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Governor Chris Sununu’s 2017 Budget Address

Governor Chris Sununu
2017 Budget Address
February 9, 2017

Thank you. Great to see everyone here braving the elements.

Mr. Speaker, Mr. Senate President, honorable members of the House, the Senate, the Executive Councilors who have joined us today, the commissioners who have joined us, my fellow citizens:

It is an honor to stand here to present our budget for Fiscal Years 2018 and 2019. But first let me take a moment to say to the people watching at home that given our snow storm today, please be safe, take your time, venture out only as necessary and be sure to check on neighbors and loved ones that may need some extra assistance. This storm will make for a great winter weekend in New Hampshire, which is great up in the mountains, but today we have to be smart and safe through today.

Today I am proud and honored to stand before you to bring forth a fiscally responsible budget designed to focus state government on the most critical and important public policy and program priorities. We want to ensure fairness, transparency and quality of customer service.

The priorities laid out in this budget aim to achieve three major goals:

First, to create a fiscal and regulatory environment that promises greater job growth, job retention, workforce development and economic opportunity for all.

Second, to both enhance and strengthen opportunities and services for our children and families.

And third, to improve the safety and well-being of New Hampshire’s all citizenry.

This is a true balanced budget, without an Income Tax or a Sales Tax and without increasing fees or taxes of any kind.

And we will continue our responsible reductions in business taxes already set to take place.

This true balance is achieved by ensuring that spending in Fiscal 2018 and 2019 is based entirely on revenue for Fiscal Years 2018 and 2019 and does not anticipate nor rely on revenue carried forward as surpluses from prior fiscal years.

Those are one-time revenue sources in those instances that should be strictly used for one-time expenditures and not appropriated for long term programming.

These have been – and will continue to be – some of the guiding principles in developing this budget. It may stand in stark contrast from the actions of previous administrations, but it is responsible, it is practical and it addresses our state’s true priorities.

This budget was developed by using conservative revenue projections, rather than unrealistic assumptions, speculative revenue sources, or by kicking the can down the road in order to achieve the appearance of balance.

And No, we cannot get everything we want. We cannot reshape the state of our finances overnight, but we can take sensible steps forward.

One of the underlying principles of this budget is that we can use one-time revenue to fund one-time existing pressing needs of the state. And many of those needs are happening at the local level.

Through good management practices and controlling wasteful spending as we close out the current fiscal year, we are hopeful that by the end on June we will have filled in the budget gaps we inherited and bring the balance back into the black.

Any surplus beyond increasing our Rainy Day Fund to a total of $100 million, will be placed in a newly created Infrastructure Revitalization Fund. And barring unexpected expenses, savings beyond those funds will be sent directly to our local communities.

We have the opportunity to support their critical infrastructure needs as well as dedicating resources to fight our opioid crisis. For years we have heard how the state cannot control local property taxes, but what we can do is use infrastructure grants to give our towns more financial flexibility and target key areas of need to our communities.

Specifically, we’re going to double grants to towns for roads and bridges – a chronic deferred maintenance issue in New Hampshire at the local level.

And for the first time in a long time we are going to give a boost to school building aid by granting dollars directly to communities to rebuild our classroom infrastructure. 

Specifically, schools with health and safety issues in towns that might not be able to otherwise address things like asbestos, lead paint, or other critical safety issues and these are where our school building aid will be targeted and funded.

One of the other critical areas of public health and safety that this administration is making a priority is drinking water.

There is no bigger public trust than every time we as citizens turn on that faucet. We trust that our government has done their job in ensuring clean water for us and our children.

Thanks to Senator Chuck Morse and his leadership in the Senate over the past few years, New Hampshire has protected the Drinking Water and Groundwater Trust Fund.

This fund of nearly $300 Million stands ready to be invested in vital infrastructure improvements across the state. Funds that can now be used in partnership with local communities to secure one of our most precious resources.

I want to thank Senator Morse for his leadership and I’ve asked him to lead the state’s efforts as we get this most critical project off the ground.

