Brad Cook, Sheehan Phinney Bass + Green

One of the most important messages a New Hampshire governor gives is the budget address. For a first term governor, it is an especial challenge, as it has to be given about six weeks after taking office, and it sets forth the governor's plan for the entire two years of the term to which the governor has been elected. In this context, Governor Maggie Hassan presented her budget address on Thursday. 

The address, and reaction, reflected much of the contradictions in New Hampshire public discourse. Of course, Governor Hassan took the "pledge" and cannot contemplate broad based taxes to address spending needs in the state. Or is that revenue needs? Either way, she is in a box in terms of available revenue.  On the other hand, she has proposed increased funding for education, mental health, people with disabilities, and other critical needs, long neglected by the state budget.

What to do? According to the Governor's own press release, she made a proposal that "cut $500 million from Agency Budget Requests." Her budget, according to the release, keeps spending below 2008 levels. What does any of that mean? Is a reduction from requests a reduction in the budget, or an increase? Is it any improvement to provide the state less service than five years ago? Who writes these press releases, anyway?

"New Hampshire stands at the threshold of a bright new future," the Governor said. And she said we must lead the nation into the future. In her proposals were increased spending for higher education, mental health, a new woman's prison, added community healthcare beds, added state troopers, attorneys in the Attorney General's Office, CHINS funding, and many other spending needs.

How does she propose to do this? Largely, a high end casino, with resulting license fees, will produce $80 million in revenue, she predicts. Those funds, according to Governor Hassan, will come in the first biennium, and be used for infrastructure, like roads and bridges. She offers to work with solons and others to study the other issues in the budget. More cautious observers, event those supporting expanded gambling, warned against including revenue from such a scheme in the operating budget.

The immediate reaction was one of wonder. That of those opposed to expanded gambling (gaming to its proponents) was to term the proposals as follows, "Governor Hassan's decision to include casino license money in her proposed budget is a recipe for budget chaos," said Jim Rubens, former state senator from Hanover and head of the Granite State Coalition Against Expanded Gambling. In explaining his position, Rubens stated that the need for quick revenue and the Governor's call for "highly regulated" casino gambling were contradictory, since the development of a full system of controls would not allow for revenue in the current biennium. He also cautioned against the sharp fall-off in revenue after the first license fees were received, and the social costs of expanded gambling.

The proposal for the dedication of the revenue from the new casino to infrastructure, rather than an increase in the gas tax to pay those costs, surprised many. If the state needs to repair its roads and bridges, opponents argue, why not impose the tax on users of that service. What is the connection to gambling?

In short, the Governor's address and proposals seem to have ignited controversy, on needs, revenue and timing. Many question the revenue assumptions, the priorities, and the chances of passage. Traditionally, a Governor's budget is dead on arrival in the Legislature, although with a Democratic House of Representatives, and a closely divided Senate, who knows what will happen with Governor Hassan's budget proposal. In any event, the budget message usually is the first, and not the last, shot in the budget battle, with the final resolution far off and yet to play itself out.