The House, Wednesday, February 1, 2012

Rep. Keith MurphyThank you, Mister Speaker. Honorable colleagues, in a nutshell, this bill is intended to take any surplus from the last biennium and use it to begin to rebuild our rainy day fund. In 2007, our state had $89 million in the rainy day fund. Today we have $9 million. Now, you might ask wouldn't we expect the funds to be empty after a recession and you might be right except for the fact that the recessionary budgets that followed grew the state at 17%. In addition to emptying the fund, over the next four years the state tried mightily to spend hundreds of millions of dollars in federal stimulus funds. I was proud of the budget that we passed in this Chamber last June. It was a historic achievement with the greatest reduction in state spending since World War II. To get it done a lot of people had to see the programs they supported and believed in reduced or eliminated. A lot of sacred cows were butchered here. So, in September we learned we might have a surplus of up to $26 million. It wasn't long before we started hearing some faint "mooing" coming from where we thought we buried those cows. It is important that we do what the legislature has traditionally done and put the surplus in the rainy day fund. This is especially crucial since the health of the rainy day fund is an important factor that rating agencies use when considering our bond rating. The rating agencies specify that a rainy day fund should have in reserve 5% of the annual budget, which means we should have just over $100 million. Saving this surplus is a first step to getting there. Improving our bond rating will save our taxpayers millions of dollars in interest expense both at the state and local levels. You may hear some that want to use this surplus for more spending. They will say the money should go towards a favored program or talk about other unresolved issues that may be hanging over us. If we save the money now, it will be there if and when we need it. The latest economic forecasts are far from rosy and there is a great deal of economic uncertainty ahead. The responsible thing for us to do is save the surplus for a true rainy day. I ask you to support the bill so we can begin to rebuild our rainy day fund and protect our bond rating.

Speaker O'BrienDoes the member yield for a question? Rep. Vaillancourt, you are recognized for a question.

Rep. Steve Vaillancourt (R - Hills 15)Thank you. I believe the Governor, in his State of the State Address yesterday, said he wanted to use this to make sure we balance the budget for the current fiscal year. So, I went down to the LBAO this morning and they told me that we, for the month of January, we have a $15 million surplus and that $40 million we were short for the first six months in Medicaid was all going to be coming back eventually so we should in fact be ahead by $15 million. My question is has the Ways and Means Committee taken these current revenues into account in recommending that this go into the rainy day fund?

Rep. Keith MurphyThank you for the question, Representative. The answer is yes, we have.

Speaker O'BrienThe question before the House is the adoption of the Majority Committee report on HB 1652 of Ought to Pass. The Chair recognizes the Honorable member from Lebanon, Rep. Almy to speak to the question.

Rep. Susan Almy (D - Graf 11)Thank you, Mister Speaker. Sorry, I have a bit of a cough. It must have come from a previous speaker. If you have read the blurbs, you will know that we face an unpaid and unbudgeted obligation to the federal government for this term of about $27 million. It is there because in 2003-2004, the then Commissioner of Health and Human Services stretched the envelope on what the state could get out of the Feds and they caught us. We defended it for 8 years and then we lost the fight last year. We owe $27 million in this biennium to the Feds. This not a debt of the departments, it is a debt of the state. It should not, as the Speaker has advocated to our committee, be paid for by the present day recipients of assistance; assistance that keeps the infirm, elders and disabled alive and is helping those who have lost jobs to climb back to self sufficiency. These people are unlikely to have been on assistance at the time the offense was committed. They had nothing to do with the decision to commit it, neither did the family members, neighbors, employers, employees and townspeople who will suffer further as the people they interact with are unable to get the most basic mental health treatment and act out. Neither did the people who will die of insect born diseases, food contamination and other preventable causes that will not be prevented if DHHS is made to cut more than they have already cut. What this budget does is to take money that the governor managed to save from last terms budget and lock it away in order to force all those people to suffer further. All in the name of a bond rating which is already just below top rating, the envy of many states. The bond agencies know that states spend down rainy day funds during recessions and they take into account their tax structures and how they can collect revenues as the economy is improving. Our tax structure collects revenues very slowly as the economy is improving and we are not really there yet. The only reason we are slightly above, a surplus at this point, is that the Ways and Means Committee determined that the revenues would be quite low this term. That bond rating will not change for so little money. It takes years to change a bond rating and certainly it will not change when we are counterbalancing debts and look like we are incapable of basic governance of this state. Thank you.

