February 1, 2009
Union Leader
NH facing a $600m problem, meanwhile, waiting for bailout money
How’s Lynch’s budget? In a word, unsettled. Not only is there an estimated $500 million shortfall in revenues to pay for the next two years, there’s also the unresolved deficit of $75 million or more for this fiscal year. Added up in round numbers, that’s a $600 million problem.
Cuts, reorganization, efficiency are all part of the work to get a balanced budget, Lynch said.
“Everything is on the table — in terms of costs,” he said.
There will be no sales or income tax.
At the same time Lynch and his team are sweating bullets over details, federal money is close to raining down. The economic stimulus bill that will bring money for highways, Medicaid, schools, health clinics, law enforcement, water and waste treatment facilities — and more — is moving toward President Obama’s desk for a mid-February signing. That’s about the same time Lynch has to unveil his budget proposal. That leaves all this budget work up for a severe re-write, depending on the terms of the final federal package.
Lynch said he is not counting the money until it arrives.
To avoid dropping too many bombs during his budget speech on Feb. 12, Lynch let a few cats out of the bag last week.
He made clear layoffs of state workers are coming and warned cities, towns and school districts they’ll share the pain in the form of lower aid and revenue sharing.
Lynch said programs are being cut and expenses trimmed. As programs go away, so does the need for the workers who administer them. Just one month ago, Lynch said layoffs would be a “last resort” for budget savings. That was before the State Employees Association dug in its heels and refused to renegotiate the 5.5 percent raise members started collecting in January.
As for that $89 million Rainy Day Fund, unless federal money changes things, Lynch probably will tap into it to balance this year’s budget. He still describes that action as “a last resort.”
But state workers know what that means.
Pain sharing could mean a reduction in Meals and Rooms Tax money that gets sent back to towns that collect it. Lynch said he will be careful about downshifting tax burdens to local government, but in times like these, he said, “we’re all in this together.”
We may see the school building aid program start fading to black. The program dates from a time before Supreme Court rulings in the Claremont cases changed the landscape of school funding. Since then, the state has spent increasing amounts on aid to local schools.
This year the state distributed $527.4 million in adequacy grants. Next year that will go up by at least $50 million a year. Lynch said education is getting close scrutiny, but he won’t tinker with the current aid formula. With that, building aid is likely to shrink if not disappear. If not, about $40 million in building aid will have to be bonded this year.
Changes are also in store for the prison system. Lynch said he has not discussed privatizing operations, but he did note there are five facilities that might be ripe for consolidation. We have women’s prisons in Goffstown and Shea Farm in Concord, and men’s prisons in Laconia, Concord and Berlin.
Goffstown is an aging building the state rents from Hillsborough County. Corrections Commissioner William Wrenn has made replacing it a priority. Shea Farm is not much more than a big farmhouse and outbuildings for minimum security prisoners. Laconia is also a minimum security facility. It prepares male inmates for re-entry to society through a variety of programs, including vocational training.
Lynch also is looking at the courts. He may urge delaying the launch of a business court, called for under legislation that passed last year.
Lynch’s attitude toward the costs that may be involved in hiring a judge and setting up the court: We’ve been able to get along without it for a lot of years.
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ODDS ON GAMBLING: Gambling bills come out of the gate this week in the House when two measures that would allow full-fledged casinos come up for public hearings.
The gambling landscape changed last week, with a change of power in the Massachusetts legislature. Rep. Robert A. DeLeo is the new Speaker of the House there, after the resignation of Rep. Sal DeMasi. DeMasi was stridently anti-gambling. Not DeLeo, who has laid out his gambling priorities.
“I like slots at the racetracks,” DeLeo told the Boston Globe.
Then we can have the casinos. Gambling advocate Sen. Lou D’Allesandro said he served on regional legislative committees with DeLeo.
“I think we are in a creative competition to do what’s best for our constituencies. We have an opportunity. If we had done this 10 years ago, DeLeo’s ambitions would be a non-issue,” D’Allesandro said.
At a Business and Industry Association forum last week, polling data was batted back and forth, with opponents and advocates calling up numbers that helped their case.
The biggest boost expanded gambling has gotten came in a 2005 poll D’Allesandro pointed out; the Becker Institute found 68 percent support for a “racino” that would return half of gross profits to the state.
Support fell to 55 percent for a North Country casino if the state took 20 percent of the gross.
More recent results come from an April 2008 University of New Hampshire Survey Center poll. The numbers show a steady upward trend in acceptance in three polls since 1999. Former Rep. Mike March said last year’s UNH poll showed only 40 percent support.
UNH Survey Center director Andy Smith said Friday the figure was actually 37 percent — hardly overwhelming.
Smith described gambling as the “least unpopular option” when taken with higher property taxes, or a sales or income tax.
“None of the options are particularly popular,” he said.
Oddly enough, 37 percent also said that higher property taxes would be the most harmful to the New Hampshire economy. Democrats showed the lowest rate of support for gambling, at 31 percent.
Remember, this is the party that controls the Legislature.
Smith said he will begin an update of the gambling poll this week. Results, he said, could be ready by Feb. 11 or 12 — just in time for Lynch’s budget speech.
Lynch has said all along that he needs to see evidence that expanded gambling will not have a negative impact on the state’s quality of life.
A year ago, he said that evidence would need to be “overwhelming.”
Last week he kept the bar high, saying he wants “compelling evidence,” not just run-of-the-mill stuff.