[Hpn] re: NH State News

cindy l carlson under_the_bridgeproject@juno.com
Tue, 19 Jun 2001 08:25:49 -0700

  Web Edition  Tuesday, Jun. 19, 2001    
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    News - June 19, 2001 

Lawmakers work on
budget and tax plans 
State House Bureau Chief

CONCORD — House and Senate members got the easy work out of the way
yesterday, finding where their respective budget and tax plans agree. 

The hard work comes today and the rest of this week as they try to work
out compromises on areas where they differ. They need to finish work by
Friday so amended bills can be printed in time for senators and
representatives to vote on them next week. 

Both budgets would spend about $2.4 billion over two years beginning July
1. Both chambers want to raise taxes on business to pay for state
spending, but they have serious differences on whether taxes should hit
big businesses or small. 

The fiscal year ends June 30. If a new budget is not in place by then,
the state will have to start cutting non-essential services and face the
prospect of deficit borrowing to cover other expenses. 

As lawmakers work, Commissioner of Revenue Administration Stanley Arnold
has reminded them that playing too much with revenue forecasts at the
last minute can backfire. 

In 1991, Arnold said, a committee of conference added to the Department
of Revenue Administration forecast “dramatically.” In February 1992, “the
Legislature had to revise those numbers downward just as dramatically and
raise taxes to make up the shortfall,” he said in a letter to Gov. Jeanne
Shaheen, House Speaker Gene Chandler, R-Bartlett, and Senate President
Arthur Klemm, R-Windham. 

Shaheen last week warned House and Senate leaders she will not give in to
the “blackmail” of having a badly crafted budget handed to her at the
last minute. 

House and Senate members disagree most deeply on health and human service
issues, scholarship aid, group home sites for dangerous individuals with
disabilities and the use of the state’s $20 million surplus from this

The Senate plan would restore many of the health-related budget items the
House would cut, including an expanded vaccine program for children, home
visiting programs for pregnant teens, money to maintain the Health and
Human Services computer system and $3.4 million in additional welfare

Rep. Neal Kurk, R-Weare, who chairs the budget committee of conference
and sits on the revenue panel, said he thought the groups were off to a
good start. 

“I hope we’ll continue to make the same good progress that we made today,
realizing that so far we’ve been reviewing more non-contentious issues,”
he said. 

The tax plan the Senate wrote counts on $62 million more in revenues than
the House expects, but the Senate wants to spend $103 million less on
education in the 2002-03 school year than the House. 

As its two main revenue sources, the Senate wants to raise the business
enterprise tax (BET) from 0.5 percent to 1 percent, hitting small
business, and to double the licensing fees that securities firms and
brokers pay. 

The Senate estimates that business taxes alone will raise $900 million
for the general fund and the Education Trust Fund over two years. 

The House passed a plan that would repeal the BET credit that companies
take against their business profits tax bill, hitting big business, then
raise the rooms and meals tax 1 percentage point to 9 percent. It
estimates business taxes will raise $715 million over two years. 

Shaheen has criticized both chambers. 

She said the House plan is unconstitutional because repeal of the tax
credit would effectively tax business income twice. She said she’ll veto
the budget if it comes to her unchanged. 

The Senate, she said, is inflating its total revenues from existing and
new taxes by $90 million. She threatened to veto the Senate school
funding plan, saying it would make cuts in aid to education based on an
unconstitutional formula. 

Both chambers have passed repeal of the legacy and succession tax, the
state’s inheritance tax. 

In his letter, Arnold said he walks a fine line in trying to forecast tax

He tries to use past trends and a review of the national economy in
figuring how taxes will perform, he said. 

Some taxes, such as rooms and meals, are affected by the regional

The national economy has a bigger impact on business taxes, he said. 

While he can’t predict how revenue will grow in the next two years, he
said, right now, things look stable. 

“Business taxes have not exhibited the classical signs of a downturn,
which is a slowing of estimate payments and increased requests for
refunds,” he wrote. 
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without the permission of The Union Leader. 

"Under the bridge isn't a place, It's a way of life some have to face.
 Cold and alone outside the fortunate-cant live life, cause they can't
afford it."
- Kupchun 2001 

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