Speaker O'BrienThe question before the House is the adoption of the Majority Committee Report of Ought to Pass on HB 1652. The Chair recognizes the Honorable member from Salem, Rep. Bettencourt to speak to the question. Rep. Bettencourt: Thank you very much, Mister Speaker. Members of the House, in fully appreciating this piece of legislation, I believe that a brief look at our financial history is in order. When I joined this House along with you, Mister Speaker, in 2005, we passed a budget that was both sensible and frugal. It was an aspect of Speaker Scamman's time as Speaker that I'm not sure the Republicans fully appreciated until later. When that budget was finished, we had a rainy day fund of $69 million, plus a surplus of another nearly $82 million. If we had followed the law and let those funds move into the rainy day fund, we would have had over $150 million on hand and we would have been in a great position to go to Wall Street and ask for an upgrade in our bond rating. It would have given us the opportunity to go and ask for a triple A bond rating, which would have saved the state and local taxpayers millions in lower interest costs. That increase in our bond rating, Mister Speaker, never happened. It didn't happen because the leadership that took over in 2007 felt it was more important to spend as much money immediately then to work to save taxpayers' money for years to come. This addiction to spending led to over 100 new taxes and fees, led to more borrowing and led to a 25% increase in state spending over just two budgets. It also led to a rainy day fund that is limping along at a mere $9 million. If disaster struck New Hampshire today, we would hardly be in a position to live off of our savings, as we have about three-quarters of one percent of the annual general fund spending in reserves. With this pittance in savings, we are certainly in no position to ask for an upgrade in our bond rating as we currently stand. That same relentless obsession with spending taxpayer money also led to something else. It led citizens of New Hampshire to rise up and say "enough." Enough of the tax hikes, enough of the spending, enough of the borrowing and enough of the big government that undercuts the New Hampshire Advantage. It is for that reason that many of us are here in this House today. This bill sets a clear contrast in ideas and in values. If you support expanding state government and look to take the easy way out with other people's money, then you shouldn't support this bill. If you think that the government needs to grow and pay for more services and it's more important than respecting taxpayers than paying the bills, this bill is not for you. However, if you think that sending the message to hard working citizens who pay the bills that this legislature will spend your money wisely and as wisely as we would spend our own, then I think this bill is a bill that is worth your support. If you feel that the legislature needs to keep our commitment that we made to our constituents that we would live up to our word and get spending under control and bring fiscal accountability back to state government, then I think this bill is a bill worthy of your support. There are some who think, and we heard it a little bit yesterday in the Governor's speech, who feel that these funds should be used for spending. There are others who feel that they should be used for further tax reduction. I want to be very clear. No one in this room is more passionate about reducing taxes than I am. However, this surplus is one time money and using one time money for tax reductions is just as irresponsible as using one time money to grow government and we saw this unfortunately the past all too well. We must be more responsible stewards of the taxpayer's money than that. Now, normally this bill would not have been necessary, as any surplus that is left at the end of a budget would normally go into the rainy day fund. However, due to two things, that didn't happen. First, and most importantly, while we were optimistic, we thought that there was very little chance that we would see a surplus. Our budget expected that we would inherit a deficit and not a surplus. The second reason is because of some strings attached to the federal stimulus funds, but this legislation has a way to work around that problem. There are no problems with this bill technically, it just comes down to whether or not we want to spend or save. It is that simple. Members of the House, I'm sure opponents of this bill will tell you there are other greater things we can do with this money. The Governor certainly did yesterday. I'm sure that we could find 10 different things worthy of spending this surplus on, but the truth is that we can't afford it and the addiction to spending has to stop. As we think about our own personal lives, it's hard to save money. There are always a lot of things that we'd prefer to do and spend money on. There are great restaurants to go to and if any of you have seen my waistline lately, you know I have frequented many of them, exotic vacations to take. For the men, a new big screen TV to watch the football game and for the women, designer handbags and shoes that would look great. All that is great, but it's time to set some money aside for the kids' college fund and for the 401K plan. Mister Speaker, let's not lose sight of the big picture. Let's pass this bill and let the citizens of this state know that we are more concerned with doing the right thing instead of doing the easy thing. The fun time is over, it's time for responsible governance, Mister Speaker, and that begins with passing this legislation. Thank you. The House recessed at 12:50 p.m. RECESS The House reconvened at 1:50 p.m. (Speaker O'Brien in the Chair)