Charlie Arlinghaus

June 5, 2013

As originally published in the New Hampshire Union Leader

The political rhetoric surrounding the state budget bears no resemblance to the actual differences between the two parties and two chambers of the legislature. The rhetoric is as heated as it’s been in decades but the budget about to be adopted by the Republican Senate is remarkably similar to the one that passed the Democratic House.

Despite the similarities, we are led to believe by press releases that one side or the other is threatening the very foundations of civil society.

Both Governor Hassan and the Democratic leadership of both chambers of the legislature are in print in the last week decrying the callous cutting and harmful cuts to human service supposedly made by the Senate. An odd statement given how remarkably close the two bodies and parties are in every section of the budget and particularly in the Health and Human Services budget.

In fact, the Senate budget actually spends more than the House budget. Somehow those “reckless cuts” spent more money. General Fund spending (the state operating budget) over two years of the senate budget would increase to 9.3% greater in 2015 than in 2013. The House would increase spending by a remarkably similar but just a tiny bit smaller 9.1%.

Based on the rhetoric, one might think that despite the Senate being higher overall they must have cut Health and Human Services spending more than the House did. But in fact the reverse is true. General Fund spending for HHS in the Senate budget for two years is $23 million higher than in the House budget.

Democratic leadership has made a big deal not of the total senate spending but of the their use of what are called back of the budget cuts. At the end of spending line items, the budget includes footnotes that direct, for example, the judicial branch to make additional reductions beyond the budget in general fund spending of $5 million.

I’ve referred to these often as managerial cuts: policymakers leave the specific reductions to department heads. There’s good and bad in that approach. Ideally, elected officials will make policy decisions in consultation with department heads. On the other hand, there is some benefit to allowing a manager the ability to manage through a percent or two of efficiency.

They should be used sparingly but every budget in recent history has a few of these managerial or “back of the budget” reductions, sometimes as many as a dozen. In fact both the Senate and House use these reductions in their current budget. The House budget has six different reductions and the Senate has eight.

Apparently the difference between six back of the budget reductions and eight is the difference between honest and open government and secret hidden agendas if we are to believe press releases (not that I think any sensible human ever believes press releases).

The chief concern of the Democratic leaders is the one reduction that calls for $20 million of cuts to general fund salaries and benefits. But this is neither new nor does it change the fact that the Senate is spending more.

In 2009, then-Governor Lynch asked for (and then-Majority Leader Hassan gave him) a “back of the budget” unspecified command to find $25 million in general fund savings (a 25% higher cut than the Senate budget calls for). In fact, the two leaders of the press conference attacking the cuts as “irresponsible” happily supported the same cuts in larger numbers in 2009. And we wonder why no one trusts politicians.

Health and Human Services has not quite 30% of state employees so an equal share would be $6m of the cuts. Nonetheless, our estimate, based on past experience, assumes their greater flexibility and size means they might absorb as much as $9 million, just to estimate conservatively. Despite all that – this point is worth repeating – the Senate spends $23 million more than the House even after the back of the budget cuts.

The rhetoric on this issue bears absolutely no resemblance to the facts. Don’t get me wrong, there are real policy differences in a few areas: how the Medicaid enhancement tax is distributed and whether or not to expand Medicaid right away are the biggest. And I don’t think a 9% increase in state spending right now is a good thing. But let’s fight over the real differences and ignore the inane political theater going on.

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