers for Lakes Region Hospital, Derry Medical Center and Dr. Georgia Tuttle had characterized using the surplus as a “money grab.” “There is nothing superficial about what is at stake, and that it can be asserted the public policy interests involved are more than merely financial ones,” Frydman wrote.

Senate Republican Leader Peter Bragdon, of Milford, saw no point in GOP opponents of this JUA move preparing their legal arguments.

“There are plenty of capable parties making our assertion we first made early on that taking this money was in violation of the state Constitution,” Bragdon said.

Sunday Column Rundown

Yesterday's political columns were, well, political. But they did report some on state policy as well.

Under the State House Dome, Tom Fahey writes about the upcoming SEA vote on the state contract, and some problems the union has had getting the ballots out properly.

SEA leaders are downplaying the errors that led to some members getting more than one ballot. Spokesman Mike Barwell said a problem with an address label printer led to some duplicate envelopes being sent out. In other cases, two ballots got stuck together and went into a single envelope.

Best reckoning by SEA is that 16 duplicate envelopes went out, and that 40 or 50 people got double ballots.

"At worst it amounts to .008 percent of the membership -- statistically pretty insignificant," Barwell said.

Fahey also writes about the upcoming Veto Day in the Legislature, with the medical marijuana bill drawing the most attention, and on our recent study on vanity license plates.

In the Monitor's Capital Beat column, Shira Schoenberg reports that the State Employees Association is pointing to the large number of vacancies in state positions as an alternative to furlughs or layoffs.

The Legislature has mandated that Lynch find $25 million in personnel savings. "It's hard to believe that the governor can't find $25 million of general fund monies somewhere in that 123-page list of vacant positions," the State Employees' Association said in an e-mail to its supporters last week. Jay Ward, SEIU political director, said the state should examine unfilled positions before resorting to layoffs.

Ward said the list proves that state employees have already taken a hit. "For every person that doesn't get hired, we're picking up the slack for all of those unfilled positions," Ward said. Lynch is asking state employees to give up another $25 million, Ward said, but "how much has he already taken in personnel cuts?"

The vacancies won't save the day for the SEA. Many are not funded with General Funds, where the $25 million in savings has to be found, many are unfunded already in the budget, and more importantly, many have already been counted in the budget. We've done extensive reporting on the Executive Order hiring freeze put in place in February 2008. Those savings have been built into the Legislature's plans, and can't be tapped again. Schoenberg also writes about the 680 House bills filed for next year's session.

In the Nashua Telegraph, Kevin Landrigan writes on the SEA's vacancy argument, the dispute over whether state agencies should have emailed an op-ed on the contract to employees, and the latest news on state revenues.

Tax, fee revenues $26m short

Kevin Landrigan reports in the Nashua Telegraph that state revenues at the end of September are short of the budget plan, but not as bad as they could have been.

Administrative Services Commissioner Linda Hodgdon said she took some solace September was a big revenue month, and the state’s revenue shortfall of $8.5 million was smaller than the one in July and August combined.

“We knew going into this we were going to see some negatives at the beginning of the year, and hopefully, we will see more positive going into the next calendar year,” Hodgdon said.

Senate Republican Leader Peter Bragdon, of Milford, said the shortfall will be a challenge for lawmakers but is smaller than had been feared to this point.

“We still take issue with the last minute decision when they put this budget together to raise revenue estimates by $75 million. I think we need to get later into the year to know for sure whether these estimates will hold up or not,” Bragdon said.

In the Concord Monitor, Shira Schoenberg says the state budget is showing some encouraging signs.

Colin Manning, spokesman for Gov. John Lynch, attributed the fall-off from predictions to the economy. "Revenue numbers from September show the economy continues to struggle, which is why we have to continue to watch revenues and spending very closely," Manning said.

But overall, the numbers were positive for the state.

Last month, Republicans raised alarms when revenue predictions fell $17 million short in a month that was expected to bring in just $111 million. But this month, even Senate Republican Leader Peter Bragdon was satisfied.

"Next month, October is supposed to be another high month and if that kind of performance can repeat, things will look on a better footing," Bragdon said. "It's certainly a very positive sign."