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Dave Solomon’s State House Dome: State budget hangs in summer doldrums

Posted: August 10, 2015

By DAVE SOLOMON

THE SKY is not falling as state government muddles through the summer without a two-year budget. In fact, it’s pretty much business as usual in Concord, according to testimony by key state officials before a special work group convened by State Sen. Jeanie Forrester, R-Meredith, chairman of the Senate Finance Committee.

Forrester has organized three work sessions with a bipartisan panel of senators and representatives scheduled to hear from a variety of stakeholders on the impact of the budget impasse. So far, the impact appears minimal, as department heads operate under a continuing resolution that funds operations at last year’s levels until Republican leaders in the Legislature and Democratic Gov. Maggie Hassan can come to terms on a new spending plan.

And that’s what Forrester says everyone is hoping for.

“I don’t think anyone on the legislative side would want to cause a feeling of crisis,” she said on Friday. “We heard from some departments that there’s an expectation we are going to solve this, which is a good thing, I suppose .”

That doesn’t mean there aren’t some complications stemming from the state’s budgetary limbo.

The first work-group session (don’t call them hearings) on Wednesday was focused on cities and towns, which need information to draft local property tax rates for approval by the Department of Revenue Administration in October.

To set those rates, municipal officials need a lot of information about how much money they’re going to get from the state, in the form of education aid, road work and the local share of rooms and meals taxes. Without a budget signed, sealed and delivered, those numbers can be fuzzy.

“Having been a town administrator in different communities, and dealing with tax rates, it’s a concern for all of us to make sure cities and towns have the right information,” Forrester said.

When the series of workshop meetings was announced last week, Forrester disavowed any political agenda, saying the intent was to help those affected by the deadlock, not keep the heat on Hassan to sign the budget passed by the Legislature. But the rhetoric took a political turn soon after Wednesday’s session ended.

“We were disturbed to learn that the governor’s office has not provided any guidance to state departments related to how they should base estimates for the Department of Revenue Administration for the purpose of setting tax rates,” Forrester said in a press release after Wednesday’s session. “I am concerned that a lack of guidance here will cause a significant burden to be placed back on cities and towns.”

Hassan’s chief of staff Pamela Walsh on Friday said Forrester’s take is not an accurate rendering of comments by state Budget Director Meredith Telus at Wednesday’s session.

“As state agencies explained to the working group, the Executive Branch has been working to ensure stability for cities and towns, and has put together a plan to set tax rates,” Walsh said. “The governor’s office met with the Department of Revenue Administration, the Department of Justice and all of the agencies that distribute funds to cities and towns several weeks ago to develop a plan to set tax rates on schedule. Each agency is using their expertise to build projections as accurately as possible about the funds that they will be providing to local communities, and our office works with agencies to reach consensus on these projections.”

Walsh said that, in terms of setting rates, state funding levels for 2015 and 2016 for aid to schools, cities and towns are nearly identical, which should limit any miscalculations.

A big chunk of money at issue is the state per-pupil grant to ensure an adequate education, but as Walsh points out, that’s set by law and is unaffected by the budget impasse. The split on rooms and meals tax revenue between the state and its municipalities is mostly unchanged from 2015 to 2016.

There may be some problems in the timing of when the money is distributed, but the estimates cities and towns are working with should prove to be fairly accurate when all is said and done, according to the governor’s office.

An Aug. 17 session has been scheduled to discuss the future of the Sununu Youth Services Center in Manchester, and another on Aug. 24 for the Department of Health and Human Services.

The impasse over the state budget is expected to last well into September, when the revenue reports for the fiscal year that ended on June 30 will provide information that could break the deadlock.

dsolomon@unionleader.com

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