Heath Care continues to be another area of critical need in our state – across the entire country, frankly.

And where we have failed in the past, I am pushing for a true accounting of our Medicaid program, so we can reconcile estimated Medicaid payments to actual costs. And as we go forward, be sure that we won’t wait two years to check in on them again.

This budget requires the Commissioner of Health and Human Services to make quarterly reports, not just to me, but to Legislative leadership about where we actually stand on our true costs so we can become a more nimble government that is responsive not just reactive.

As governor, I won’t make people wait until after an election to discover we may have a shortfall. We have to be transparent. We have to be honest with the people and honest with ourselves.

I am working directly with the Commissioner and with the Department to manage the problem to find savings inside Health and Human Services.

I believe, strongly, that this budget is a bold step in the right direction – a step toward restoring the New Hampshire advantage, and reaffirming our place as the jobs engine of New England.

This budget cuts nearly $500 million from state agency budget requests and it does so without a single layoff. It simply retargets resources where they are needed the most and accounts for real liabilities we hold today by including payments to settle the Dover education funding lawsuit and other payments that will be required by the end of the year.

We don’t kick the can down the road. We don’t defer liabilities. We take care of our fiscal house today.

So as we look forward to the 2018/2019 state budget, we have worked with the House and Senate to keep our revenue estimates within reasonable expectations, while increasing spending in the General and Education Fund by just 2% in Fiscal Year 2018 and a 1% increase in 2019.

It’s almost impossible to produce a budget in just four weeks. Boy, have I learned it is quite a task. I couldn’t have done this without the dedicated men and women across our 43 state agencies – and I really do mean this.

Between my team and the folks out there who have really worked to put this together, tirelessly, day-in and day-out. I can honestly say it has been very pleasant – tough at times – but a very pleasant collaborative effort and I just want to thank all the agencies and their folks for everything that they’ve done.

With their help, we’ve been able to craft a sound budget and bring it before this Legislature ahead of schedule.

Our state’s – and our country’s – dynamics are truly changing, often rapidly. As leaders, it is our duty to not just recognize issues facing the people of our state and the businesses that power our economy, but to work together and address problems thoughtfully and in the spirit of what the people of New Hampshire expect of us:

With a focus on people – and on achieving results.

We cannot – and should not – allow progress towards a better, stronger New Hampshire to be delayed by petty partisanship and political games.

We all know that our economy is improving, but I think we can all agree that it could be doing better – and we must do more to boost the opportunities of our workforce.

I’ve traveled the state; I’ve talked to business owners. It is an indisputable fact that New Hampshire’s workforce is a critical issue.

With this in mind, I am moving our economic development division to a broader department – a new department of Business and Economic Affairs, where we can better coordinate ALL of our business-centric agencies;

We need to unleash the potential of our economy to spur job growth and provide better opportunities for both businesses and workers throughout the state.

I have tasked Taylor Caswell of the Community Development Finance Authority to help build a collaboration of partner agencies to make sure everyone is working together on our shared goals.

In addition, there will be a Small Business Advocate as part of this department, whose emphasis will be to represent the interests of New Hampshire’s small business owners before state agencies, ensuring the voice of New Hampshire’s small business community is heard, loud and clear, during the design and discussion of any new rules, regulations or policies.

We have reorganized the Department of Revenue Administration to include a Division of Taxpayer Services to improve the experience for taxpayers themselves and the efficiency of the department as a whole.

We are also reorganizing a new Department of Natural and Cultural Resources to create more comprehensive management and promotion of New Hampshire’s most treasured natural and cultural assets.

In doing this, we want to acknowledge the natural beauty of New Hampshire, while supporting what we call ‘the creative economy’ to, I believe, to date has been really left on the sidelines. But, it is vital to the New Hampshire advantage and something that must be supported.

This budget and this administration recognize local control in public education as the touchstone of policymaking, and that state government’s role in shaping education policy should be focused strictly on benefitting students and their families.

