"Real liberty is neither found in despotism or the extremes of democracy, but in moderate governments.
Alexander Hamilton

Thursday, July 2, 2015

Another View on the State Budget

This was from the June 29th Union Leader 

June 29. 2015 7:33PM

Another View -- Kathy Sullivan: Republicans need only look at their budget to understand Hassan's veto

NEW HAMPSHIRE Republicans seem bewildered by Gov. Maggie Hassan’s decision to veto their budget plan. Their state party organization issued some inane news releases and tweets alleging she was motivated by a possible U.S. Senate race against incumbent Republican Kelly Ayotte.

However, Hassan has said repeatedly that she would not make a decision on a Senate run until after the budget process. If Republicans follow through on their threats not to come back to the negotiating table until the fall, however, that means her decision and fundraising for a federal campaign also are postponed for months. That only hurts a Senate run. It would not help a race for re-election, either.

One weak GOP theory involves state employees. One of the problems with the budget, cited by the governor, is that it does not pay for a negotiated state employee pay raise. Republicans say that in order to defeat Ayotte, Hassan needs the support of the state employees union.

But it is difficult to believe that the union would back Ayotte under any circumstances. She has consistently voted against minimum wage increases. She has opposed other initiatives important to organized labor, such as card check and the Paycheck Fairness Act. Losing labor support to Kelly Ayotte is not something Maggie Hassan needs to worry about.

What the Republican Party and the legislative leadership can’t understand is that in vetoing the budget, Maggie Hassan is putting her short-term self-interest aside in order to do what is right for New Hampshire’s long-term fiscal health.

Ironically, Republicans have always liked to pose as responsible, fiscal conservatives, and paint Democrats as crazed spenders with no economic sense. This irresponsible Republican budget gives the lie to that notion.

The GOP budget uses one-time revenues and gimmicks to “balance” the budget. For example, it in essence imposes a new tax on teachers. Educators in New Hampshire are required to obtain state certification; they pay a fee for that certification, which goes into a dedicated fund to pay for the program. The Republican budget is raiding the fund’s surplus to the tune of $2.5 million. It also funnels most of this fiscal year’s surplus into the operating budget, rather than pay it into the badly depleted Rainy Day Fund.

Yet even as the GOP taxes teachers and uses one-time money, the GOP also is gambling the state’s future with a risky corporate business tax cut that will drain $90 million in revenues, according to the non-partisan New Hampshire Fiscal Policy Institute. The attitude of legislative leadership toward this revenue loss is surprisingly cavalier. Republican House Speaker Shawn Jasper called the amount insignificant in comparison to the state’s overall budget. But that loss will have to be made up somehow, which means cuts elsewhere in the future — to education, social services, or infrastructure — or new taxes. Republicans say the cuts will pay for themselves with new businesses and an expansion of existing businesses. The problem with that theory is that it has been disproven across the country. In Wisconsin, for example, Gov. Scott Walker signed a package of corporate and income tax cuts in 2011. The result? Wisconsin went from surplus to a projected $2 billion budget shortfall. They badly need bridge and road repair, but Walker refuses to raise fees or taxes, insisting on adding to the state debt by borrowing $1.3 billion. Walker also proposed cutting $300 million from the University of Wisconsin system. Are businesses flocking to Wisconsin because of the tax cuts? Not quite. According to news reports, Wisconsin is 35th in job creation and is behind the other upper Midwestern states.Then there is Louisiana and its tax cutting governor, presidential candidate Bobby Jindal. After his election in 2008, Louisiana went on a tax cutting spree. The result? The state is grappling with a $1.5 billion shortfall. Things are so bad that Jindal signed one bill capping tax credits for filmmakers, and he supports repealing another business tax credit.

And let’s not forget fiscal basket case Kansas. Republican Gov. Sam Brownback’s plan to entice businesses has failed so miserably that the state has slashed education funding and increased its sales tax, now one of the country’s highest, to keep the state operating.

This is the well-trod, failed path New Hampshire Republicans would have us walk. It does not work.

Maggie Hassan was right to veto this budget. Republican leadership should look at the experience of other states and come back to the table to negotiate a budget that will not take unnecessary risks.

Kathy Sullivan is a Manchester attorney and member of the Democratic National Committee. She was chairman of the state Democratic Party from 1999-2007.


Anonymous said...

Yep, and while we are at it, let's follow Illinois where they borrowed $1B to pay the teachers pension payment of $638M. Yep, Democratic leadership at its best !!!

Joe Cormier/jcormier2@myfairpoint.net said...

The most surprising thing about this piece is it is in the Union Leader, not the Concord monitor.

Then again, folks have to be reminded how impartial politicians are.

Here's another one of her articles ... same stuff ... just change the dates. Same for the Republicans.

Is Putin a Republican or a Democratic?


Glad the streaming has been approved.

Now, if only something can be done with the annual town meeting to help "separate the chaff from the wheat" from our MoBo versions of political operatives!