Members of the House Finance Committee presented their proposed $13.67 billion biennial operating budget to the full House on Monday, taking questions about reductions in state aid to cities, towns, and school districts. They are proposing spending $129 million less than the current budget, a greater reduction than the governor’s proposal which would reduce state aid by $125 million.
The biggest reductions are $62.5 million from one-time disparity aid for poor school districts, $40 million in revenue sharing funds, and between $16 million and $17 million in pollution control grants. Sununu’s proposal had provided $2.308 billion, but the House committee’s version cuts that to $2.304 billion.
The reduction in state aid did not get as many questions as the $73 million in cuts to the Department of Health and Human Services, which includes $22.6 million less for staffing which already is seeing a critical shortage. The Glencliff psychiatric facility, for instance, has increased the number of patients to three in a room while reducing the number of nursing aides on each floor from three to two, and often has fewer than that on duty as staff members resign due to the dangerous conditions that now exist there.
Auburn Republican Jess Edwards, the Division III Chair, said the department’s current budget increased 17.4 percent from the previous biennium, and that is unsustainable. He said his division has confidence that the agency’s leadership will make the right decisions and, even with the reduction in personnel, the budget will allow the agency to grow its current workforce by 13 percent.
The budget cuts allow the state to reduce tax rates on businesses, rooms and meals, and the interest and dividends tax. The budget also raises the threshold for having to pay the business enterprise tax and has a one-time reduction of $100 million in the statewide education property tax.
Biden’s Infrastructure Plan
Paying for President Biden’s $2 trillion infrastructure plan is being hotly debated. While both Republicans and Democrats broadly support the concept of repairing roads and bridges and expanding broadband access, Republicans believe the plan is too broad and that the cost is too high.
The main way Biden plans to get the funding is to increase the corporate tax rate to 28 percent. President Trump’s 2017 tax cuts lowered the rate from 35 percent to 21 percent, so Biden is seeking a middle ground.
“The whole theory of the Trump tax cuts were they were going to increase investment by corporations,” according to Steven Rosenthal, a senior fellow at the nonpartisan Urban-Brookings Tax Policy Center. “That increased investment by corporations would result in increased productivity by workers, and when workers are more productive, they in theory can negotiate higher wages. We saw none of that.”
Biden also has proposed tax increases and policy tweaks to ensure that companies do not dodge their bills domestically by shifting their profits around abroad.
Some companies, including AT&T, FedEx, Kimberly-Clark, Home Depot, Toyota, and UPS have come out against the tax plan, as has the U.S. Chamber of Commerce. “The way [Biden has] proposed to pay for it is misguided,” said Neil Bradley, the chamber’s executive vice-president. “It will actually obviate all the economic gains we could possibly gain in infrastructure.”
Garrett Watson, a senior policy analyst at the right-leaning Tax Foundation, said Biden’s plan could have the added effects of making the country “less competitive.”
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So very sorry to hear about the awful conditions at Glencliff. That needs to be addressed!