The above headline may seem like no big deal; the House always passes a budget.  But the week leading up to the vote on the budget bill (HB 1) and the accompanying trailer bill (HB 2) this Wednesday was anything but uneventful.  Over the last week, work was being done by former Speaker O'Brien and his allies to try to draft amended language that would change the versions of HB 1 and HB 2 as passed by a majority of House Finance last week. The amendment that was a centerpiece of that work directed additional funding to the education stabilization account for local schools by, among other things, raiding the State's Rainy Day Fund (indeed, essentially cleaning out that whole fund). The House also passed an amendment authorizing Keno in New Hampshire.

There were lots of mixed feelings about the budget in the House. In his remarks in support of the budget and the education stabilization amendment, House Finance Chair Neal Kurk was quick to note that he, too, had his reservations about pieces of the proposal, and that the Senate will have the chance to make significant changes when it gets its crack at the budget. He also pointed out that the Senate will have six weeks in which to do its work, whereas the House had only a little over three weeks. And he also noted that the Senate will have more up-to-date revenue numbers from later in the state fiscal year, including months that traditionally have seen stronger revenue numbers. So there is clearly an assumption running in at least some areas of the House that the Senate will have bigger revenue numbers to work with and therefore will restore some of the cuts that the House made.

In the days leading up to the vote, it looked like the budget could be derailed by a strange alliance of Democrats who thought the budget was too low and conservative Republicans who thought that the budget was too high (or who at least disagreed with the way that the budget set its priorities). But as it turned out, the Speaker was able to garner sufficient Republican support from all corners of the Republican caucus in the House and get the numbers he needed.

The budget left plenty of winners and losers (the latter especially on the DHHS and social-services side) among the many people affected by what is in there. We are particularly concerned with some of those onerous cuts that will inevitably place a larger burden on our local municipal resources and upon the already bone-lean budgets of many local social service agencies.  We are confident that, when the Senate gets hold of the budget, we'll see many of those cuts revisited. 

Remember from last week's Advocate that the task of House Leadership was to win a majority of the House members who were present for the vote.  The Speaker knew that he could count on gaining zero Democratic votes. That meant that the budget would go up in smoke if enough Republicans voted against it for any reason. So the fact that the Speaker was able to get the O'Brien folks on board and get the budget through the House was a political victory for the Speaker. Whether you agree or disagree with the substance of what was passed by the House, the Speaker pulled off a big political victory for himself.

The end result is that the Republican caucus in the House was unified in its vote on the budget.  That may seem to have been inevitable, but just think back to the splintered Republican caucus in the weeks after the vote for Speaker in early December. Would anyone then have bet that there would have been a fairly straightforward (albeit still highly controversial) party-line vote on the budget?

So now the budget heads over to the Senate Finance Committee, and as noted above, State House observers consider it to be a certainty that the budget is going to look substantially different when it comes out of the Senate in late May.  The key question at that point, as always, will be whether what the Senate passes and what comes out of the inevitable committee of conference on the budget that will meet in June will be able to gain the support of enough members of the House to make it possible for that version of the budget to pass. The House session on that vote could turn out to be even more interesting than this week's vote.

There are undoubtedly some good and some bad aspects of this budget, and probably no one in the House who voted in favor of the budget thought it was perfect (it would be pretty safe to say that no one who has ever voted for a state budget agreed with every single piece of it). We were particularly disappointed that the capital budget which also passed the House on Wednesday eliminated the $4 million in funding for commuter rail that Governor Hassan had proposed in her budget in February.

It needs to be noted that while this budget seems frugal in many respects, there is some significant down-shifting or out-shifting to businesses and local governments, and there is also some raiding of dedicated funds. For instance, in order to fill that big hole in the DOT budget, the House took $50 million in money that was in the renewable energy fund, which is money that came from electric rate payers and was collected from them for purposes unrelated to the DOT budget. Likewise, the House filled the DOT hole by using money from the increase in the gas tax, which up until now (by virtue of an amendment that was supported by the Chamber last year) was dedicated to roads and bridges alone. Then there are increases in the amounts that counties have to pay for the State's recipients of Medicaid in nursing homes, and a diversion of funds that the county and private nursing homes currently receive through the payment of a nursing home bed tax (since the tax money currently goes back to the nursing homes, this diversion in effect amounts to a real tax on those facilities). It seems inevitable that these sorts of impacts on county finances will ultimately be felt by property tax payers. Just because the State is not paying the costs of something doesn't mean that those costs go away - someone is going to have to pay up.

So as the budget moves over to the Senate, we will be keeping an eye on what the business impacts of these various measures are shaping up to be. You can be sure that we won't be the only ones. The Senate gets to work on that on Monday.