Session reaches a crescendo

This legislative session, as in every session, there have been major initiatives that have received a lot of press, some successful and some not.

The budget is always the biggest item in an odd-numbered year. This year, with Democrats in control of the House and Senate, and a Republican in the governor’s office, budget agreement is trickier than in some years.

The House passed a budget that was aggressive and contained a lot of provisions that the governor opposes, such as the capital gains tax, distribution of funds in a different manner to the one he proposed and specific policy provisions.

Once it got to the Senate, Sen. Lou D’Allesandro, the veteran Democrat from Manchester, has been working on the budget with an expressed aim to come to a compromise between the House version and the governor’s proposal. D’Allesandro has promised to delete the capital gains tax and several other objectionable provisions. Coupled with increased revenue estimates as the session progresses, which is typically true, there is an even chance that D’Allesandro will succeed, and the Senate version of the budget, if accepted by the House, may be acceptable to the governor.

One interesting twist in the budget process was a proposal by freshman Sen. Jeanne Dietsch, that an income tax be put in the budget. Her proposal was unique in that it provided for a tax in the same amount as the Social Security tax is on wages, in amounts in excess of the wage cap.

There were two problems with this approach.

First, the federal Social Security tax has nothing to do with state taxes, and it is incongruous to equate the two. Even more curious is when she indicated that people would not notice a tax on their income over the cap amount in federal law.

Second, a frequently discussed solution to the deficit in the Social Security trust fund is to eliminate the cap, and if that happened, it would be a double tax on those amounts, or the proposed tax would go away.

In other matters, Rep. Marjorie Smith’s proposal for a nonpartisan redistricting commission passed the House, was amended in the Senate to eliminate some of the complexities of selection of members of the commission, and then passed the Senate. Assuming the differences can be resolved, it will be interesting to see whether Governor Sununu signs the bill or allows it to become law.

Currently, the party in power draws the electoral districts after the decennial census required by the U.S. Constitution. Now that New Hampshire is a swing state where Democrats and Republicans alternately are in control of the legislature, the Smith redistricting law seems an ideal solution, hurting the party that might be in power, but giving it comfort that there will be an objective look when it is not in power. This could be a model for the country, and it would be good public policy if it were adopted. However, the governor has expressed satisfaction with the current system so its ultimate fate is in doubt.

Some longtime proposals reappeared this year, as they do every two years, including casino gambling. In a surprise move, the Senate passed it on very little notice and sent it to the House which, as in the past, soundly defeated it. As long as Senator D’Allesandro is in the Senate, and there are reasons to hope he is there for a long time, casino gambling will continue to reappear, notwithstanding its traditional chances. A more serious proposal, however, is online sports betting legalization, which was supported by Governor Sununu and has passed.

On another matter, legalizing recreational marijuana, once unthinkable, has been proposed after study committees and much discussion. However, in a somewhat surprising move, the bill was tabled and will not come up again in this session, making New Hampshire unique among the states which it borders. The subject is still controversial among those in the drug treatment community, many of whom believe marijuana leads to other drugs, and many noting the increased strength of the current product compared with that some of the legislators may have experienced in their youth! In any event, this subject promises to be around again since it will be off the table, studied and debated.

Brad Cook, a shareholder in the Manchester law firm of Sheehan Phinney Bass & Green, heads its government relations and estate planning groups.