CONCORD, N.H. (AP) - Republican Gov. Chris Sununu and Democratic leaders in the Legislature said Tuesday they have agreed on a compromise two-year budget less than a week before temporary funding measures were set to expire.
Democrats, who control the Legislature, had passed a $13.1 billion budget they said provided property tax relief and a boost to education funding while addressing the state’s most pressing problems. But Republicans argued it relied on one-time surplus funds for ongoing expenses and would drive the state toward a broad-based tax.
Sununu vetoed the budget in June, saying it set up unsustainable spending expectations and “job killing tax increases.” Lawmakers later passed a three-month continuing resolution to maintain current spending levels until Oct. 1.
They’ll vote on the new plan Wednesday.
“It was a long process but at the end of the day, I think both sides got a lot of what they needed, and they had to give up a little bit of what they wanted,” Sununu told reporters. “And that’s really what compromise is really all about.”
House Speaker Steve Shurtleff and Senate President Donna Soucy said they expect the new plan, which trims the total to $12.96 billion, will pass.
“The Legislature didn’t win. The governor didn’t win. But the people of New Hampshire certainly did,” Shurtleff said. “I think all sides are proud of what we came up with.”
The last governor to veto a budget was Democrat Maggie Hassan in 2015. That year, Republicans controlled the Legislature and included in their budget a series of business tax cuts to take effect over several years. Now, Democrats are in control of both the House and Senate, and they sought to halt the last phases of the cuts.
Under the compromise, the tax rates will fall, rise or stay the same depending on how much revenue they bring in. In fiscal year 2021, the rates will go down if revenues in the previous year exceed projections by 6%. They’ll go up if revenue is 6% below projections, and will remain the same if revenues are in between.
The compromise maintains the $40 million in unrestricted money for cities and towns in the form of revenue sharing included in the original budget, as well as the $138 million increase in education funding. But the education money would be allocated in a different manner than Democrats wanted, and $62 million of the total would be one-time funds.
“We do recognize, and certainly the governor does, that we need to do more work on school funding,” said Soucy, D-Manchester. “This is a budget that will last us the biennium but we do have money in the budget for a commission to look at the education funding issue. … We believe it’s important that we have a sustainable formula that lasts.”
She and Shurtleff said the budget maintains vital investments in mental health, substance abuse disorder treatment, child protection, and raises Medicaid reimbursement rates for providers.
Republican leaders in the House and Senate praised Sununu for protecting the tax cuts but stopped short of endorsing the compromise.
“While budgets always involve give and take with compromise, the Governor has provided strong leadership to prevent harm to the New Hampshire economy,” Sen. Chuck Morse and Rep. Dick Hinch said in a statement. “We don’t agree with every provision in this proposal, but we urge our respective caucuses to allow the two bills to move to a debate tomorrow.”
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