2020-2021 state budget bill.
The upcoming budget cycle covers spending for fiscal years 2020 and 2021, which starts on July 1, 2019 and runs until June 30, 2021. The state budget is broken out into two parts: the operational budget and the capital budget.
The NH capital budget for 2020-2021
Gov. Christopher Sununu started the next two-year budget cycle on June 21, 2018 with the first of a series of hearings to decide priorities for spending in the capital budget. The capital budget includes long-term investments into large-scale projects, usually associated with new construction or upgrades. The new state prison for women, which opened in March 2018 at an approximate cost of $48 million, is an example of a capital budget expenditure. The capital budget for 2020-2021 is contained in HB 25.
During the hearings for the capital budget, seventeen departments made presentations. The June 21 hearing started with the University System of New Hampshire, which is looking for funds to, among other items, provide $35 million over the next six years for a new biological and life sciences building to train workers for the emerging industry of regenerative medicine in cooperation with inventor Dean Kamen’s ARMI initiative in Manchester.
The NH operational budget for 2020-2021
The operational budget includes the day-to-day spending, based on revenue from taxes and fees, for state agencies and departments.
Government agencies and departments began working on submitting their requests for funding during the summer of 2018, with a deadline of October 1 of that year. The first draft of the operational budget, known as the “governor’s budget”, was released in February of 2019.
The governor’s budget proposal
On Valentine’s day of 2019, Governor Sununu laid out his two-year budget proposal in front of the Legislature. Overall spending would rise by $1.3 billion thanks in part to larger-than-expected business tax revenue.
Areas of debate:
- Business tax cuts: The governor wants to continue with plans to steadily increase business tax cuts, while Democrats in the Statehouse want to freeze them at 2018 levels.
- Rainy Day Fund: Sununu proposed sending $27 million of the state’s surplus to the Rainy Day Fund.
- Education: The governor’s plan includes funding for certain job training programs and a student loan assistance program in the university system, but overall kept UNH at the same funding level as the last four years. As for public schools, Sununu’s proposal funds specific initiatives but does not make any major changes to the per-pupil school funding formula.
- Mental health: The governor wants to spend $40 million on a new state forensic hospital to replace the Secure Psychiatric Unit at the Concord prison. His budget also provides funding for executing the state’s Ten Year Mental Health Plan.
- Family and medical leave: The plan also includes language to implement Sununu’s version of family and medical leave. It is an opt-in plan that differs from the Democrats proposal in several key ways. See how.
HB 1 contains the operational budget numbers – how much would be spent on each line item under each government department. A second bill, HB 2, contains the legal changes needed to implement the budget. The latter has been the subject of particular debate, because it also contains funding for a number of projects important to Governor Sununu. This includes money earmarked for the Salem Boys and Girls Club, repairs to a Laconia parking garage, a solar project at Sandown Elementary School, and more.
What happens next?
Now that Governor Sununu has submitted his proposed budget, the Legislature has set about making changes. First, the House makes a first wave of revisions. After that, the Senate makes even more changes to the version passed by the House. Lastly, a conference committee of representatives and senators hashes out the final budget to send to Gov. Sununu.
New Hampshire is one of only a handful of states where the governor lacks line item veto authority. This means that Sununu will have to decide whether to accept all the changes made by the Legislature or reject them outright.
Last year's budget numbers
The current capital budget for fiscal years 2018 and 2019 is $262 million. The current operating budget approved by the state Legislature was $11.7 billion.
Information about past and current budgets can be found at the state Department of Administrative Services.
What should NH prioritize in the 2020-2021 state budget?
The House will vote on 4/11 on its $12.9 billion version of the budget. That budget draft includes the creation of a capital gains tax to increase funding to schools in poorer districts, replaces the governor's opt-in family and medical leave plan with the mandatory proposal from Democrats, and nixes funding for building a new secure psychiatric unit in favor of an alternative proposal.
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