A major goal of this budget is to expand educational opportunity and choice for kids and their families.

This budget proposes a targeted full-day kindergarten program that will provide financial support to communities that choose to support and create full-day kindergarten programs.

Under the new program, the Department of Education would be directed to distribute $18 million over the biennium to communities that have approved full-day kindergarten.

State aid would be allocated among communities based on a measure of relative need, with factors including: a community’s relative property wealth to that in relative to the rest of the state; participation rates for free and reduced lunch programs compared to statewide averages; and communities with high percentages of English language learner students.

I’ve heard from many young parents that this is a priority of theirs – in both considering the quality of a community’s public education and in their decision-making process when choosing a place to raise their children.

So, I am proud today, to be the first governor to deliver a real full day kindergarten program for communities across the state.

In addition to fully funding the adequacy formula, funding for charter schools is stabilized and enhanced in this budget by linking funding to the state’s average per pupil expenditure. This will increase funding for our charter schools by $15 Million helping eliminate uncertainty and volatility for administrators, teachers and parents.

Our higher education system is a critical part of ensuring New Hampshire students have an opportunity to learn beyond their high school years and enter the New Hampshire workforce with real world skills.

Too often, I believe we think of post-secondary education in terms of institutions. That’s old school thinking. My budget approaches post-secondary education in terms of students and outcomes.

The University and Community College Systems of New Hampshire are key to these effort and we will continue to make investments in our partnership.

In doing so, my budget proposes a significant increase to the operating budget of the Community College System, which is doing a great job in providing a gateway to New Hampshire’s workforce development.

My budget proposes $10 million in capital investment into community college infrastructure.

Further, we need to incentivize out younger workforce in key areas of need to stay, work, and build their careers right here in New Hampshire. Therefore, I am allocating $5 Million of our 2017 Infrastructure Fund to enhance the state’s debt assistance program for Nurses, Care Workers and Clinicians that have committed themselves to helping fight our state’s substance abuse crisis.

Also, today I am proud to establish the Governor’s Scholarship program, with $5 million to directly assist high school students to attend colleges and universities, or workforce training programs of their choosing, right here in New Hampshire. We have to understand not every student travels the same workforce path and we need to build a system that provides the flexibility to work within their lifestyle.

This scholarship program is designed not to help 10, or 20, or even 100 students, but at least 1,000 students each year and will open workforce gateways like never before.

This is a very frugal budget – but there are some areas where we need to look at doing things differently and address some serious issues that we all know must be prioritized.

We have a crisis at our Division of Children Youth and Families, there’s no denying that. This budget addresses many of their concerns including increasing staffing levels based on the recommendations provided in the Quality Assurance Review of the Division of Children, Youth and Families. I do not see this is not a choice but a moral obligation and is the start of transformational changes needed within the department, and within our state.

We need new leadership but also a new approach to the way we protect our most vulnerable children. We will work to rethink how we partner with the community to not just shoring up the existing system but build a better model with the best practices from around the country.

And for the first time, the state of New Hampshire will provide $250,000 in funding to help curb online predators and Internet crimes against children. We cannot sit idly by while these predators take advantage of our kids.

We also have a significant wait list for the developmentally disabled. Families that require our utmost attention are often left on the sidelines. So I am calling today in my budget, increasing the funding for the developmentally disabled community by $57 million, which is the largest increase in recent history – substantial by any measure – so we can make real impacts for these families.

Partnership - Partnership is an important concept. As a state we need to move ahead in making long-term care part of our managed care. I believe we can do this smart and sensibly and that having the same people in charge of the full continuum of care is the right thing to do.

It is better for patients and better financially for people to stay in their homes as long as possible. It is one of the rare instances in which financial interests and human interests are aligned.

Home care providers, nursing homes and our partners in county government are all part of the solution and they need to be at the table, as we move forward to fully implement managed long-term care by the end of this year.

