- Associated Press - Thursday, February 12, 2015

CONCORD, N.H. (AP) - Higher education and health care emerged as the top spending priorities in New Hampshire Gov. Maggie Hassan’s proposed $11.5 billion two-year state budget, but Republican lawmakers say they won’t support new revenue sources she is proposing to pay for the increases.

Hassan’s budget, presented to the Legislature on Thursday, is a 6.4 percent increase over the current state budget, but the majority of state agencies are not receiving more money.

“This is a tight budget that reflects difficult choices,” Hassan told lawmakers.

Hassan is proposing half a dozen new sources of revenue, tax or fee increases estimated to bring in $126 million over two years and projects modest increases in annual revenues from businesses and tourism, among other sources. She includes $4 million in the capital budget to continue studying bringing commuter rail to New Hampshire.

The House and Senate will write their own versions of the budget and a final version must be signed by June 30.

Here are key parts of her budget proposal.



Hassan’s plan gives $13 million and $6.5 million more to the university and community college systems, respectively. The community college system plans to lower tuition, but the university system says $13 million isn’t enough to freeze tuition as it had hoped. The system faced large budget cuts in the 2011 budget and receives some of the lowest state aid of any state university system in the country.



Hassan’s budget includes $12 million to continue New Hampshire’s Medicaid expansion plan in the second half of 2017, when federal funding drops below 100 percent. Her proposal expands the substance abuse treatment programs for Medicaid recipients and includes $24 million for mental health services such as the creation of a new crisis unit at New Hampshire Hospital. Her budget also adds new beds at the state veterans’ hospital.



Every school district receives at least $3,500 per student in state aid, but fast-growing school districts are subject to a cap based on what they received the previous year. Hassan’s budget proposes raising that cap from 108 percent to 115 percent and lowering state aid for schools with fewer students on free and reduced lunch than the state average. She does not include money for new school building projects or to implement full-day kindergarten. Aid to charter schools increases by $19 million.



The Department of Corrections receives an additional $25 million in Hassan’s proposal, mostly to fund the new women’s prison opening in 2016. The state spent $38 million to build the prison after female inmates filed a lawsuit over poor conditions at the existing prison in Goffstown.



Allowing Keno in restaurants and bars, increasing the tobacco tax by 21 cents, raising the motor vehicle registration fee by 35 percent and changing business tax collections are Hassan’s primary means of increasing revenue. The motor vehicle registration fee money will go into the state’s highway fund. Hassan is projecting $44 million in new revenue by allowing audits on the personal compensation business owners’ claim. Business profits are taxable in New Hampshire while personal income is not. Hassan’s budget also supports a Democratic bill that would make it harder for companies to avoid New Hampshire taxes by shifting profits overseas.



Republicans in the House and Senate are skeptical about Hassan’s revenue estimates, which are 5 percent higher than estimates agreed on by the House Ways and Means Committee. Senate and House leaders say they aren’t likely to support the tobacco tax and motor vehicle registration increases or the audit process for business compensation. “I think it’s going to be pretty difficult to get those through, especially the registration fee,” Senate Majority Jeb Bradley said.

But House and Senate leaders commended Hassan for not using money from funds dedicated for specific purposes to balance her budget and for her efforts to streamline various government services.

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