Out of Recess.

Senator Cohen moved that the business of the day being complete that the Senate now adjourn until Wednesday, July 12, 1999 at 10:00 a.m.

The Senate met at 10:00 a.m.

A quorum was present.

The prayer was offered by Reverend Dr. Robert de Wetter, Senate Guest Chaplain.

God of ultimate veto power, we turn to you as we proceed in making decisions, some of which are easier than others. We ask that you guide our minds so that we will ask the tough questons, mediate our dialogue so that we may have conversations that enlighten our deliberative process, and lead our thoughts so that we will come to wise conclusions. In the midst of the freedom you have given us this day to make choices, we pray that our actions will be reflective of your will, your concern for social and economic justice, and your love for all peoples that we servce as members of this state Senate. Amen.

Senator Johnson led the Pledge of Allegiance.

To the Honorable Members of the General Court: June 21, 2000

It is with regret I have vetoed SB 153. I believe in the goals of SB 153 and support the motivation of the sponsors who seek to enhance the funding available for alcohol education and abuse prevention and treatment programs. However, I cannot responsibly sign into law the proposed funding mechanism included in the legislation.

The bill proposes to earmark a percentage of profits from state liquor sales specifically to fund alcohol education and abuse prevention and treatment programs. This bill does not create a new revenue source and dedicate that new revenue source to fund these substance abuse programs. Instead, it seeks to carve out part of an existing revenue stream and take it away from funding existing essential services. The profits we derive from the state's liquor sales all go into the state's general fund, which pays for essential services the state currently providers its citizens. In fact, we count on growth in liquor revenues to meet the increased costs we experienced yearly in existing programs and services because of inflation. As such, any future increase in liquor sales profits are not somehow "excess" profits available for new programs; they are part of the financial equation that enables us to keep up with the increasing service demand and cost pressures associated with existing programs and services.

SB 153 was pending during legislative consideration of the operating budget last year. Rather than grappling with the cost implications of the bill during that debate, SB 153 was amended to put off the effective date to FY 2002, thereby leaving the challenge of accounting for its costs to a future legislature.

Like other bills I have vetoed this session, SB 153 proposes new program expenditures outside of the biennial budget process. SB 153 will remove approximately $2 million from the general fund over the next biennium. That amount of money pays for a third of the meals we provide to seniors through our Meals on Wheels program. Two million dollars is also what it would cost to provide qualified child care providers with a 5% per year rate increase in their reimbursement rate, which would enhance their ability to attract more qualified workers and improve the quality of care received by our children. If funding for substance abuse programs is a priority for the legislature, the discussion of how best to fund them should have occurred in the context of the biennial budget process so that the need for these programs can be weighed against other priorities. All legislation that costs money must be considered in the context of the state's fiscal situation. It is irresponsible to focus only on the merits of a bill in isolation and not consider its impacts on the state's overall budget picture.

For these reasons I have regretfully vetoed SB 153.

Respectfully submitted,

Jeanne Shaheen

Governor

To the Honorable Members of the General Court: June 12, 2000

By the authority vested in me as Governor of New Hampshire, pursuant to Part II, Article 44 of the Constitution of New Hampshire, I have this day vetoed SB 468, relative to the family division of the courts and relative to the jurisdiction of the family division in Rockingham County.

It is with regret I have vetoed SB 468. As a state senator, I voted for the creation of the Family Division Pilot Program, and I believe in the concept. The goals of the Family Division are laudable. Unfortunately, however, the existing pilot program has not been cost neutral, and expanding the family division to additional counties as proposed in this bill will cost even more. According the Office of Legislative Budget Assistant audit of the Judicial Branch Family Division Pilot Program, dated January 2000, the existing pilot program in Rockingham and Grafton counties costs $1.8 million in each of FY 2000 and FY 2001. Although SB 468, which expands the Family Division in the next biennium, does not have a fiscal note, ignoring its costs does not make them go away. Like other bill I have vetoed this session, SB 468 does not include a way to pay for its costs.

The increased services provided by the Family Division have come at an increased cost, and the LBA audit notes that some argue the existing court system could have made similar improvements and offered new services given more resources. Overall, the survey results documented in the LBA audit show no significant differences in levels of satisfaction with the Family Division Pilot Program, District Court or Superior Court.

SB 468 makes no mention of what funds will be used to finance the expansion of the program. Without additional funding, other court services or programs will have to be reduced to pay for the costs of an expanded Family Division program.

Finally, while the program has generally received favorable responses from many regular users of the court system, this positive response is not universal. For example, police departments have expressed concerns about the transfer of all juvenile issues from local courts to the designated family courts. Moreover, there is some concern that the Family Division has created two systems of domestic relations practice within the state, creating conflict within the court system.

For these reasons, I have regretfully vetoed SB 468.

Respectfully submitted,

Jeanne Shaheen

Governor

The following Senators voted No: F. King, Gordon, Johnson, Fraser, Below, McCarley, Trombly, Disnard, Roberge, Eaton, Fernald, Squires, Francoeur, Larsen, Krueger, Brown, J. King, D’Allesandro, Wheeler, Klemm, Hollingworth, Cohen.

