How should New Hampshire allocate funds for the 2012-2013 state budget?

Democratic Gov. John Lynch proposed a $10.7 billion biennial budget. The Republican-controlled House responded with a $10.17 billion budget. The Senate added $75 million back into Lynch's budget that had been cut by the house and, on June 1, 2011, the Senate passed a $10.3 billion budget along party lines.

Both legislative houses subsequently hammered out a $10.2 billion spending plan. Later in the month, the governor criticized the reduced budget, but let it become law without his signature.

Creation of a biennial state budget for fiscal years 2012 and 2013 pits a Republican-controlled New Hampshire Legislature against a Democratic governor, John Lynch.

Lynch, re-elected to a historic fourth term in November 2010, submitted to the Legislature in February 2011 his outline for a $10.7 billion budget.

It was built on job cuts, the elimination of some programs, the closing of some state agency offices, and less aid to cities and towns.

But Republican legislators, empowered by what they believe was a voter mandate to rein-in spending, felt the need to go deeper than the governor.

House budget writers crafted a budget based on projections that state revenue would grow between 1 and 2 percent over the next fiscal year. The governor, by contrast, built his budget on revenue growth of between 3 and 4 percent.

The House budget of $10.17 billion passed in late March 2011 in HB 1 and HB 2.

The deeper cuts came primarily in social service programs for the disabled and the elderly administered by the state Department of Health and Human Services. There were also further cuts to local aid and to the state university system.

The House budget also included a controversial amendment that affected collective bargaining. It would make public workers "at-will employees" if their contracts expired without a renewal.

Both the deep social service cuts and the collective bargaining action prompted loud protests from social service advocates and union supporters.

The Senate took up the budget and began fine-tuning it through April.

The Senate Finance Committee intended to restore some of the social service cuts and not include the "at-will" amendment in its version of the budget.

Dec. 6, 2011: State agrees to pay back Medicaid money, must find $9M in budget
The Union Leader reported that New Hampshire will make quarterly payments to pay back $35 million in Medicaid payments it owes the federal government, but acknowledges no wrongdoing. As a result, the state must find $9 million in the current fiscal 2012 state budget and $18 million in the 2013 budget. The state will also have to address a $9 million obligation for the yet-to-be-written 2014 budget.
Oct. 1, 2011: State ended fiscal year with budget surplus
The Associated Press says that an unaudited report of New Hampshire's finances shows the state ended the fiscal year on June 30 with an unexpected $26 million surplus, which Gov. John Lynch suggested will lessen the need to make further budget cuts. However, subsequent to the budget becoming law, the federal government demanded the state repay $35 million in Medicaid money used in 2004 to help 26 hospitals offset costs of treating their most vulnerable patients. The state has appealed. 
June 24, 2011, Update: Budget becomes law without governor's signature

Gov. John Lynch criticized the Republican-controlled Legislature's $10.2 billion budget, but let it take effect without his signature. 

June 4: Senate Passes 2012-2013 State Budget

On June 1, 2011, the Senate passed a $10.3 billion state budget 19-5 along party lines. The Senate version of the bill adds $75 million back into the budget that had already been cut by the House. However, it is still $244 million less than the $10.7 billion Democratic Gov. John Lynch proposed in February 2011.

Democrats pushed for more money in a myriad of other programs, but faced staunch opposition from Republicans and were ultimately denied.

Senate Finance Committee Chairman Chuck Morse said the budget actions show the committee has "refocused state government on its priorities."

HB 0490, as adopted by both parties, will cut spending by 11 percent over a period of two years. The state will still provide help to those who need it most by appropriating money for the mentally ill and the disabled. The budget also includes layoffs of nearly 1,000 state positions and proposes the privatization of the Cannon Mountain ski area, as well as organizations in the Department of Corrections.

The Senate and the House are hammering out a proposal to present to Gov. Lynch in the coming days.