Governor John Lynch announced today that he will allow the budget bills to become law without his signature.
"I recognize and appreciate the many hours of work that volunteer legislators put into developing this budget. In its final form, however, this is not a budget I can endorse, and I believe the people of New Hampshire deserve and expect better," Governor Lynch said. "This budget puts college out of reach for too many families, jeopardizing our state's successful economic strategy; it will drive up the cost of health care, and put health care at risk for too many of our most vulnerable families; and it undercuts some of the basic workings of state government, impacting the services expected by our citizens."
Governor Lynch had proposed a budget that cut most state agencies by 5 percent, and also included a series of reforms to improve the efficiency of state government, improve the delivery of services and lower the cost structure of state government, including: consolidating human resources and back office functions, consolidating boards, eliminating lower-priority programs, consolidating health and human service contracts and closing a number of state offices. Many of these proposals are included in the final budget.
"These are tough times and I recognize we have to make tough choices. That is what I did with the budget I presented in February," Governor Lynch said.
The legislature made additional cuts to the budget presented by Governor Lynch, totaling about $260 million in state dollars. These cuts do not reform state government by eliminating or streamlining the delivery of services. Instead the legislature made severe cuts to the university and community college systems, hospitals and health and human service programs.
"These additional cuts made by the legislature clearly do not reform state government or make it more efficient. They are simplistic cuts to our university system, our hospitals and to services many of our most vulnerable citizens rely upon," Governor Lynch said.
The legislature cut $110 million from New Hampshire's public colleges and universities - a nearly 50 percent cut to the University System and a 20 percent cut to the Community College System.
"This is the most dramatic and severe cut to higher education in the nation. There will be double-digit tuition increases at our college campuses and even fewer families will be able to afford college," Governor Lynch said. "Our state's economic success is based on our skilled and educated workforce. This undermines our state's successful economic development strategy."
The legislature cut more than $300 million in state and federal funds from New Hampshire's hospitals, which will likely drive up the cost of health care for individuals and businesses.
The legislature also cut another $20 million from health and human service programs, cuts that are likely to lead to increased costs in other areas, including for local communities. For example, the legislature cut support for housing for seniors, which will force a number of low-income elderly into more expensive nursing homes.
The legislature also cut $36 million for local road projects for communities across New Hampshire in the next two years, and asked the Department of Transportation to identify on its own an additional $18 million in reductions to transportation services, which will reduce road maintenance and lead to delays in plowing of secondary roads.
* The budget cuts by 25 percent the staff of the Department of Revenue Administration, including laying off 14 auditors, which could reduce state revenues by $15 million per year.
* The budget does not account for the $30 million in revenue loss from the 10-cent cut to the tobacco tax or the revenue losses that may come from new exemptions and changes made to other taxes.
* According to the legislature's own assumptions, the budget is unbalanced in Fiscal Year 2012.
* The budget relies on unrealistic savings assumptions in several areas, including retirement reforms.
* This budget relies on more than $50 million in non-recurring dedicated funds.
* As a result of the budget, the state is likely to face litigation on a number of issues including retirement and the hospital cuts.
* The budget relies on accounting gimmicks - such as moving nearly $40 million of drug rebate revenue from the general fund, where it had historically been booked, to "other funds."
Governor Lynch said the budget does include support for important programs. At a time when other states are slashing school aid, the legislature maintained the level funding for the education formula proposed by Governor Lynch. The budget also includes support to allow the Veterans Home to maintain its current census, avoids layoffs of state troopers and continues services to people with developmental disabilities.
"In considering whether to veto the budget bills or allow them to become law, I have two major considerations: Could a veto result in a better budget for the people of New Hampshire, and what are the potential consequences of a veto for our people. Throughout the budget process, members of the public, legislators, state agency heads and I repeatedly raised serious concerns about this budget. While some of those concerns were addressed, many were not.
"Given the legislature's rejection of proposed remedies to the problems in the budget, it is clear that a veto would not lead to a better budget," Governor Lynch said.
"Second, there could be serious repercussions to the people of our great state if there is no budget in place on July 1: vital services could be unavailable to our citizens, including everything from driver's license renewal services, permitting required for businesses and critical road repairs. Also, state parks could be closed for the Fourth of July, employees and private contractors wouldn't get paid and our state credit rating could be impacted," Governor Lynch said. "For all of these reasons, my intent is to allow HB1 and HB2 to become law without my signature."