The House of Representatives has voted to override the Governor's veto on the following House Bill:

HB 235-FN-A, increasing exemptions under the interest and dividends tax.

May 19, 2000

To the Honorable Members of the General Court:

By the authority vested in me as Governor of New Hampshire, pursuant to Part II, Article 44 of the Constitution of New Hampshire, I have this day vetoed House Bill 235, An Act increasing exemptions under the interest and dividends tax.

I am vetoing this legislation because it is fiscally irresponsible and because I believe it would make the interest and dividends tax less fair.

If enacted, this legislation would reduce state general fund revenues by a significant amount, beginning July 1, 2002. This bill would cost the state general fund almost $9 million in the next biennial budget and approximately $6 million each year thereafter. This legislation provides no way to pay for that loss of revenue. In passing this bill, the legislature failed to designate the state services it would cut to compensate for this loss of revenue or, in the alternative, to pass a new revenue source to pay for its cost. Instead, H.B. 235 leaves the tough decision of figuring out how to make up for this loss of revenue to a future legislature. H.B. 235 is fiscally irresponsible.

H.B. 235 would also make the interest and dividends tax less fair. RSA 77:5 currently provides four categories of exemptions from the interest and dividends tax - a standard exemption for all persons; an additional exemption for those 65 years of age or older; an additional exemption for those who are blind; and an additional exemption for those who are disabled or unable to work. H.B. 235 increases the standard exemption and the additional exemption for those 65 years of age or older - regardless of the overall income level or need of the individual. Inexplicably, H.B. 235 leaves unchanged the exemption level for the blind and the exemption level for the disabled or those unable to work.

This legislation only benefits those with a significant amount of money invested in accounts that generate interest and/or dividends, and does so regardless of how much income those persons might have from other sources. For example, under H.B. 235 a married couple under 65 years of age with $200,000 invested in a typical interest-bearing certificate of deposit would obtain a $60 tax reduction, even if the couple also has $1 million in income from exercising stock options. In contrast, a widow over 65 years of age with $75,000 invested in a typical interest-bearing certificate of deposit, and whose only other source of income is Social Security, would obtain absolutely no benefit from H.B. 235.

H.B. 235 provides no benefit to average senior citizens and provides only a minor benefit to even the most wealthy individuals. Yet, the annual cost of this legislation, about $6 million, is more than twice the amount the State general fund now invests each year in the Meals on Wheels program for senior citizens. It is over three times the amount the State general fund now invests each year in the Veterans' Home. It is over three times the amount the State general fund now invests each year in the Emergency Shelter program.

This legislation is an example of an unfortunate trend in the legislature to pass both tax expenditures and program expenditures outside the biennial budget process. H.B. 235 was pending in the legislature last year when the House and Senate passed the biennial operating budget. This legislation was not conceived this year to deal with a newly discovered problem or emergency. Indeed, similar legislation to this has been introduced repeatedly over the last few years. If the legislature believes that increasing certain exemptions to the interest and dividends tax is a priority, H.B. 235 should have been passed last year and its cost accounted for in the biennial budget. The legislature chose not to do this. Instead, it passed H.B. 235 this year outside the budget process.

I have made it clear for months that I would veto this legislation. I have repeatedly expressed my concerns regarding legislation that would increase expenditures or reduce revenues at a time when we are struggling to find the resources necessary to fund our schools and provide other essential public services. The legislature's continuing refusal to consider the cumulative fiscal impact of individual pieces of legislation is disturbing and unacceptable.

Jeanne Shaheen, Governor

The following Senators voted No: Below, McCarley, Trombly, Disnard, Fernald, Larsen, J. King, Russman, D’Allesandro, Wheeler, Klemm, Hollingworth, Cohen.

The House of Representatives has voted to override the Governor's veto on the following House Bill:

HB 542-FN-A, repealing the legacies and succession tax.

May 31, 2000

To the Honorable Members of the General Court:

By the authority vested in me as Governor of New Hampshire, pursuant to Part II, Article 44 of the Constitution of New Hampshire, I have this day vetoed House Bill 542, an Act repealing the legacies and succession tax.

If enacted, this legislation would reduce state general fund revenues by approximately $25 million the first year it is in effect, the fiscal year beginning July 1, 2001, and then almost $38 million each year thereafter. Like HB 235, which would have increased exemptions under the State’s interest and dividends tax and which I vetoed two weeks ago, this legislation, too, fails to provide a way to pay for its cost.

The annual cost of H.B. 542, about $38 million, is more than five times the amount spent on home based care programs for the elderly that allow our seniors to remain in their own homes longer and maintain their quality of life. It is nearly four times the amount spent on childcare services which help single parents find good care for their children as they make the sometimes difficult transition from welfare to work. It also is nearly two-thirds the amount we spend on direct care services for citizens with developmental disabilities.

