Bleeding at NE Statehouses: The Latest on Budgets

The author, NEBHE consultant and former director of the Caucus of New England State Legislatures Carolyn Morwick, notes that this update on state budgets was accurate as of March 29, but events are changing rapidly in the six state capitals.

Connecticut Biennial Budget

Gov. Dan Malloy’s two-year $40 billion budget calls for $1.5 billion in new taxes, which includes hikes in the sales and gas taxes and in alcohol and cigarette taxes.

Part of the governor’s spending proposal includes restructuring the state’s higher education system. To reduce the deficit, the governor proposed cutting state funding for grants/scholarships for Connecticut students attending private institutions by 25% and for those attending state schools by 10%.

Gov. Malloy and House Speaker Christopher Donovan, both Democrats, aim to speed up what had become a long contentious budget process during the Rell years. Donovan expects the House to pass the budget for FY12-FY13 in early May. The Appropriations and Finance Committees are working out the details.

Maine Biennial Budget

Gov. Paul LePage vowed to veto any budget that does not include $200 million in tax breaks and welfare reform. Both Democratic and Republican legislators are working to reach a consensus on the budget, which does not necessarily guarantee the governor will get what he wants. The governor has indicated he will not cut education.

Massachusetts Annual Budget

Massachusetts is bracing for budget cuts, which are the biggest in 20 years. The FY12 budget of $30 billion is based in part on an additional $1 billion in sales tax revenues, the result of a hike in the sales tax approved in 2009. Cuts include eliminating 900 jobs, closing two prisons, cutting benefits to Mass Health (Medicaid) recipients, cutting $23 million out of emergency homeless shelter funds, and cutting state aid by $65 million. Gov. Deval Patrick’s budget contains no tax hikes. However, it is balanced by using $200 million in the state’s rainy day fund.

House and Senate budget-writers warn that Gov. Patrick’s recommended local aid cuts will in fact be much deeper. House Ways and Means Chairman, Brian Dempsey is advising House members to tell local officials that the $1.5 billion that was available for this year won’t be there for the new fiscal year. Senate Ways and Means Chairman Stephen Brewer said cities and towns are struggling to deal with rising health care costs, which are cutting into increases in local aid.  Speaker of the House Robert DeLeo stated his opposition to raising taxes. The House is expected to release its budget in mid April.

New Hampshire Biennial Budget

Gov. John Lynch proposed a budget of $10.7 billion, which is approximately 7% less than the current budget. The House Finance Committee approved a budget of $10.1 billion, which makes $519 million in additional cuts, claiming Gov. Lynch’s revenue estimates are off by $300 million.

In light of the deep cuts proposed by the Finance Committee, Gov. Lynch is asking the Senate to restore the cuts, especially in public safety, health and human services and higher education. Under the House bill, approximately 8,000 residents would be affected by the elimination of mental health services and programs. Lynch also said the committee’s proposal to cut state appropriations to the University System of New Hampshire by 50% and to the community colleges by 20% will make it very difficult for students to go on to college. The full House is expected to vote on the budget on Thursday, March 31st.

The governor stated his opposition to passage of a bill by the House to allow students to drop out of school at age 16. This bill reverses previously enacted legislation that raised the dropout age to 18, which the governor noted resulted in the dropout rate declining.  He also supports a constitutional amendment to allow New Hampshire to provide more state aid to revenue-poor communities as a means of equalizing funding for public education. The House recently voted to return to an old formula allowing communities to set spending rates.

Rhode Island Annual Budget

The House Finance Committee began public hearings on Gov. Lincoln Chafee’s $7.7 billion spending plan during the week of March 21. At issue is the governor’s proposal to lower the sales tax from 7% to 6%, while including new items that would be subject to the sales tax. Chafee also proposes cutting areas in human services such as the state’s pharmaceutical assistance program for elderly residents of Rhode Island. Other areas that would be subject to cuts include ending the state’s film tax credits.

Vermont Annual Budget

The Vermont House passed a spending plan for FY 2012 on March 25 by a margin of 95-34. The budget is 3.6 % less than the previous year’s budget.

In a historic move, the House also passed the nation’s first single-payer health care reform bill. The Senate is expected to pass the bill and send it on to Gov. Shumlin, who is expected to sign the measure. Under the bill, Green Mountain Care, a universal health insurance plan would be available to all residents of Vermont.


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