Every two years, the State budget is the major item that is worked on by the legislature.  The legislature's work on the budget really is done in a pressure-packed four-month period of time, between mid-February and mid-June in the odd-numbered years.  Right now, the budget is in the hands of the House Finance Committee, the first legislative group that gets to review the proposed budget and its trailer bill, both of which are initially proposed by the Governor as HB 1 and HB 2 (the trailer bill is the legislation that accompanies the budget and makes statutory changes that are necessitated by what happens in the budget). House Finance is divided into three "divisions," which are the subcommittees that handle the various aspects of the budget. This was the week when those divisions needed to make final decisions on the recommendations they will make to the full Finance Committee, so it was a week of much activity on the second floor of the Legislative Office Building.

Although HB 1 and HB 2 were the focus of the work being done this week, the House Finance Committee took the extraordinary step of taking the Department of Transportation part of the budget out of HB 1 and putting it into an entirely separate bill - HB 375. It was that bill which captured the lion's share of the attention over the last few days, and understandably so, because the plan that was approved by a majority of the committee made $88 million in cuts to the DOT budget and it would lead to the laying off of about 700 DOT employees - about half of the entire departmental workforce. As the Deputy DOT Commissioner told the Committee, if this bill becomes law then the legislature may as well change the name of the Department because it will no longer be a department of "transportation."

The passage of this bill by the full House, without anything else, would be an alarming development. It is encouraging that Rep. Neal Kurk, the Chair of the House Finance Committee, has come out publicly and said that the outcome produced by this bill is unacceptable. One of the ideas being suggested to address the issue is a hike in the gas tax. That seems likely to come up as a floor amendment when HB 375 comes before the full House next week. It seems indisputable that the hole needs to be filled somehow if the state is to avoid a collapse of its transportation infrastructure and/or a massive downshift of costs to local governments (with an accompanying massive increase in local property taxes).

The Chamber will be following this closely. Something must be done. It is not exactly a good way to attract businesses to New Hampshire if the best we can say about the massive potholes is that they will be covered by deep snow five months out of the year. But don't go buying your half-tracks just yet. There is a long way left to go here in the budget process. 

As we reported a few weeks ago, discussions have been ongoing at the legislature regarding a potential compromise on the workers' comp issue.  You will remember that there were proposals pending in the House and the Senate to establish fee schedules for workers' comp services.  The issue has put members of the business community on differing sides, with hospitals and health care providers on one side and a number of other groups headed up by the New Hampshire Auto Dealers Association on the other.  This week, the Senate Commerce Committee nixed the idea of a fee schedule. On Wednesday, the Committee voted to pass an amended version of SB3 that embodies a plan worked out by Senate Majority Leader Jeb Bradley.  Under the terms of this amendment, workers comp rates would be frozen at 85% of the rates that were in effect on Dec. 31, 2014. Those frozen rates would remain in place for two years, and then they would be increased by an inflation factor tied into federal CPI.  The amended bill would also put the burden of proof on providers to demonstrate to the Department of Labor that any disputed workers' comp costs are reasonable.

This will be on the Senate floor on Thursday.

Yesterday, the Senate passed SB 1 and SB 2, the bills to make phased-in reductions to the BPT and the BET through 2019. The debate on the floor reflected the discussions which have been taking place surrounding these bills. The division of opinion on the bills ran down party lines, with Democrats arguing that the reductions are fiscally irresponsible, given the state's revenue needs, and Republicans contending that the state needs to send a message to businesses that New Hampshire is not content to keep its place as a state with some of the highest business taxes in the country. This debate now moves over to the House.

One of the most popular events on the Chamber calendar is the annual legislative crossover reception which happens every year at this time (the "crossover" is the time period or deadline that the House and Senate each set for bills to move from the one legislative body to the other). This will be happening at the Crowne Plaza Hotel in Nashua beginning at 5:30pm this coming Monday (March 23). All are welcome - go to the Chamber website for registration information. We always have many members of our tremendous legislative delegation in attendance, so this is an excellent opportunity for the local business community to have a chance to chat with the people who represent us in Concord.