Feb 12, 2015 11:31 AM

Gov. Hassan proposes $11.4 billion budget with cigarette tax, Keno, motor vehicle fee hikes


CONCORD - Gov. Maggie Hassan proposed a near, $11.5 billion state budget she calls fiscally responsible but meets the many challenges facing the state over the next two years.

The spending blueprint would increase total spending about 6.5 percent compared to the $10.8 billion state budget that was originally approved two years ago. Spending cuts have brought the current bottom line down to about $10.5 billion for the cycle that ends this June 30.

In state spending, Hassan's plan would raise it about 3.4 percent.

"It is a budget that continues re-thinking and re-shaping how state government works to make us more effective and efficient and to stretch our citizens' tax dollars as far as possible,'' Hassan said in her budget address in Representatives Hall.

"It is a budget that is honest about how we will use our limited resources, beginning to move away from misleading budgeting gimmicks. And it is a budget that does not include a major new revenue source, while also recognizing that we cannot afford to further erode the revenue sources that we have."

Hassan would balance this blueprint without a sales or income tax but proposes several tax and fee hikes to accomplish it.

She would increase the tobacco tax by 21 cents per pack to discourage youth smoking and bring in more than $20 million more a year.

Two years ago, Hassan proposed a single, high-end casino to help finance her $11 billion spending plan. The House of Representatives killed it.
Hassan still supports a casino but does without it in this proposal. She did include expanded gambling by asking lawmakers to legalize betting on Keno in bars and restaurants.

Many New Hampshire residents already are playing Keno just over the border in Massachusetts, the governor said.

"Six of the 10 most lucrative Keno locations in Massachusetts are located within five miles of the New Hampshire border," Hassan said. "Allowing Keno and self-service lottery terminals would help bring that revenue back home to invest in our priorities."

Hassan came into this budget exercise with some big challenges.

The state settled lawsuits with hospitals and mental health providers. As a result, the next budget will do without about $50 million that had come in from a Medicaid Enhancement Tax that hospitals pay.

The mental health care settlement will cost the state about $30 million a year more.

Other big ticket spending items that come due in this budget are a new women's prison in Concord and fully ramping up the expansion of Medicaid that will cost the state $40 million a year by 2017.

Hassan would create a chief operating officer to manage all technology and purchasing throughout state government and proposes several mergers of existing agencies to save money.

For the state's highway fund, Hassan calls for a big increase in car and truck registration fees about 35 percent across the board. This will increase the cost to annual register a passenger car by $31 a year.

State highway officials have warned the fund faces an ongoing, $50 million deficit and without any change would lead to a layoff of up to a third of all employees in the Department of Transportation.

The state's Fish and Game Fund would receive its own financial rescue if Hassan's budget is passed as it gives the agency power to increase hunting and fishing license fees along with boat registration charges.

For higher education, Hassan would give the four-year system $13 million more, about half of what the University System Board of Trustees says it needs to avoid having to raise in-state tuition.

For community colleges, Hassan asks for $6 million more that administrators said would allow the state to reduce tuition.

Cities and towns would get a $5 million increase from the state's room and meals tax.

Hassan keeps her promise to promote commuter rail by seeking to earmark $4 million in the state's public works budget for final engineering assessment to bring trains from Boston through Nashua and on to Manchester.

"Finding a consensus to make commuter rail a reality will require buy-in from local communities, the federal government and Massachusetts, as well as robust public-private partnerships," Hassan said. "I know that we can work together to move this project forward, and the environmental and engineering assessment is an important next step."


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