Last week, the governor and Legislature came to a resolution on the outstanding budget issues so that a compromise was passed and signed into law. At the end, the agreement came together quickly — driven in part by the Oct. 1 deadline for the Department of Revenue Administration to set local tax rates. Without an agreement by that date, property taxes would have been higher than anticipated. The deadline focused everyone’s attention and a deal finally got done.
It is unfortunate that the budget became such a partisan flashpoint as many issues enjoyed broad support. Those issues with bipartisan support include:
Significant new resources were appropriated for the Division for Children, Youth and Families to better prevent child abuse and neglect. Gov. Chris Sununu’s first budget in 2017 began the process of upgrading DCYF after numerous instances of child abuse and neglect. The 2019 budget continues this process at DCYF and there was no disagreement about its importance.
Significant new resources were added to upgrade our mental health system. Again, Sununu provided critical leadership on this issue. In 2017, he called for new resources to alleviate mental health patients being held in hospital emergency rooms around the state. The 2017 budget took a significant first step in this regard, followed by release in early 2019 of the governor’s Ten-Year Mental Health Plan. The 2019 budget provides funding necessary to implement this plan and there was no disagreement about this either.
Education funding received broad support. My colleague Sen. Regina Birdsell (R-Hampstead) led efforts to restore stabilization grants that helps property taxpayers. Sen. Lou D’Allesandro (D-Manchester) led efforts to increase municipal revenue sharing, also helping property taxpayers. These initiatives enjoyed broad support.
However, these funding levels would not have been possible without a very strong economy producing revenues in N.H., some $200 million above expectations. And that is where the budget disagreements began. Throughout the legislative session, there were proposals to implement a .5 percent income tax, a capital gains tax and higher business taxes. Thankfully, the governor vetoed the income tax which was part of the mandatory paid family leave program and the Senate rejected the capital gains tax. But higher business taxes became the primary sticking point in the budget.
In 2015, and again in 2017, the Legislature adopted responsible and targeted reductions in our business tax rates because New Hampshire enjoyed the dubious distinction of having the 48th worst level of business taxes in the nation. The results of these more competitive rates were extremely helpful.
Our state now enjoys one of the lowest unemployment rates in the nation, among the highest median family income and the lowest rate of poverty in America. Paychecks are growing for hardworking men and women in New Hampshire. People are moving to New Hampshire due to our hot economy and we are ranked the second-best state to live in in America. And as previously noted, the hot economy has produced over $200 million of revenue above expectations.
More competitive business tax rates are not responsible for this economic success in and of themselves. But they are an important component of it in my opinion, and certainly the governor shared that view. Sununu and many of us also felt that the overall spending amount of the 2019 budget needed to be trimmed to prevent a deficit in two years.
These were the principle disagreements that were compromised on. The more competitive business tax rate is protected as long as long as revenue does not fall 6 percent below expectations. And if revenue increases 6 percent above expectations, the final tax reduction scheduled to occur in 2021 will go into effect. Provided the economy remains strong, there is a reasonable expectation this future decrease will occur. Competitive tax rates will help keep our economy strong.
Other significant issues in the budget compromise include resources to enhance workforce housing, continued commitments to curtail substance abuse, funding for families with a disabled child, improved Medicaid rates for providers, as well as funding for the community colleges and university system to keep tuition increases in check. Sununu’s proposal to fund a nursing program at UNH was also included which will directly impact the shortage of nurses throughout New Hampshire’s health-care workforce.
Again — this level of funding for identified priorities is not possible without a growing economy. So, the most important component of the budget is protecting the opportunity for economic success and good jobs for hard-working women and men in our state.
In today’s highly partisan environment, especially in our nation’s capital, compromise is often impossible. Partisans on both sides of the aisle are too often implacable; sticking to their narratives and talking points, unwilling to listen to opposing views and never willing to compromise because the “other side” might get a win. When this happens, everyone loses. Nothing is accomplished. Stalemate benefits no-one.
Too often we look at the glass as being half empty or we let the perfect be the enemy of the good. The budget compromise signed by Sununu protects people’s jobs and a growing economy while funding widely shared priorities. As such this budget compromise is a very good outcome that for New Hampshire represents a glass much more than half full.
Jeb Bradley is the Republican state senator from Wolfeboro.