- Associated Press - Thursday, March 5, 2015

CONCORD, N.H. (AP) - New Hampshire Senate Republicans made it clear Thursday they do not plan to make budgeting decisions on Democratic Gov. Maggie Hassan’s terms.

The state’s current $10.7 billion two-year budget cycle ends June 30, and lawmakers are now crafting a new budget based on Hassan’s $11.5 billion proposal for the next cycle.

The upper chamber, along party lines, rejected a proposal by Hassan aimed at keeping this year’s budget balanced and passed two tax cuts, which the governor does not support, for the next budget.

Thursday’s session put the budget tension on display even before the House passes its version, followed by the Senate in April.

Anticipating a possible budget shortfall based on unplanned health care spending and possible sluggish business revenues, Hassan directed state agencies to cut a combined $18 million. The bill before the Senate on Thursday would have also made cuts to the legislative and judicial branches, among other operations.

“We make choices when the budget leaves the Legislature, we make choices on how we want to govern, and I’m telling you those choices are not reflected in the bill that’s before us today,” Republican Senate President Chuck Morse said.

The bill also proposed transferring money from various dedicated funds to the Department of Safety’s detective bureau, which has vacancies. Democratic senators say Republicans are risking public safety by not passing the bill and the Senate should be able to swallow cuts to its own budget when state agencies are also cutting back.

“Are we saying that just because we don’t like one proposal that we risk jeopardizing public safety?” Democratic Sen. Andrew Hosmer of Laconia asked.

The budget bickering continued later in the day over two proposals to reduce the rate of the state’s business profits and enterprise taxes, two major revenue streams. Hassan has been warning for months that business revenues will end the year lower than projected, in part prompting the $18 million in cuts. She and Democrats say reducing the tax rates would “blow a hole” in the state’s budget.

As of the end of February, total revenues were running $34 million above projection.

The Senate proposals would lower the business enterprise tax, a tax paid on wages, interest and dividends, from .75 percent to .675 percent, and the business profits tax, a tax paid mostly by large companies, from 8.5 percent to 7.9 percent by 2019. An analysis from the Legislative Budget Assistant says the bills would bring in nearly $100 million less in state revenue by 2019.

But Republican senators say reducing business tax rates will make New Hampshire more competitive and the revenue loses will be offset by growth.

“All that wailing and gnashing teeth, I think, is just hogwash,” Republican Sen. Andy Sanborn of Bedford said.

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