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Plymouth Dems take a look at state budget

November 22, 2011
PLYMOUTH—Last Wednesday night, the Plymouth Area Democrats (PAD) hosted the latest in a series of policy-oriented programs designed to provide educational information to local citizens.

The program featured a presentation about the state budget by Jeff McLynch, from the non-partisan New Hampshire Fiscal Policy Institute (NHFPI) in Concord.

The well-attended state budget forum followed the Plymouth Area Democrats' regular monthly potluck and meeting at the Plymouth Regional Senior Center.

In a cogent summary of New Hampshire's FY2012/2013 "budget journey," McLynch outlined the state's budget challenges, and some of the consequences of the significant spending cuts that have marked the legislature's response to the nationwide recession and the subsequent loss of tax revenues.

He began by putting New Hampshire's picture in context, providing data to show that our state is faring better than most, with an unemployment rate of 5.4 percent, compared to the national average of 9.1 percent. Job losses in New Hampshire have been less severe than most other states, while still creating a deficit of what would be needed to keep up with population growth.

Meanwhile, however, wage growth for employees in New Hampshire has not kept pace with the rest of the nation.

Median household income is substantially higher in New Hampshire than in the nation as a whole, although there is considerable disparity from county to county, with much of the wealth concentrated in southern sections of the state. Nevertheless, median household income in New Hampshire has fallen by $4,000 since 2006. Overall, the poverty rate remains higher than pre-recession levels, and is concentrated in the rural northern counties.

The FY '12-'13 budget for appropriations is $4.6 billion, with a projected revenue budget of $4.4 billion. Thus far, estimated revenues are tracking higher than budgeted, five months into the current biennial cycle. McLynch says that "significantly reduced" spending levels from prior budgets account for the entire effort to balance the budget for FY12/13.

Major cuts in the Health and Human Services budget include $115 million in payments to hospitals (along with a roughly equivalent amount in federal matching funds) for uncompensated care for the uninsured and underinsured. State cuts in Medicaid reimbursement have recently led to the situation in which 3,500 patients were notified by LRGHealthcare that they will no longer be able to see their doctors.

There is also be a $10 million cut in support for childcare, creating a 4,000-family "wait list" for subsidies, and another $4.5 million cut in the unemployed parents program.

According to McLynch, the impact of these cuts is already being felt across New Hampshire by families struggling to find resources to help them find and keep a job while providing quality care for children.

Reduced levels of support for higher education constitute the other major source of cuts in the current budget. New Hampshire traditionally has had one of the lowest levels of support for higher education in the nation, with New Hampshire students burdened with one of the highest levels of debt burden upon graduation. Cuts to the state University System will mean that in-state tuition will rise by 12.4 percent this year.

Overall, there is a $115 million cut to support for higher education in the current state budget, including a $30 million cut to community colleges at a time when these institutions may be crucial in providing the important "middle skill workers" that economic research suggests may be most needed for economic recovery in the upcoming years.

McLynch closed his talk by acknowledging that there are currently efforts underway to study proposals designed to further reduce taxes, including a proposed amendment that would require a supermajority to pass any tax increases. However, this approach is at odds with public opinion polling in the state (WMUR Granite State Poll 2011) which indicates that a significant majority of residents (73 percent) favor a more balanced approach to resolving the budget shortfall problem, including both spending cuts and tax increases.

Martin Lord Osman
Salmon Press
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