By PAULA TRACY, InDepthNH.org

CONCORD – By one vote, the state has a new but leaner budget for the next two years, which passed Thursday following the Republican governor’s threatened veto and last-minute negotiations over Group II retirement benefits and restoring funding for Manchester schools.

The Senate unanimously agreed to those changes Gov. Kelly Ayotte wanted in a separate bill while the House approved it on 322-14 vote.

But the budget was another story. 

It passed on the Senate side down partisan lines 16-8 and in the House on a 185-180 vote after it failed on the first try, 182-183. The second budget bill, House Bill 2, which contains the needed changes in law, fees and other provisions, barely made it through the House as House Speaker Sherman Packard had to cast the deciding vote, 184-183, while the Senate passed it on a 16-8 vote down party lines.  

The $15.7 billion package, down from the $15.9 billion, “invests no new money in housing, the overwhelming, number one issue in our state,” said Sen. Cindy Rosenwald, D-Nashua. “It makes a deep, 18 percent cut to the University System driving up tuition and pushing away young talent from our state. Families will continue to struggle with high rents and hefty property tax bills while businesses will face difficulties recruiting and retaining a strong workforce,” she said.

Rosenwald added the budget does nothing for the rising cost of housing, health care, child care, higher education and energy. It cuts 18 filled positions from the Department of Corrections, she noted and issues a “tax” to the poorest families for their health care and calls for a $51 million back of the budget cut for Health and Human Services which will disrupt health care.

But Senate Republicans said the package maintains important Medicaid provider rates rather than the House’s proposal to cut them by 3 percent, returned funding for the developmentally disabled wait list and maintains local mental health services and spent more money on education than ever before.

Sen. James Gray, R-Rochester, who chaired the Senate Finance Committee, noted the budget came down to revenue estimates and the differences between the Governor’s proposed budget and that of the House were massive at $700 million. 

“We were able to bring that to somewhere near a middle point,” he noted about rising revenue projections as the year went along.

He said that if the governor’s revenue numbers are right and there is more money now than envisioned, the budget allows departments to go to the well for more money by going to the Fiscal Committee to erase some of the back of the budget cuts.

“This budget does support the citizens of New Hampshire. It does support our most vulnerable and I ask you to support it,” he said.  

Gov. Kelly Ayotte was pleased. “Today, we delivered on our promise by protecting our most vulnerable, creating an even brighter future for our children, and standing up for those who have made our state the safest in the nation. I look forward to signing this budget into law when it reaches my desk, and I thank the Legislature for passing it today.”

In the House, the budget was opposed by both a couple dozen Republicans and Democrats for different reasons, as one Republican said it goes down a path to tyranny and continues to fund higher education, essentially funding revolution.

Rep. Mike Belcher, R-Wakefield, lamented the rise of special interests “competing for the spoils by robbing the minority.”

“This funds a democratic form of government, not a republican one,” he said.

Democrats lamented the back-of-the-budget cuts and said it was the lazy way out, and noted the ramifications will fall mostly on the state’s most vulnerable citizens who depend on the state to survive, the elderly, the disabled, those in nursing homes, children and college students who will pay higher tuition.

Rep. Jerry Stringham, D-Lincoln, said the budget handcuffs the operations of government leading to severe, long-term problems including major reductions in critical government services in Health and Human Services, Environmental Services, the justice department and public safety.

He said cuts to higher education will greatly impact small businesses in the state and noted the impact will be felt for years to come as they have to pick up the pieces.

He likened the budget to the Titanic heading for the iceberg. This budget is a bad budget that is heading toward the iceberg, Stringham said. “It is time to turn this ship before it gets into the iceberg and make a better budget that both parties could be proud of.”

Between 20 and 30 Republicans in the House opposed the two budget bills creating the razor thin margins.

GOVERNOR GETS GROUP II, MANCHESTER SCHOOL FUNDING RESTORED

Republican Gov. Kelly Ayotte threatened a veto last-minute after a committee of conference on the budget left on the cutting room floor money for first responders in the Group II retirement fund and cuts to the City of Manchester schools she found to be unacceptable.

Ayotte had those restored when the Senate, using tabled House Bill 282 to increase the maximum benefits for first responders critically injured in the line of duty, returned Ayotte’s wishes for $27 million a year for the Group II with changes which would allow them to retire and would set retirement benefits averaging the highest five years of wages rather than three and capping it at $145,000 a year of wages rather than $125,000.

The proposal also did away with spiking of retirement benefits by prohibiting dumping significant amounts of unused earned time into the employee’s final year which in the past resulted in some retirees earning more in retirement than they did when they were working.

The proposed changes unanimously passed in the Senate and in the House on a vote of 322-41.

Brian Ryll, president of the Professional Firefighters of New Hampshire said “we are thrilled. We are incredibly grateful to Governor Ayotte for the support she has given us with this process,” saying for the membership that it “restores trust in the system and in the state.”

He said it will also help with retention and recruitment.

Sen. Tim Lang, R-Sanbornton, said it is not a massive recruitment tool nor a massive retention vehicle but the important thing is “we kept our promise to our first responders.”

There was bipartisan support in the Senate.

Sen. Sue Prentiss, D-Lebanon explained that a little over 13 years ago, the state made changes to the retirement system and a specific group, about 1,500 serving in law enforcement, fire services, emergency medical services, prison and parole officers across the state were impacted and lost benefits they expected to get when they signed up.

She said these people provide the most fundamental care for citizens 24 hours a day and seven days a week.

“We value them,” she said. “and this allows them to go back to the original deal.”

The bill will also increase the cap for first responders critically injured, from $750,000 to $1 million, said Sen. Regina Birdsell, R-Hampstead.

Sen. Patrick Long, D-Manchester, said the budget agreement also addresses the back-of-the-budget loss for the Manchester School District which would have lost $10 million in state education aid.

The budget now heads to the governor who is expected to sign it after reaching agreement with lawmakers Wednesday to restore full funding for Group II retirement members and Manchester’s state education aid.

Both Ayotte and the Legislature dodged a bullet Thursday by the slimmest of margins, but both sides breathed a sigh of relief for not having to spend the summer negotiating a budget.

Instead they have a budget ready to go July 1 when the new fiscal year and biennium begins.

InDepthNH reporter Garry Rayno contributed to this report.