For Immediate Release
September 15, 2015
CONCORD – Governor Maggie Hassan announced today that she has reached a fiscally responsible, compromise budget agreement with Republican leadership that includes business tax cuts and the previously negotiated modest cost-of-living pay increase for state employees while protecting the state's long-term financial outlook and ability to support critical priorities for New Hampshire's families and businesses.
"From the outset, my central concern about the Committee of Conference budget was that it included unpaid-for corporate tax cuts that would create a hole in future budgets, and over the last few months, we have worked with Republican leadership to address that issue," Governor Hassan said. "This agreement puts in place a trigger, ensuring revenues are at levels that would at least sustain the current budget before additional tax cuts go into effect. It will also allow the next legislature to determine what spending or revenue offsets should be made to pay for the second round of tax cuts – before they go into effect."
"While this agreement is not perfect and does not include everything that either side wants, it is a fiscally responsible, bipartisan, compromise path forward that includes business tax cuts while ensuring long-term fiscal responsibility and safeguarding our ability to support critical economic priorities."
As part of the agreement, the business profits tax would be reduced to 8.2 percent and business enterprise tax to .72 percent for taxable periods ending on or after December 31, 2016. It also includes a trigger mechanism based on general and education trust fund revenue levels for the Fiscal Year 2016/2017 biennium. If those revenue levels are met, the business profits tax would be further reduced to 7.9 percent and the business enterprise tax to .675 percent for taxable periods ending on or after December 31, 2018, after the next legislature has an opportunity to craft the 2018-2019 budget.
"By including a trigger mechanism for the second phase of tax cuts contingent upon state revenues meeting certain targets after the first phase, we have put in place an important safeguard against a massive hole in future budgets. We have protected the state's long-term financial outlook and ability to support critical priorities in the future, and the next legislature will have the opportunity to determine any potential offsets before the next phase of tax cuts go into effect."
In addition, the compromise agreement includes the previously negotiated modest cost-of-living pay increase for state employees that was announced in February.
"Our hard-working state employees and the critical services that they provide make a positive impact on the lives of New Hampshire's citizens each and every day, and including the previously negotiated contract with state employees in this agreement is an important step toward maintaining fiscal responsibility while supporting our hard-working state employees," Governor Hassan said.
"As we continue to combat the heroin and substance abuse crisis facing communities across the state, we know that the single most important step we can take is reauthorizing the bipartisan New Hampshire Health Protection Program, which is providing coverage for substance abuse services to thousands of Granite Staters and is critical to increasing our substance abuse treatment capacity," Governor Hassan said. "Although this compromise agreement does not address reauthorization, we have taken Republican leadership at their word that they will take up legislation reauthorizing expansion as soon as possible, and I will continue to work every day with legislators from both parties and stakeholders at all levels to strengthen our efforts to combat the substance abuse crisis."
The legislature will introduce legislation reflecting the compromise reached by the Governor and legislative leadership on Wednesday, September 16, before considering an override of the Governor's budget veto. If the legislation passes, Governor Hassan will ask Democrats to support overriding the veto and allowing both the compromise and the budget to go into effect.
"There is much in the budget that reflects the priorities I laid out in February, including funding for mental health, combating substance misuse, economic development, and public safety. While this compromise does not include everything that I or Democrats would like, such as additional substance misuse funding and the immediate reauthorization of Medicaid expansion, when coupled with the proposed bill, it addresses my major concern with the budget – the impact of unpaid-for tax cuts. It will allow us to move forward as a state, and I will keep working with people across New Hampshire and legislators from both parties to move forward with the reauthorization of Medicaid expansion, to build on our substance misuse efforts, and to keep our economy moving in the right direction."