Gambling with the Budget
Stakes are rising as New Hampshire’s House and Senate try to balance the state budget by June 2.
The ante now includes expanded gambling, local rooms and meals taxes, and a host of other tax and fee increases and spending reductions. The House and Senate must agree on how to cover a nearly $300 million shortfall that’s projected through 2011.
The Senate recently shot down the House’s version of a budget fix, which representatives had packaged in a string of amendments to Senate Bill 450. Now the Senate is sending its own proposition back to the House in the form of a much-changed House Bill 1128.
HB 1128 includes many of the same provisions that had been in SB 450, while eliminating others and adding some new—including another try at expanded gambling.
By killing SB 450, the Senate puts even more pressure on the House to pass HB 1128, since it is the final legislative option for balancing the budget on time.
“I am incredibly disappointed that the Senate has chosen to … take a more confrontational path,” wrote House Speaker Terie Norelli (D-Portsmouth) in a statement.
If the House and Senate can’t get the budget balanced by June 2 through legislation that Gov. John Lynch will be willing to sign, he will be authorized to either issue his own spending cuts to make up the difference, or else call a special session of the Legislature that will interrupt the scheduled summer recess.
All this takes place against the backdrop of upcoming elections. Candidates have between June 2 and 11 to file declarations of intent to run for seats in the U.S. Senate and Congress and in the state races for governor, Executive Council, county offices, and the N.H. Senate and House of Representatives. Primaries will be held in September for November’s general election.
Reinforcing each chamber’s traditionally held positions, the Senate has continued to introduce options for expanded gambling while the House has continued to shoot them down.
The Senate’s most dogged gambling advocate, Sen. Lou D’Allesandro (D-Manchester), has scaled back his plans in an attempt to answer some concerns raised when the House killed his earlier gambling proposal this year. His amendment to HB 1128 would permit four facilities statewide to offer a combined total of 10,000 video slot machines: two locations with up to 3,500 machines each, one with up to 2,000, and one with up to 1,000. Applications to host up to 150 table games per facility would be processed on an individual basis.
D’Allesandro predicts the state could collect $80 million in licensing fees this year from his gambling plan, with annual revenues in the $100 million range. The state would collect 39 percent of that revenue.
D’Allesandro’s original bill proposed six gaming locations, including the construction of a destination golf resort and convention center in the southern tier and two gaming facilities in the North Country. A total of 17,000 video slots would have been permitted.
The House killed Senate Bill 489 by a vote of 212-158. Speaker Norelli has expressed confidence that the House position on gambling will not change.
Lynch says he will veto any gambling measures that reach his desk this session. He is still waiting for the report of his Gaming Study Commission, due May 25.
rooms and meals taxes
Last year’s budget saw the state’s rooms and meals tax increase from 8 to 9 percent. It also reduced the amount of that income the state would normally share with cities and towns.
This year, municipalities could have the option to make up for that lost revenue by passing their own local rooms and meals taxes. It’s an option that passed the House in SB 450 and now remains in HB 1128. The local tax would be collected by the state along with the state portion of the tax, then returned to cities and towns, minus administrative costs.
The idea has been proposed before, and Rep. Jim Splaine (D-Portsmouth), who supports the concept, points out that a similar option is available to Massachusetts towns.
The New Hampshire Lodging and Restaurant Association is calling the tax “unconscionable” and comparing it to last year’s passage of the Interest and Dividends Tax on Limited Liability Companies, which was done without a public hearing.
Last year’s budget also applied the rooms and meals tax to campsites. House Bill 1128 contains a repeal of the campsite tax, as did SB 450.
‘committees of conference’
When bills like SB 450 and HB 1128 are passed by one chamber and amended by the other, the House and Senate must choose between accepting the changes, rejecting them outright (and killing the bill in the process) or forming a committee of conference to try to find common ground.
May 19 and 20 are the deadlines for the Senate and the House, respectively, to form committees of conference for any of this year’s bills. Once formed, the committees have one week to make their reports. The two chambers then have one more week to vote on the reports—in essence, voting on the resulting bills.