Thursday, July 2, 2009


A $119 million or larger hole in the budget?
Court rulings this month might bring the Legislature back

Yesterday was the first day of a new fiscal year and there is already concern the state budget might be short $119 million.

A $11.5 billion budget was passed by the House of Representatives and Senate last week and signed into law by Gov. John Lynch Tuesday. Monday, a Superior Court judge froze $110 million budgeted as revenue pending a hearing on a claim by the New Hampshire Medical Malpractice Joint Underwriting Association. Tuesday, another Superior Court judge froze $9 million to which the New Hampshire Health Care Association is laying claim. The plaintiffs in each of the cases say the money is not the state's to spend; in one instance that there is money belonging to present and past policyholders and in the other that the $9 million belongs to New Hampshire's nursing homes.

On its face, the claim of policyholders in the malpractice fund — seems valid. The nursing home claim and that of the state sound like dueling laws.

Judge Kathleen McGuire has set July 10 as the deadline for dispositive motions in the matter of the malpractice fund and replies must be submitted by July 17. A final hearing has been set for July 21 and McGuire is expected to issue a final ruling by the end of the month.

McGuire ruled on Monday saying: "The funds at issue will not in any way be transferred prior to the final order of court."

Tuesday, Judge Diane Nicolosi ruled in favor of the nursing homes, saying they have a valid argument that they should have received the money before Lynch's order to transfer it. The nursing homes are citing one law, Lynch is relying on a different law.

The state Supreme Court should prepare for a brief summer session to hear the appeals, no matter which way they go, and lawmakers ought to be ready to return to Concord on short notice, probably in August.

John H. Sununu, the chairman of the Republican State Committee, a former governor of New Hampshire and the father of former U.S. Sen. John E. Sununu, sounds downright gleeful these days. The GOP hasn't had a hook like this to hang its hat on in more than a decade.

Sununu came close to calling Lynch a would-be thief in a statement released by the GOP state committee Tuesday.

"Unfortunately what we feared would happen has begun to happen," Sununu said. "Republicans in the House and Senate warned Governor Lynch that the $110 million he is trying to steal from the Joint Underwriting Association to balance the state budget would likely be tied up in litigation."

Clearly, Sununu's tongue is as sharp as ever. At the moment he is the only Republican capable of getting statewide attention.

Lynch is on the edge of being put in a box. If Judge Nicolosi's order on the $9 million stands up and Judge McGuire finds in favor of the medical group laying claim to the $110 million surplus in malpractice funds, and those findings are upheld, a $119 million hole in the budget will have to be repaired.

What is the likelihood of a summer session of the Legislature? It depends on how the challenges go. While Lynch and Company might be able to cut a $9 million branch from the fiscal tree, beginning the biennium with a $110 million deficit will give renewed hope to the advocates of expanded gambling in the form of video slot machines and those lawmakers who insist an income tax is the only path to fiscal stability.

So it may be that in August, less than two months into a new fiscal biennium, that the state is in a hole at least $119 million deep. What other surprises are in store for the next two years and coming months of a developing election cycle?

James E. Rivers
House Republican Office
107 North Main St.
Concord, NH 03301

This is the worst budget put together by the worst legislature in recent memory. The democrats are trying to put a positive spin on this horror show, sorry it won't work.

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