- Associated Press - Monday, March 23, 2015

CONCORD, N.H. (AP) - House budget writers began approving a budget bill Monday that eliminates Medicaid expansion, substantially changes school funding and does not give state employees a raise they recently negotiated with the governor’s office.

The House Finance Committee will continue voting on changes to Democratic Gov. Maggie Hassan’s budget Tuesday before sending the bill to the House floor next week. The committee’s goal: Cut roughly $240 million from Hassan’s budget to match the incoming revenues predicted by the House Ways and Means Committee. The House is poised to reject all of the governor’s major new revenue options, including an increase in car registration fees and the cigarette tax.

Rep. Neal Kurk, chairman of the House Finance Committee, said the need to balance the state’s budget every two years without revenue from a sales or income tax makes the process “difficult,” but a good thing for the state.

“It forces us every two years to make considered decisions about how limited resources should be spent,” he said.

The community college and university systems will both get less than what Hassan ordered but more than their existing budget. Other departments, however, such as the Department of Health and Human Services see services eliminated entirely.

Most of Monday’s votes were taken on party lines.

“I can’t fathom how anybody can vote for this with the idea that we are doing the best we can for the state of New Hampshire not just today, but two years from now, five years from now or 10 years from now,” said Democratic Rep. Dan Eaton.

The House must send the Senate a budget by April 2, but passing it may be difficult. Democrats will not back a budget that eliminates Medicaid expansion and a faction of the Republican caucus may not be amenable to a budget that increases spending even slightly.

The Senate’s version of the bill is likely to be substantially different, as senators have the benefit of seeing revenues from April, the state’s largest month for business taxes, which help them more accurately predict revenue growth for future years.

Significant changes in the House’s budget include:

- It does not continue the state’s Medicaid expansion plan after it sunsets in 2016, saving the state $12 million but kicking more than 35,000 people who have gotten health care under the plan off their insurance. The plan is set to sunset without reauthorization when federal funding falls below 100 percent in 2016, but Hassan included $12 million to cover the lower federal funding in anticipation of the program continuing.

- It cuts a benefit in Hassan’s budget that extends substance abuse treatment available on the Medicaid expansion plan to traditional Medicaid patients. The savings is estimated at $3.3 million.

-Most public school districts are poised to lose money through reductions in “stabilization grants,” designed in 2012 to hold districts harmless from funding changes that would have reduced their state aid. But the budget also eliminates the cap on aid for rapidly growing districts and fully funds catastrophic aid, given to help cover the costs of children with high needs. The changes will take effect in 2017 and save the state $46 million.

-Creating the Office of Operating Performance, which would include a state chief operating officer, is delayed by one year to save $1 million.

-Eliminates funding for a number of positions in the Department of Safety including all part-time Department of Motor Vehicle jobs, several state troopers and jobs within the state police forensics lab

-A raise for state employees, recently negotiated, is not in the House budget, saving the state $12 million. The budget also makes significant changes to retirement contributions and requires all employees to cover the cost of the so-called “Cadillac tax” in their health plans

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