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Senate axes House plan to cap taxes
Move may imperil education funding
By Matthew Spolar / Monitor staff
February 16, 2012
Relations between House and Senate leaders broke down yesterday as the Senate scrapped a House tax cap plan and replaced it with a state spending cap, a move the House Republican leader said could threaten support in his caucus for the Senate's education funding proposal.
The dispute came at the end of a long day and could imperil two priorities this year for the Legislature's Republican majority. After passing a constitutional amendment that would give lawmakers full power over state funding of education, senators engaged in a lengthy debate over a House plan to mandate a three-fifths majority in both houses in order to increase taxes or fees.
"If you feel the issue is larger government and government growing larger, then . . . the problem is actually the spending," said Senate President Peter Bragdon, a Milford Republican, as he pushed to overwrite the House language and instead require a three-fifths majority to increase the state budget over inflation. On a 17-7 vote, the Senate passed Bragdon's version of the constitutional amendment.
The change quickly drew the ire of House Majority Leader D.J. Bettencourt, a Salem Republican, who released a statement saying it jeopardizes his chamber's ability to pass a bill legalizing casinos and the constitutional education funding amendment passed by the Senate earlier in the afternoon. "Simply put," Bettencourt said, the Senate's decision to swap a tax cap for a spending cap "makes it easier for your taxes to be increased."
"CACR6, as it passed the House, was Republicans' assurance that we could not only continue to grow jobs and expand our economy by having a low tax environment here in New Hampshire, but also gave us the confidence that gaming revenues would not be used to simply grow big government," Bettencourt wrote. "We see no support in the House for the Senate changes to CACR6. The importance of CACR6 to a broad spectrum of Republicans in the House cannot be overstated, and as a result this may compromise our ability to garner the necessary support for the Senate version of (the education funding constitutional amendment)."
Bragdon and Senate Majority Leader Jeb Bradley, a Wolfeboro Republican, responded to Bettencourt in a statement last night. They noted their education funding amendment has the support of Democratic Gov. John Lynch.
"Passing a constitutional amendment regarding education funding is the most important issue facing New Hampshire," said Bragdon and Bradley.
"The Senate will not be distracted from our efforts to build a broad coalition to resolve the critical education funding issue."
The Senate's education amendment, which takes state funding out of the court system and allows lawmakers to target it to needy school districts, differs from the House proposal mainly in its assertion of the Legislature's "responsibility" in education funding, a word Lynch has said must be in any proposal in order to have his support.
"I think right now we're here to say that we've reached a significant milestone," Lynch said at a press conference after yesterday's vote.
"The milestone being that it has passed the state Senate and it is an amendment endorsed by the governor, by me. And now we're all going to work together to talk with our representatives, our colleagues in the House, as to the goals that we're trying to achieve."
Lynch did not speculate on how the education funding amendment may fare in the House, which has historically shown fragile support for the proposal. After years of failed attempts, the House passed a version of the amendment for the first time last year, but the text did not assert the Legislature's "responsibility" of which many Republicans are wary.
Outside of Lynch, Democrats have been cold to an education funding amendment over concerns that it would allow lawmakers to send less money to schools or result in unequal funding. Senate Democratic Leader Sylvia Larsen of Concord spoke out against the amendment passed yesterday, and Sen. Lou D'Allesandro of Manchester was the only Democrat to vote in favor. Bragdon did not predict the amendment's prospects in the House except to say it would also have "bipartisan" support.
Bragdon's decision to alter the House's tax cap proposal was not bipartisan, with members of the Democratic minority opposed to either proposal making it more difficult for lawmakers to increase spending or taxes. Republican Sen. Russell Prescott of Kingston, who heads the Senate Internal Affairs Committee that considered the House's language before Bragdon changed it on the floor, also spoke out forcefully against the bill.
Prescott argued that voters can make their voices heard by voting out lawmakers they believe are big spenders without creating a "silly, exaggerated threshold" that could tie the hands of future Legislatures. Prescott also felt Bragdon's change should be given more time for review.
"We're tinkering with the Constitution of the state of New Hampshire that's been working pretty good," Prescott said. "I think this is an injustice to the people of New Hampshire the way that this has gone. This is sickening."
Jeff McLynch, executive director of the New Hampshire Fiscal Policy Institute, released a statement of concern that the spending cap would lock in recession-driven spending levels. The Republican budget passed last year cut state spending by about 11 percent and made deep cuts to funding of hospitals and the state's university system.
"This would ensure the state continues to feel the effect of this recession and all future downturns long after they pass," McLynch said.
Bragdon said 23 states have spending caps, compared with four that have a tax cap. Three states have both, he said. Bragdon also responded to concerns about the three-fifths majority creating more legislative gridlock by saying that only two of the last 10 state budgets have passed without 60 percent support.
Sen. Jim Luther, a Hollis Republican, backed Bragdon's amendment, calling it a "common-sense approach to state budgeting."
"The reason that Greece is in trouble is not taxes, it's spending," Luther said.
Sen. Andy Sanborn, a freshman Republican from Henniker, was also on board.
"I was specifically sent here to cut the size of government," Sanborn said. "I was specifically sent here to rein in spending."
(Matthew Spolar can be reached at 369-3309 or email@example.com.)
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