For Immediate Release
July 23, 2015
CONCORD – In an effort to reach a fiscally responsible, balanced and bipartisan budget agreement, Governor Maggie Hassan today offered a compromise proposal that includes and accelerates business tax cuts while also protecting the state’s long-term fiscal outlook and ability to support critical priorities such as combating the heroin crisis, holding down the cost of college tuition, continuing to strengthen and increase access to health coverage, and maintaining our roads and bridges.
“Over the past several weeks, I have met with business leaders and citizens across New Hampshire, and while businesses would of course like to pay lower taxes, they also recognize – as the bipartisan business tax commission has said – that there are other critical priorities that we must support, including investing in higher education, substance abuse prevention, health care, and transportation infrastructure,” Governor Hassan said. “This plan would allow us to do both: lower business taxes and ensure that in the future we do not have to make significant cuts to those critical priorities.”
Governor Hassan’s proposal lowers the Business Profits Tax to 7.9 percent for the 2016 tax year, three years earlier than the Committee of Conference budget, while increasing the threshold on who has to file and pay the Business Enterprise Tax, eliminating the tax completely for 5,500 small businesses. The Governor also includes funds to address the concerns raised by House Bill 550 and calls for stronger public process with additional public hearings on the language in August. The compromise proposal would also eliminate the Committee of Conference’s attempt to double count 2015 dollars to balance Fiscal Year 2016.
To offset the business tax cuts and the use of carryforward funds, the Governor’s compromise proposal would increase the cigarette tax by 21 cents – still lower than neighboring states– and include parity for e-cigarettes and other tobacco products. It would also increase the state portion of motor vehicle registration fee by five dollars and close a tax loophole restoring the Taxpayer Protection and Fair Documentation requirements to the state’s tax code, ensuring that all taxpayers are treated fairly.
With these steps, the Governor’s compromise proposal would strengthen efforts to combat the heroin crisis, providing $5.7 million in additional funds over the Committee of Conference budget for substance abuse prevention and treatment. Following a recommendation by Senior Director for Substance Abuse and Behavioral Health Jack Wozmak, the compromise proposal also moves up extension of substance abuse benefits to the existing Medicaid population to January 2016, and provides additional funds to support other efforts, such as a drug court in the City of Manchester.
The compromise proposal also adequately funds winter maintenance for highways, restores travel and tourism funds, and includes the modest cost-of-living pay increase for state employees that was previously negotiated in good faith.
Governor Hassan’s compromise proposal also recognizes that Republican legislators want to take up reauthorization of the bipartisan New Hampshire Health Protection Program – which is providing coverage to more than 41,000 hard-working Granite Staters – outside of this budget. It does not remove the sunset for expansion, but it includes funds for the legislature to collect data on the program in the interim and ensures that funds are available to move forward if the program is reauthorized at a later date.
“As providers, health care professionals and other stakeholders tell me, the single most important step we can take in battling the opioid crisis is reauthorizing the New Hampshire Health Protection Program, which is already providing substance abuse services to thousands of Granite Staters,” Governor Hassan said. “I have heard from Republican legislative leaders that they are not willing to act on reauthorization in the budget, so this proposal does not move forward with reauthorization at this time.”
“Although we will reluctantly agree to wait to take up legislation reauthorizing expansion, we must do everything that we can between now and then to provide certainty about the future of the program and ensure that we have the data that the legislature needs,” Governor Hassan added. “We must reauthorize this critical program as quickly as possible to continue bringing tens of millions of dollars in federal funds into New Hampshire to increase our substance abuse treatment capacity.”
The Governor is encouraging the legislature to work in August so the full legislature can take up a compromise budget when they return on September 16.
“This proposal is a compromise, and it is an effort to address the real concerns of Republicans and Democrats in the legislature,” Governor Hassan said. “It provides Republicans with what they have indicated is their highest priority – cutting corporate taxes – in a faster timeframe while addressing concerns about long-term fiscal responsibility and protecting our ability to support critical economic priorities.”
“While people on both ends of either party may still want a different plan than the one I am proposing, this plan attempts to address the concerns of both parties in order to reach a common-ground that has enough votes from both sides of the aisle,” the Governor added. “I hope that this proposal can serve as a basis for bipartisan compromise and negotiation.”
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