After the dust settles

It has been a little time since Congress passed President Trump’s “One Big Beautiful Bill” and since the New Hampshire Legislature passed a state budget.  While these were separate dramas, they share some similarities and present warning signs.

New Hampshire first. As is common, the budget process in an odd-numbered first year of the legislative biennium revolves largely around the estimated amount of revenue available to be spent.

Observers in Concord watched as Gov. Ayotte presented her budget with a reasonably optimistic revenue estimate (even though proposing cuts in many programs), the House committee took the proposal, applied a draconian lower estimate of revenue, and cut dramatically from the Ayotte proposal, alarming educators and social service providers whose state aid was endangered.

The House then sent its budget to the state Senate, and all eyes were on its budget estimate, and the governor urged restoration of much of the spending cut by the House.

The Senate did not adopt a new revenue estimate as high as the governor’s, opting instead for one higher than the House used but lower than the governor proposed, resulting in its restoring much, but not all, of what was cut in the House.

When it produced its budget, the governor expressed her displeasure with many of the items, and seemed poised to veto the budget, even getting the Executive Council to call a special session to consider a continuing resolution, extending present spending levels, if she vetoed the budget.

Then, when everyone was expecting a veto, a compromise was announced, with all parties bending a little on the issue of expanded pensions for a group of retired first responders, which had been a major sticking point. The governor signed the budget, claiming that it was one which met the state’s needs, about a week after complaining about how problematic it was.

As stated in this column previously, much of the state budget problem was brought on itself when the Legislature repealed the Interest and Dividends Tax at the urging of former Gov. Chis Sununu.

What the process produced was a budget that keeps state Medicaid rates unchanged (after House cuts were restored) but not increased to levels services cost private providers, removed the income cap on payments for students attending private schools, costing untold amounts while cutting the University System budget by $18 million over two years and forcing a tuition increase, and made a score of policy changes tucked into the budget, some at the last minute.

There was much discomfort because of reduced funding, and on account of what was seen as ideological motivation in many provisions passed, but most citizens will see little change in their lives and things will muddle along.

On non-budget matters, scores of bills passed and were signed into law, including a ban on cellphone use in schools, a provision that lets parents complain about books in school libraries with the potential for their removal, elimination of car inspections, which could endanger those on the road, and more.

All of this was done while Congress was considering the thousand-page “big beautiful bill” with all of its complexities. President Trump opted for his entire legislative agenda to be put into one bill, and although there were many expressing opposition to it in both parties, in the end it passed the House with all Republicans but a couple voting for it and all Democrats voting against it.

Once it got to the Senate, despite much expression of opposition to particular provisions due to the huge expansion in the national debt, in the end, only three GOP senators voted against it, after a couple of billion dollars were added to obtain the vote on one senator. The original goal of cutting spending by a trillion dollars or so was eliminated, and spending was increased substantially while taxes were cut.

The tax aspects of the bill were advertised as “cutting taxes for the rich,” while in fact what was happening was an extension of the 2017 tax cuts passed in the first Trump administration. It was eliminating an increase scheduled to go into effect on Dec. 31, 2025, not a tax increase. It is ironic that much of the criticism was that the wealthy would see most of the “tax cuts” since it is the wealthy who pay taxes in the first place.

A couple of provisions were added to address taxes on tips and overtime being eliminated for people who make less than a certain amount. These increases are for a limited time, but it makes no sense to say that some dollars of income are taxable, and some are not, for people making the same amount of gross pay.

Most of the supposed “savings” in the bill allegedly comes from changes in Medicaid, but how that will work and what the actual effect will be will not be known for some time. It may have a huge effect on the NH budget just passed.

In both processes, all Democrats voted against and almost all Republicans voted for the budgets, which in itself is unsettling.

Brad Cook is a Manchester attorney. The views expressed in this column are his own. He can be reached at bradfordcook01@gmail.com.