Legislature OKs budget bailout bill

Jun 10, 2010 — The Telegraph (Nashua, N.H.)

Kevin Landrigan

Jun. 10, 2010 (McClatchy-Tribune Regional News delivered by Newstex) -- CONCORD -- In a tedious, one-day special session Wednesday, the New Hampshire Legislature adopted state budget bailout legislation that supporters claim will erase a $295 million deficit for the two-year cycle ending June 30, 2011.

State Rep. Marjorie Smith, D-Durham, the chief House budget writer, said the final compromise became a classic give-and-take that makes more cuts than some Democrats would prefer but not nearly as many as the conservative minority Republicans desire.

"I hope no one leaves this room happy because there is nothing to be happy about, but you can leave this room knowing you have fulfilled your obligation to act as you have to act," said Smith, who is retiring from the House at the end of this year. "You do not have the luxury to say, I will stop the state from being able to function, to deliver services for people who have no other place to go."

In more than six hours of debate, the House methodically mowed down nine attempts to cut spending and tax increases from the plan.

GOP leaders such as Deputy Minority Leader David Hess, R-Hooksett, called the final product a phony solution to the deficit dilemma, such as a $60 million gain to come from selling or leasing unnamed state assets.

"This is so incredible to defy description. It shouldn't be part of any budget bill; it does not raise any money," Hess said. "Let's not play games to this degree and totally fabricate the fact that we are raising $60 million when in fact this portion of the bill raises nothing."

A relieved Gov. John Lynch said he looks forward to signing the bill and praised lawmakers for settling an intramural dispute that divided House and Senate budget negotiators for weeks.

The plan barely cleared the House, 177-167; the Senate voted to pass it on to Lynch by a 14-10 margin.

The final package (HB 1A-Special Session) did not include legalizing expanded gambling at racetrack slot parlors or casinos. Instead, it created a six-person Gaming Regulatory Oversight Authority to design a beefed-up regulatory structure should lawmakers ever make such betting legal.

The state Senate approved, 14-9, a second bill legalizing 10,000 slot machines and casino-style table games at four, competitively chosen locales.

Sen. Lou D'Allesandro, D-Manchester, said unlike the budget deficit solution, this bill (SB 1A-Special Session) would offer hope to the nearly 50,000 who are unemployed in the midst of the recession.

"We have provided an opportunity for thousands of our unemployed citizens to gain work," D'Allesandro said.

Jim Rubens, chairman of the Granite State Coalition Against Expanded Gambling, said the promised profits from slot machines were illusory and social costs from these casinos would every year run in the tens of millions of dollars.

Rubens urged the House to resist the gambling lobby and industry's political pressure that has kept this issue in the forefront throughout the 2010 session.

"If slot casinos are legalized, the bullying and uncivil behavior that shocked witnesses to the conference committee proceedings will become standard operating procedure," Rubens warned. "The gambling industry will become the dominating, Statehouse special interest and will use these tactics to muscle the Legislature almost every session to get lower tax rates, more machines, more casino locations, lower age limits and whatever else Las Vegas wants from New Hampshire."

About eight hours later, the House of Representatives rejected the expanded gambling bill by a vote of 191-141.

The two parties bickered over whether to approve a separate bill that repealed the controversial dividends tax on limited liability companies. The budget compromise repealed the tax and House and Senate Democrats in lockstep tabled or effectively killed the stand along LLC tax repeal bill.

The only moves that got bipartisan support Wednesday were the requests of officials from three communities to get special requests tacked onto this final bill of 2010.

Nashua Mayor Donnalee Lozeau asked and got into the compromise the maximum financial flexibility should her city decide to take ownership of Pennichuck Water Works through a stock sale.

A second local amendment ratified the decision of Hudson voters at Deliberative Session last spring to set aside $25,000 from its capital reserve for the local senior center.

"Let's adopt this for the benefit of the seniors and the taxpayers in Hudson," said Rep. Shawn Jasper, R-Hudson.

The House agreed on a vote of 328-8.

The final municipal matter was to legalize the town of New Ipswich's budget warrant.

When House and Senate budget negotiators 10 days ago deadlocked over whether gambling should be part of the solution, Lynch called for the special session.

In the days leading up to Wednesday's vote, House and Senate Democratic leaders met in secret talks with Lynch to make recommendations that made about $40 million in final trimmings to the current budget.

They sliced spending for land preservation, renewable energy, the judicial system, community colleges, the teaching of high-cost special needs students and care for catastrophically ill patients in hospitals.

The closed-door horse trading also moved to increase taxes for insurance companies, canceling a final tax cut already in state law to lower the tax on premiums this fall down to 1 percent from 1.25 percent currently.

The House wanted to increase the tax to 2 percent while the Senate wanted state law to remain the same, letting the levy go down to 1 percent.

Sen. Robert Letourneau, R-Derry, protested in vain at the taking of $100,000 from a fund that supports education programs for would-be motorcycle riders.

"You are stealing our money," declared Letourneau, who is not seeking re-election.

On Wednesday, the only item removed from the final compromise was a special interest provision to pay unused sick leave time to a city of Manchester employee who lost out because she never joined the judicial retirement system.

Her patron senator, Betsi DeVries, D-Manchester, lobbied to attach this language to three different bills even though the House had overwhelmingly voted against this request as a separate bill.

Calling it "outright blackmail," Rep. John Henson, D-Exeter, appealed to the eleventh-hour hostility between House and Senate factions that can surface at the end of any difficult legislative session.

"This was a trade-off. We are going to trade our honor and the intent of this House so we can get the Senate to agree with us, not on the merits but on the desires of one or more senators," Henson said. "I am appalled. I am appalled our honor is for sale, money or not."

The House agreed with Henson and struck the provision on a vote of 202-159.

Newstex ID: KRTB-0136-45950595