We need to appreciate the realities of our economy, something I say a lot: markets matter. We have a serious workforce issues in virtually every area of health care. This is no a secret, we know the realities, we’ve seen the numbers.

When you don’t pay anyone any more money, it shouldn’t come as a surprise to any of us who believe in capitalism that you’re going to have serious shortages, and that’s exactly what we have today.

We pay people more money to wash dishes than we pay them to watch and care for our loved ones.

In New Hampshire, we pay toll collectors more than nursing assistants.

Does anyone wonder why we have shortages among healthcare workers?

To start to address this, I’ve created a $5 million Workforce Initiative Program so that we can work with the Commissioner, the Department and the Legislature to find out where we can make the most difference.

This budget also increases funding for behavioral health workers by $3 million to strengthen New Hampshire’s community mental health safety net.

We also know retiree health costs are growing rapidly and would cost an additional $25 million if nothing were done. Now, rather than force retirees to pay all of the increase, this budget proposes that the state and the retirees share in the increase equally. It’s fair and its viable.

We are building a new women’s prison – as we speak - a desperately needed asset and we’re going to get it open. We are going to be aggressive and fully fund our corrections system to end the pattern of forced overtime and personnel shortfalls.

We all know that our energy rates are among the highest in the nation. It’s an economic development issue and an affordability issue for our citizens.

We need to work on energy rates for everyone, but the people struggling the most are on fixed incomes, often low-income rate payers, and are struggling to afford their energy bill.

I propose to dedicate 20% of the renewable energy fund to supplement our current electricity relief programs for low-income families.

Fixing energy is a long-term problem, but some people can’t wait. And we simply have to provide them resources today.

In a world of evolving threats, we must maintain heightened vigilance, ensuring continual safety and security of our people.

Recently, our state has faced a series of cyber attacks. So, for the first time, we’re funding cyber security program enhancements across state government.

Finally, we talk a lot about the opiate crisis - one that has plagued us too long and too hard. There is no easy solution, but it is the most critical public health and safety issue in New Hampshire. Our comprehensive strategy must be to continue supporting investments in law enforcement, but also in treatment, recovery and prevention.

We have studied this crisis - and now it’s time to act.

First, I propose we double the Alcohol Fund, increasing these important resources by more than $3 million and creating incentives to ensure that those funds are truly spent.

I believe that we need a renewed emphasis on recovery programs in this state. So, I have established within the Office of Substance Abuse, a specialist to work alongside with our Drug Czar, James Vara, who has done a tremendous job for us, but to help coordinate policy focused on treatment, recovery, and prevention – providing pathways for folks battling addiction back in our communities.

We have $6.2 in CARES Act funds coming into New Hampshire, that is a great opportunity for us, and we’re going to focus on treatment and recovery programs and we’re going to be aggressive about them throughout our entire state.

I believe that leadership in this area is fundamental and essential to our efforts in putting an end to this public health crisis.

In this budget, I am proposing the hiring of ten additional state troopers over the biennium – five in the first year and five in the second – to focus narrowly on drug interdiction.

Additionally, we are going to fully reinstate Granite Hammer and provide targeted student loan debt forgiveness for clinicians and nurses working on the front lines of the opioid crisis.

In just one speech it’s hard to summarize where we’re going to spend $12 billion dollars over the next two years. It’s a lot of money, it’s a huge responsibility. Not just myself as the one having the honor of making the initial proposal, but for each and every one of you. Our 24 Senators, our 400 legislators, so many folks in our communities who have an impact on how we’re going to be spending our dollars.

We have to make sure that this is simply not the end of the conversation. I want to work collaboratively with the Legislature, keep listening to our citizens, and make our state system the most responsive and customer driven effort we’ve ever had.

Together, we can achieve real results for our people and secure a brighter, stronger future for the State of New Hampshire.

Thank you so much. Keep working hard, and let’s get this thing done.

Office of Governor Christopher Sununu
State House  |  107 North Main Street  |  Concord, NH 03301
(603) 271-2121  |  fax: (603) 271-7680