Thank you for your interest in one of our most proud efforts- business advocacy during the legislative session.Our Chamber is very proud of its efforts to represent you and all of our members in Concord. Our work would not be possible without the strong support of our friends at Devine, Millimet & Branch, whose lobbying team serves as our "boots on the ground" in Concord on a daily basis. We thank them for their unyielding support of our advocacy efforts, particularly through the sponsorship of this newsletter.This weekly newsletter is intended to give you an overview of what has happened at the State House over the past week. Read this every Friday to learn about our Chamber's lobbying efforts relating to those activities, and to preview what we are doing on behalf of our Chamber members.
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Medicaid Enhancement Tax Showdown
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As you have been reading here in The Advocateand in statewide media, the New Hampshire Superior Court recently declared that the state's Medicaid Enhancement Tax (MET) for hospitals is unconstitutional and therefore invalid. The MET brings in about $185 million a year in revenue to the State, so it probably was not much of a surprise that the MET decision prompted S&P and Moody's to announce a downgrade in the State's bond rating from stable to negative.
The problem facing the Governor and the Legislature is a complex one. State officials are saying that they believe that the tax is lawful, and the Attorney General is appealing the court's decision. However, any appeal clearly will take some time to be resolved, and it is highly likely that any ruling from the Supreme Court would not be coming out until sometime in 2015. Since the hospitals are due to pay the MET in October, and since there would seem to be a real possibility that the hospitals will not be paying that tax as long as there is a court order saying that they are not required to do so, the State is facing the prospect of being without the MET revenues for at least several months, even if the State can ultimately win the case (which of course is itself by no means certain).
The attempt to find some resolution to this problem jumped to the top of the Legislature's agenda this week, with votes by the Ways & Means Committees in both the House and Senate to recommend competing House and Senate proposals that will be voted on by the respective bodies next week.
The Senate proposal, an amendment to HB 1613, would phase down the rate of the tax and also increase Medicaid payments to hospitals. The House proposal, which is contained as an amendment to SB 369, actually includes two alternative approaches. The first of the House proposals seems to simply change some of the existing MET language and continues the tax on inpatient and outpatient hospital services. The second of the House proposals makes changes that are far more dramatic, expanding the tax base of the MET to include entities such as ambulatory surgical centers and health clinics that do not currently pay the MET.
Once those floor votes are taken, the House and Senate will each have formally staked out their respective positions on the issue and the stage will be set for the all-important Committee Of Conference where things will be finally decided, if indeed they can be decided (the reason for the highly unusual move by the House to include two competing proposals in one bill was precisely so that both of them could be discussed in the Committee Of Conference). All of the work that has been done in the Ways & Means Committees this week can be seen simply as preliminary to what will happen in that Committee Of Conference. Even if the House and Senate can reach agreement on a course of action, it will be no guarantee that the end result will be something that will get the blessing of the hospitals or the Court, which as a practical matter ultimately will have to happen if the Legislature's action is going to resolve the issue once and for all.
One thing that the House and Senate do not have going for them is time. The current House and Senate rules, which can only be suspended through the concurrence of two-thirds of the members of the body, call for all bills to be acted on by June 5th. This means that, if an agreement is not reached by that date, there will either have to be a vote by 2/3 of the members of the House and the Senate to suspend the rules, or there will have to be a special session called in order to have a vote taken on an acceptable plan. In this, an election year, no one wants to be sitting around Concord into the end of June, much less into July and August. So the pressure is on.
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House Kills Last Chance For Casino
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On Wednesday, the House did itself no favors in solving the revenue crisis when it voted by a margin of 172 to 192 to reconsider SB 366, the casino gaming bill (a bill that was supported by the Chamber). While the tally of votes on the pro-gaming side was identical to what was garnered last week (172), the anti-gaming side picked up an additional 19 votes over last week's 173.
This vote kills SB 366, and any other amendment that might come forward which the Speaker or the House deems to be substantially similar to SB 366. In the Chamber's view, given the significant revenue shortfall that is facing the State due to the MET issue, it was exceedingly unwise to rule out a significant potential source of new revenue. Let's hope that someone figures out a way to pull this proposal out of the hat this year.
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House Public Works Committee Loses Way On Sign Bill (SB 321)
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There was also some unwelcome news from the House Public Works Committee this week, as the Committee voted on Tuesday to recommend that the full House amend SB 321, the legislation supported by the Chamber that was filed by Senator Peggy Gilmour to allow for the placement of motorist service signs on highways. The bill as it passed the Senate allows these signs to be placed on highways for purposes of information about food, fuel, lodging and attractions. As amended by the Committee, however, the bill would only allow the use of these signs for attractions. This is far less than what this bill was introduced to do and far less than what we think motorists and businesses have every reason to expect to see on New Hampshire highways. We hope this will go to a committee of conference to fix the problem.
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The Senate voted 13-11 along party lines yesterday to kill HB 1403, a bill to raise the minimum wage to $8.25 next year and to $9.00 in 2016.
On Wednesday, the House passed SB 327, the bill to extend the life of the ERZ tax credit program to at least 2020 (our own Senators Bette Lasky and Peggy Gilmour are co-sponsors). There was one last bump in the road before the final vote, as there was a last-ditch attempt by some in the House to stick a marijuana decriminalization amendment onto the bill, but the House fortunately nixed that idea by an overwhelming majority (the proponents did not even reach the 100 vote threshold). This bill now heads to the Governor.
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The Retirement Announcements Continue
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This week, Senator Peter Bragdon of Milford announced that he will not be running for reelection after five terms in the State Senate. From December of 2010 through August of 2013 he was the President of the Senate, a position from which he stepped down last summer, after being named as the new executive director of the Local Government Center. Despite the controversy that attended his appointment to the LGC job, it is worth noting that Senator Bragdon's tenure as President was marked by a respectful collegiality within the Senate, a situation that at the time stood in stark contrast to the bitter partisan fighting that was going on in the House.
Senator Bragdon's announcement came on the heels of the announcement last week by Senator Jim Rausch of Derry that he also will not be seeking reelection. Senator Rausch stood tall on the gas tax bill this year, and worked to get that legislation passed despite significant opposition from some of his colleagues- never an easy position to be in.
And finally, Executive Councilor Deb Pignatelli said this week that she will be stepping down at the end of her term. As Chamber members know, Councilor Pignatelli has been a friend of the Chamber for many years, and has always acted with class and dignity during her tenure as a member of the House, a state Senator, and now as a member of the Executive Council. She cast the deciding vote on the rail feasibility study, something that her predecessor opposed. We will always be grateful for her support on this important economic development initiative, and we wish her all the best in the coming months.
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