State Proposed Budget Spends More than Existing Budget

April 17, 2015


by Lynne Ober

Once again budgets are being worked on by the state and once again cries of the sky is falling can be heard.  However, when one examines the budget that left the House of Representatives early in April, one sees a different reality.  In actual fact, the budget that the House passed spends $75 million more in general funds than the current budget.

What are general funds, you might be asking?  General funds are funds raised by state taxes and by fees, such as the fee you pay for your driver’s license.

The House budget is a balanced budget that spends $11.2 billion from all funds, including $2.7 billion in general funds, for the FY 2016 – 2017 biennium.

Overall, this budget spends an average of $4200 per year per New Hampshire citizen.

In addition to the increased spending in general funds, the House budget also spends $362 million more in total funds than the previous budget.  Total funds include all sources of revenue, including federal funds we receive to pay for certain programs.

There are no new or increased taxes in the House budget.  So, New Hampshire residents who are on a budget will not have to pay more to the state.  The revenue projections used in crafting this budget were unanimously approved by members of the House Ways and Means Committee.  Democrats and Republicans said the revenue estimates were accurate for the time.  Remember these were done in February.  By the time the budget leaves the Senate, the state will have actual revenue receipts for four additional months – often resulting in more revenue than predicted.  When that happens, that additional revenue is also accounted for in the budget.

The Department of Health and Human Services (DHHS) will receive $78.4 million more in general fund spending in the approved budget than they are receiving in the existing budget.  It funds the Department of Health and Human Services at $4.3 billion in total funds, and $1.2 billion in general funds for the FY 2016-2017 biennium.  This will provide additional funding for uncompensated care payments to hospitals and community mental health services

Overall, the DHHS budget spends an average of $12,000 per year per person receiving benefits.  Over the years, more application processes have been made available on-line and more people are using this on-line facility.  As a result, funding to a private organization, ServiceLink, has been cut.  ServiceLink does not provide any direct services to residents and the Commissioner felt that he had enough administration and needed to concentrate on delivering actual services to residents.

The total increases the total funding for the Department of Health and Human Services is $141 million over the FY 2014 actual and FY 2015 adjusted authorized spending levels for the biennium when adjusted for higher uncompensated care payments.  As mentioned, general funds increase by $78.4 million above current biennial spending levels.

Reductions in the cost per youth for operating the Sununu Youth Services Center were made and the Sununu Youth Services Center will now be funded at the average daily cost of community service providers and provides the option for the Department to operate more efficiently, to privatize operations or to send children to community service providers.  This is partly because additional services will be provided as a result of increasing the age of minority for juvenile delinquency proceedings from 17 to 18 years.  As a result more children will be serviced and the overall cost of administration will be spread across a larger resident population.

And lastly, the DHHS budget provides funding for the Child Protection and Child Development Programs at existing levels.

The DHHS budget increases general funds by $1.6 million to reinstate the Medicaid Breast and Cervical Cancer program and Medicaid coverage for Low Income Pregnant Women program upon repeal of the New Hampshire Health Protection program.  As well as allowing Medicaid managed care organizations to use their own preferred drug lists to save $2.5 million in general funds each year of the biennium.

To achieve some of the changes the DHHS Commissioner requested, the Meals on Wheels program was funded below current level.  However, the House requested that this funding be made a priority and the Senate has already reported that they have revenue to fund this program at its existing level.

No changes have been made to the pension system for four years, so towns and school boards can expect to pay the same amount as before.  In both cases, payment will only go up if the voters have approved more raises.

In the current budget 44 towns fail to receive all of their student funding because there has been a cap on adequate education grants.  The proposed House budget removes that cap and level funds catastrophic aid for special education in FY 2017.  Towns such as Windham and Pelham will finally begin to receive all of their educational adequacy funding – something not done in the existing budget.

The budget also provides approximately $15 million over the biennium in tuition and transportation assistance to local schools, as well as continues and funds efforts to lower pupil drop-out rates.

Cities and towns will receive $127.6 million for meals and rooms distribution over the biennium.  This maintains FY15 levels through FY16 as proposed by the Governor and keeps the funding level in FY17.

The budget fully funds the Land and Community Heritage Investment Program (LCHIP) by appropriating $7 million over the biennium, which is, in turn, given in grants to cities and towns.

Highway Block Grant funding remains fully funded, as does the Department of Transportation and the Department of Safety.  The budget also provides more than $14 million over the biennium for municipal bridge aid.  It does postpone any new DOT equipment purchases.

There is increased funding for Legal Aid, which will be of help to towns and residents who need legal support.

Funding was provided to support the eFile program, which will allow businesses and residents to file taxes electronically.  Business support remains as originally budgeted.

State retirees who are younger than 65 will begin to pay a 20 percent premium on their health insurance, which remains free for those state retirees who are 65 or older.  This does not impact town or school district employees.

In addition, funding was provided for eCourt, which will develop an end-to-end electronic court case processing system in a digital environment, eliminating paper processes and decreasing case processing time, while increasing information management efficiency, accuracy, and constituent service through leveraged uniform work processes.  This will provide better access for residents to court documents.

Counties will see a benefit in the budget as well.  Funding was provided for the Judicial Branch to raise payments to County Sheriffs.  In addition, legislation for the new program that will lower county costs by removing prisoners from county jails 60 to 90 days sooner, thus ensuring a more rapid trial system.

So, the bottom line to the budget is that it spends $75 million more in general funds than the existing budget.  Although there are no new taxes or fees, this increase in general funds is directly related to an improving economy.  Every program was reviewed.  Some have additional funding and some, which are waning, have less.  For every resident in New Hampshire, the state will spend an average of $4,200 and if you are one of the people receiving assistance from DHHS, that budget will spend an average of $12,000 per person.