Sponsor's Insight

Update on State Budget Process

Act III of the five-part state budget drama ended on March 31st when the House adopted a proposal brought forth by its Finance Committee by votes of 243 to 124 on the operating budget and 222-119 on the policy bill needed to implement it (also known as the "trailer bill").

As anticipated, the House budget contains significant cuts to state spending in addition to cuts that were already made by the Governor, and the Governor's proposal remains the so-called "high water mark." In the Department of Health and Human Services alone, spending in the House budget is approximately $200 million less than that proposed by the Governor and is approximately 6% less than adjusted authorized expenditures for this fiscal year. This department accounts for about 45% of the total general fund spending in the state excluding education.

Most budget-watchers agree that the House process was more contentious this year than in the past. State House security personnel were called during a Finance Committee executive session to control outbursts from legislators and the public alike. Huge rallies took place at the State House complete with street closures and news helicopters. And, the Speaker demanded that the House gallery be cleared and then closed to the public on the day of the vote due to distractions and interruptions caused by onlookers. Despite all of this vocal opposition, a majority of House members rejected all floor amendments brought forward to restore funding to various constituencies and, as noted above, the Finance Committee proposal was adopted with no changes.

Act IV of the five-part state budget drama is now underway in the Senate Finance Committee. Briefings by the Legislative Budget Assistant are completed and agency presentations are nearly done. In addition, the committee has engaged in some discussion amongst its members. So far, topics the committee seems to be focusing on are the following:

• RGGI (Regional Greenhouse Gas Initiative)
• Department of Corrections budget
• Postsecondary Education Commission and UNIQUE college savings program
• Hospital uncompensated care/disproportionate share program
• ServiceLink.
• The impact of changes to the nursing home provider tax on counties
• LCHIP (Land and Community Heritage Investment Program).
• Community mental health system.

The committee has identified a number of items for which it would like to restore funding with a total price tag of approximately $200 million. However, with no dramatic increase in revenues expected and an unwillingness on the House side to spend more general funds than indicated by revenue estimates, exactly how the $200 million can be restored remains in question.

In addition to possible funding restorations, the Senate Finance Committee appears poised to remove from the budget trailer bill all sections it feels should have been brought forward through policy committees as part of the regular legislative process. This includes highly controversial sections related to public employees and other union issues, sections which contributed to the enormous number of people attending State House rallies when the House budget was scheduled for a vote.

The Senate will hear public testimony on the budget on April 21st and will vote on its budget proposal by June 2nd.  Then the committee of conference phase - Act V - will take place during the last weeks of June.

For those with detailed interest in the state budget, the following links to information might be of interest:

http://www.gencourt.state.nh.us/lba/fy2012_2013_budget.html (Legislative Budget Assistant documents)

http://admin.state.nh.us/budget/index.asp 

(Department of Administrative Services Budget Office)

http://admin.state.nh.us/accounting/revenue_reports.asp 

State revenue reports)

http://admin.state.nh.us/accounting/annual_financial_reports.asp (Annual financial reports)

Chamber Insight

House Labor Committee in Focus

With most of the Chamber's tracked pieces of legislation not being acted upon last week, our attention focused on the House Labor Committee where two Senate bills with significant implications for the business community were up for public hearings.

SB 86 - Fair Warnings

SB 86 seeks to require the Department of Labor to provide a business with one warning for certain violations prior to a fine. Sponsored by Nashua Senator Jim Luther, SB 86 is intended to improve the state's overall business friendliness by providing some leeway to businesses that violate state labor laws due to confusion or lack of communication. SB 86 is not intended to provide warnings to business who commit violations due to malice.

House Labor committee members heard a compelling example of how the bill may work thanks to a small business owner who testified at the hearing and shared his story. This small business owner was not aware of difference between workers compensation insurance and unemployment insurance. Alerted to the difference, the business owner sought to correct his mistake and contacted the Department of Labor for help. Staff at DOL educated him on the difference and gave him instructions how to correct the error. The business owner followed through and brought himself into compliance. Imagine this business owner's surprise when he received notice of a fine from the Department of Labor a month later for $148,000? The fine was the result of the DOL fine scale for a yearlong violation.

Now, this owner has since been assured that the fine will not be administered because there was no malice involved and he quickly brought himself in compliance. But the situation is a perfect example of how SB 86 would be useful. Rather than DOL scaring business owners with six figure fines which then need appealed at hearings, a simple warning and follow up to ensure the violation was fixed works just as well.

SB 121 - WARN Act Tune Up

SB 121 seeks to bring the employee threshold for applying the state Worker's Adjustment Retraining and Notification (WARN) Act in line with the federal standard of 100 employees or more. The current state WARN act holds that employers of 75 or more employees must provide warning when making a mass layoff. The Chamber supports this bill as New Hampshire is the only state in the northeast to have a mass layoff provision with an employee threshold lower than 100 employees. This hurts our position as a business friendly state and is counted against New Hampshire by site selectors when making decisions about bringing new businesses to the state.

Despite SB 121 having broad support from the Senate and business community, the vote could be close in House Labor. Several committee member supported the current version of the state WARN Act and appear to not agree with the concerns of having a lower employee threshold than our surrounding states.

Michael Skelton

Greater Manchester Chamber of Commerce

michaels@manchester-chamber.org