A Deadline for Decision-Making

March 13, 2010

March 25 this year marks Crossover, the deadline for the N.H. House and Senate to vote on all bills that originated in those respective chambers.

Bills must pass the chamber in which they’re introduced before “crossing over” to the opposite chamber. Legislation that’s still alive after Crossover receives a second public hearing and potential floor debate before the second deadline in mid-May.

And some notable legislation is either still up for its first vote, or on its way to the other side.

Insurance

Senate Bill 408, sponsored by Sen. Kathleen Sgambati (D-Tilton), would lower health insurance costs for small businesses by allowing them to form “purchasing alliances.” Consolidated buying power and shared administrative responsibilities, say sponsors, would “increase the affordability, efficiency, and fairness of health insurance coverage for employers.”

New Hampshire HealthFirst is a different attempt to lower health insurance costs. It requires large insurance providers to offer a low-cost alternative for small businesses, and it’s getting a second look this year after low enrollment in the program, which came onto the market last fall.

Two HealthFirst bills have already passed their first floor votes: Senate Bill 455 (sponsored by Sgambati) and House Bill 1488 (Rep. Edward Butler, D-Harts Location). Nearly identical, they would introduce a second, “basic” plan that would be more affordable than the current “standard” plan turned out to be.

The Senate has yet to schedule (as of press time) a floor vote on Senate Bill 340 (Sen. Jacalyn Cilley, D-Barrington), which would eliminate credit ratings as a factor in setting insurance rates for auto and homeowner policies. A similar measure failed the the House last year, as did an attempt to eliminate education level as a rate-setting factor.

Budget

The state’s two-year budget cycle started on a rough note last June, and it hasn’t gotten any easier. So far, revenues are about $53 million below projections.

Additionally, the N.H. Supreme Court this winter denied the state’s right to claim $110 million in surplus funds from the Joint Underwriting Account. The JUA is a private medical malpractice insurance pool created with the help of the Insurance Department in 1978. It’s funded by premium payments from the doctors, hospitals and other health care providers it serves, and last year the state tried to tap into that money to balance the budget.

Policyholders sued and won. That means the money the state borrowed from the Rainy Day Fund to cover costs while the case was being heard will not be replaced anytime soon.

State revenues are down and resources limited for the same reason that demand is up for public aid and social services: recession. Many legislators are locking horns over how to respond, as evidenced by the debate over House Bill 1335, which is still up for a vote on the House floor.

Late Property Tax Payments

Cities and towns would be able to set their own interest rates for late property tax payments under HB 1335, sponsored by Rep. Steve Vaillancourt (R-Manchester). Last year the Senate voted down a similar measure, House Bill 351, but the bill’s advocates think they’ve struck a viable compromise.

House Bill 1335 “allows the people to decide if they want their governing body to change these rates,” writes Rep. Eric Stohl (R+D, Colebrook). The rates are currently set by the state and are the same in every city and town: 12 percent on late payments as of the final tax bill’s due date, 90 days after which a lien is placed on the property and the rate increases to 18 percent.

Local governments could lower those to 6 and 9 percent on late payments and lien rates, respectively, under the proposed legislation. The House Local and Regulated Revenue Committee is closely split on the matter, the minority saying that it’ “well-intentioned but ill-conceived.”

“Instead of establishing a uniform and consistent rate across the state,” writes Rep. David Kidder (R-New London), “it will Balkanize that process, resulting in an irrational patchwork of different rates among our small political subdivisions.”

The minority fears a “race to the bottom” that could ensue from year to year if one town sets its rate lower than a neighboring community. They also caution that “large commercial and retail property owners will most likely benefit the most from low delinquent interest rates,” since homeowners already have other means of redress with their towns for late payments.

This conversation comes after 352 foreclosure deeds were recorded in January. That’s a record second only to October 2009 for the number of foreclosures in one month, according to the NH Housing Finance Authority. For comparison’s sake, 20 foreclosures were recorded in Janaury 2005.

Betting and Taxes

Last year’s uproar in the business community over the “LLC Tax” seems to have gained traction in the Senate, where some Democrats are now joining a largely Republican initiative to repeal it.

The LLC tax would have owners of Limited Liability Companies pay the same Interest & Dividends Tax on their earnings that investors make on their profits. Sen. Cilley released a joint statement with Sen. Deborah Reynolds (D-Plymouth) last week advocating its repeal.

“When this change to the LLC tax law was presented to us last year in the final days of the conference committee on the budget,” she said, “we were told that the change would simply close a loophole in the tax laws which treated some business entities more favorably than others. As we now know, the change did much more than that.”

Last year’s application of the meals and rooms tax on campsites is also up for repeal with House Bill 1445, which passed the House on March 11.

Lawmakers are also split over whether to expand legalized gaming in New Hampshire as an antidote to ongoing budget shortfalls. Advocates think that the more the recession is felt, the better chance expanded gambling has.

Few are stronger advocates of gaming than Sen. Lou D’Allesandro (D-Manchester), who has sponsored Senate Bill 489 to expand or create six gaming ventures across the state. Its first floor vote is still not scheduled as of press time. A report from the Governor’s Gaming Study Commission is due in May, but the Legislature is free to vote on gambling legislation before then.

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Filed under: Commerce, Government, Health, Money, Property, gambling, insurance, small business, state budget, taxes

Tags: 2010, gambling, HealthFirst, JUA, legislation, LLC tax, meals & rooms tax, New Hampshire, NH, Rainy Day Fund, state house, tax on campsites