Lynch announces budget cuts
Gov. John Lynch has called on New Hampshire legislators to approve sizable cuts to state programs.
By Madeline Sims, The Dartmouth Staff
Published on Friday, April 9, 2010
Gov. John Lynch, D-N.H., presented a three-part plan to cut the state budget by $85 million to legislators and the media on Thursday. The plan, which is intended to address an approximate $220 million budget gap over the next two years, includes reductions in state spending, refinancing and restructuring state debt. The plan is also designed to generate increased revenue through federal funds and an increased tobacco tax, according to a press release from the governor’s office.
Lynch will ask the Joint Legislative Fiscal Committee to approve a $25 million cut to general fund spending for fiscal year 2010 on Tuesday. He will then present the details of his plan to a joint meeting of the House of Representatives and Senate Finance Committees on Thursday, the press release stated.
Among other factors, the proposed cuts were driven by lower revenues, a high demand for social services and the loss of income the state had expected from surplus medical malpractice funds, according to the New Hampshire Union Leader. State Republican leaders, however, argue that Democrats caused the current budget problems by overspending in recent years and overestimating revenue for 2010 and 2011.
The new round of cuts, which will place state spending 3 percent below 2008-2009 levels and lay off 30 to 35 state workers, is intended to complement the spending freezes, travel restrictions and other cost-saving measures the state enacted in prior budget cuts. The state also plans to save $8.3 million in fiscal year 2011 from national health care reform and an additional $44 million in federal funding through Medicaid, according to the press release.
Most of the cuts affect the state’s Health and Human Services Department, according to WMUR. If approved, the plan would close the Ann Philbrook Center for Youths in Distress, Health and Human services staff would assume various welfare support programs and the state would make greater use of the Sununu Youth Center to avoid hiring external service agencies.
Lynch also asked the state judicial branch to save $4 million for 2011. Supreme Court Justice John Broderick urged Lynch not to implement the cuts, saying they would “undercut the branch’s ability to operate,” WMUR reported. In order to reach the budget levels in the proposed plan, the court would either have to suspend all civil jury trials, cut security costs and leave 10 judgeships vacant, or lay off 71 staff members, according to Broderick.
As part of the proposed budget plan, the state would also lower assistance to schools and municipalities and reduce its retirement contributions to public workers from 25 percent to 20 percent, a proposal that has sparked lawsuits from several local governments, according to the Union Leader.
“These cuts will not be painless, and services to some citizens will in fact be impacted. We recognize that,” Lynch told the Union Leader. “But I believe this is a balanced approach for what is admittedly a very difficult problem.”
The plan will also refinance and restructure state debt to “provide $45 million in relief to the general fund,” the press release read.
Lynch said he remains against the idea of expanded gambling, an income source proposed by several government officials.
Lynch also outlined a “debt swap” with the University System of New Hampshire in which the system will give back $25 million to the state while the state will tie $25 million to USNH’s “campus improvement program.”
The state Department of Education will lose 16 percent of its state funding. This loss will affect special education, state testing, court-ordered placements and dropout prevention, the Union Leader reported.
Meanwhile, in 2010 New Hampshire will use $80 million in federal stimulus money marked for education in 2011. While this does not change the two-year balance sheet, the move is intended to prove to bond-rating agencies that “the state is serious about budget issues,” the Union Leader reported.
If the tobacco tax increase is approved, the per-pack tax will increase to $1.98 from $1.78, a figure that remains lower than several neighboring states. This increase will generate $12 million by the end of fiscal year 2011, according to the press release.
Colin Manning, Lynch’s press secretary, did not respond to requests for comment by press time.