Back to Budget

June 8, 2010

After budget negotiations between the House and Senate broke down last week, Gov. Lynch and the Executive Council called lawmakers back to Concord for a special session on June 9. They’ll talk about one thing and one thing only: the state budget. But with a nearly $300 million projected shortfall, that is one topic that covers a lot of bases.

House and Senate leaders Terie Norelli (D-Portsmouth) and Sylvia Larsen (D-Concord) think they have most of those bases covered. They’re scheduled to release a bill the afternoon of June 7 that will get a public hearing June 8 and go to the House and Senate for debate on June 9.

They didn’t start from scratch in writing this bill. It includes $270 million in budget cuts and adjustments that were already agreed to by a joint House-Senate conference committee in recent weeks.

That committee walked away from budget talks, however, over the remaining $30 million and the issue of expanded gambling.

Gambling

The majority of senators favor bringing video slots, and potentially casinos, into New Hampshire. Most representatives are in opposition to the idea. Gov. Lynch also is also resistant, for now.

“I’ve made clear to members of the House and Senate that I would not consider or support any bill that would issue gaming licenses before New Hampshire had developed an appropriate regulatory structure,” Lynch said in a press release. “My position is unchanged.”

Lynch’s position echoes that of the special Gaming Study Commission that he convened last year. In fact, his commission, whose report came out May 18, recommends not only changing regulations if gambling is expanded but also studying the current regulatory structure even if it’s not.

“Given the dollars and extent of gaming activity that already occurs across the state, mainly through Lottery and charitable gaming, such a review is needed to assure that the interests of the state and its citizens are being protected now,” commissioners wrote in their final report. “Structures must also be examined to determine their capacity to properly monitor and control expanded gaming.”

Will Internet gambling be legalized at the federal level? Will bordering states expand their own gambling sites? How much will new gaming facilities displace existing economic activities?

These are among the questions the commission came across in their study. They did not, however, find clear answers. They recommend, therefore, a business model analysis that accounts for both the benefits and costs of more gambling in the Granite State. One consideration to that end is New Hampshire’s “brand.”

Tourism experts confirmed to the commission that the state’s brand would be affected by gambling. But whether that impact would be good or bad, they couldn’t say—another reason for a comprehensive study, commissioners agreed.

They also want to investigate the potential burden of problem gambling, noting that communities nearest gaming sites are most likely to bear those social costs.

“Once established, legalized gaming is highly unlikely to be repealed,” according to the report. “If anything, the dependence on revenues from gaming tends to make states (less able to) prevent proliferation once casino gaming is legalized.”

Common Ground

One item budget negotiators have agreed to is repealing the so-called “LLC tax,” according to a statement released by the House information office.

Not a new tax but rather an extension of the interest and dividends tax to Limited Liability Companies, the LLC tax caused quite a stir in the business community when it was passed late in last year’s budget compromise.

Several bills this year were written specifically to repeal it, but none passed. Now most Republicans and Democrats alike favor repeal. This budget omnibus is the last chance this session to move the repeal forward in this session—a task that many legislators seeking reelection are keen to complete. 

The committee of conference also agreed to close the Anna Philbrook center for mentally ill children.

The Dept. of Health and Human Services and mental health advocates agree that the facilities there are outdated. Moving the kids to the state’s psychiatric hospital as originally proposed, however, would have displaced up to 14 adults at a time. “That is more like 400 bed nights,” according to Mike Cohen, executive director of the New Hampshire chapter of National Alliance on Mental Illness.

The committee reportedly compromised with a plan to relocate those adults to a separate hospital unit and ultimately to community-based treatment programs.

A caviat to the original proposal to close Anna Philbrook also included the option of renovating the center for use as office space for the state. It is not clear as of press time whether this option has been kept in the latest version of the budget bill.

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Filed under: Commerce, Government, Health, Money, gambling, mental health, state budget, taxes

Tags: 2010, Anna Philbrook Center, budget, gambling, Gambling Study Commission, legislation, LLC tax, New Hampshire, NH, NH Hospital, state house