The New Hampshire Senate passed a $12.9 billion two-year state budget Thursday, sending back to the House an altered proposal over Republican objections.
In a series of mostly 14-10 party-line votes, senators approved a budget spending package that includes $5.5 billion in state spending and makes sweeping investments into social services after a year of strong revenues.
Democrats heralded it as a means to tackle mental health, school funding and health spending, while eliminating more controversial approaches from the House like a capital gains tax.
“I think that this is as fine a document as has been put together for a long period of time,” said Sen. Lou D’Allesandro, chairman of Senate Finance Committee.
And the Manchester senator touted $125.7 million left in the Rainy Day Fund by the end of the biennium — less than the $137.3 million balance added by the governor, but it was still the highest in the fund’s history, he said. “There will be a rainy day, but we will be prepared for the rainy day,” he said.
Democrats highlighted the $40 million in municipal aid that would go back to towns under the budget, which D’Allesandro said was based on a formula worked out with the governor’s office.
But Republicans took issue with a number of provisions, including one to roll back future cuts to the business profits tax and business enterprise tax, a mandatory paid family and medical leave law for businesses, and a move to allow backup funding for the state’s Medicaid expansion program from general funds.
“I’m very concerned,” said Senate Minority Leader Chuck Morse, R-Salem, speaking on the future tax reversals.
Lawmakers found common ground, voting in unison on funding for 77 new positions at the Division for Children, Youth and Families, operating expenses for a secure psychiatric hospital operated on New Hampshire Hospital grounds, an increase in funding to the university system that senators said would act as an effective tuition freeze, and a 6.2% hike in Medicaid reimbursement rates for providers.
But they splintered on other spending provisions, including a $40 million effort to increase municipal aid, an education funding formula that increased state money to schools by $93 million, and the Democrats’ paid family leave program.
Many Republicans homed in on taxes.
“There’s about 131 million in taxes on employers that are right now driving our economy,” Morse said, referencing the projected impact of reversing the taxes.
Presently, the business profits tax is scheduled to drop from 7.7% to 7.5%, though businesses won’t pay the 7.7% rate until next year. Democrats would reverse the 7.7% level back to last year’s level of 7.9%, a move opposed by Gov. Chris Sununu and Republicans, who set them in motion in 2017.
Senate Majority leader Dan Feltes, D-Concord, praised the education funding formula, calling it the “greatest increase in state education funding since Gov . Jeanne Shaheen,” while Morse criticized the budget’s “unsustainable” 13% growth of overall spending over one passed in the last biennium.
D’Allesandro said the final budget reflected “values.”
“We continue to do the kinds of things that reflect what we want for our communities,” he said.