Under New Hampshire law the transfer of wealth at death is subject to state taxation at the rate of 18 percent, with certain exceptions: transfers to spouses, lineal descendants, municipalities, or charitable organizations; and the transfer of a homestead to a sibling who resides in the homestead. Proponents of H.B. 542 persuasively argue that this tax is unfair to those who do not have spouses or lineal descendents to whom they can leave their assets. However, all legislation that costs money must be considered in the context of the state's fiscal situation. It is irresponsible to focus only on the merits of a bill in isolation and not consider its impacts on the state's overall budget picture.

H.B. 542 was pending in the legislature last year when the House and Senate passed the biennial operating budget. The legislature could have made the choice to absorb the cost of paying for H.B. 542 at that time by either cutting state services or increasing another revenue source. The legislature chose not to do so.

The legislature considered and rejected a number of other ways to pay for the cost of this legislation. The legislature rejected the idea of reforming the estate and legacy tax by lowering the rate and applying it to all transfers of wealth. The legislature rejected the idea of paying for H.B. 542 by allowing video lottery at our four racetracks and two grand hotels. It rejected the idea of making the effective date of the repeal contingent on the enactment of a replacement revenue source. It even rejected the idea of phasing in the repeal of this tax over a number of years. All of these options for paying for the cost of this legislation were found unpalatable for one reason or another by the legislature.

Instead, this year the legislature simply amended the bill to put off its effective date until July 1, 2001. It is not an acceptable solution to put off the effective date so that another legislature will have to deal with filling the large revenue gap this bill creates.

On the very day H.B. 542 passed, members of one body conducted a briefing on the state's fiscal status. This same body then turned around and passed H.B. 542 with complete disregard for its fiscal impact.

Casting a vote to repeal a tax is an easy and a politically popular thing to do in an election year. But I believe the governor and the legislature are elected to make hard choices.

If the legislature is unwilling to practice fiscal discipline, I must and I will. While I regret having to veto H.B. 542, I cannot in good conscience approve a bill with this magnitude of fiscal impact.

Jeanne Shaheen, Governor

The House of Representatives has voted to override the Governor's veto on the following House Bill:

HB 648-FN, relative to a sludge testing program.

June 21, 2000

To the Honorable Members of the General Court:

By the authority vested in me as Governor of New Hampshire, pursuant to Part II, Article 44 of the Constitution of New Hampshire, I have this day vetoed House Bill 648, an Act relative to a sludge testing program.

If enacted, this legislation would transfer up to $85,000 from state environmental grant payments to municipalities to fund an expanded random sludge testing program at 30 municipal wastewater treatment facilities. While I do not disagree with the intent of the bill and the interest of its supporters in ensuring that all sludge intended for land application meets applicable standards, I do disagree with the manner in which these funds are being appropriated for this purpose.

HB 648 proposes to fund an expanded sludge testing program in FY 2001 through monies that would ordinarily lapse. It is important to understand that lapse funds are not "found" money and available for additional spending. Rather, an estimate of lapse funds is built into the biennial budget, and lapse funds are a critical component of achieving a balanced budget.

Like other bills I have vetoed this session, HB 648 is another example of an unfortunate trend in the legislature to pass both revenue reductions and increased program expenditures outside the biennial budget process. If the legislature believes that funding for this program is a priority, its $85,000 annual cost should have been included in the current biennial budget and its costs accounted for during the budget process.

I have repeatedly expressed my concerns about legislation that would increase expenditures or decrease revenues at a time when we are limited in the resources we have available to fund our schools and provide other essential services. HB 648 must be considered in the context of our overall budget constraints. For these reasons, I have vetoed HB 648.

Jeanne Shaheen, Governor

The House of Representatives has voted to override the Governor's veto on the following House Bill:

HB 1343-FN-A, appropriating available funds for fiscal year 2000 to provide funding to support research monitoring groundwater at reclamation sites that have had sludge applied.

May 31, 2000

To the Honorable Members of the General Court:

By the authority vested in me as Governor of New Hampshire, pursuant to Part II, Article 44 of the Constitution of New Hampshire, I have this day vetoed House Bill 1343, an Act appropriating available funds for fiscal year 2000 to provide funding to support research monitoring groundwater at reclamation sites that have had sludge applied.

If enacted, this legislation would transfer $20,000 in unused FY 2000 funds from state environmental grant payments to municipalities for this research effort. While I do not disagree with the intent of the bill and the interest of its sponsors in supporting additional research on the impacts of applying sludge at reclamation sites, I do disagree with the manner in which these funds are being appropriated for this purpose.

Like other bills I have vetoed this session, HB 1343 is another example of an unfortunate trend in the legislature to pass both revenue reductions and increased program expenditures outside the biennial budget process. These bills exacerbate the financial concerns we face. If the legislature believes that funding for this research effort is a priority, this $20,000 should have been included in the biennial budget and its costs accounted for during the budget process.

This legislation, if enacted, would be funded through monies that would ordinarily lapse. It is important to understand that lapse funds are not "found" money and available for additional spending. Instead, an estimate of lapse funds is built into the biennial budget, and lapse funds are a critical component of achieving a balanced budget.

I have repeatedly expressed my concerns about legislation that would increase expenditures or reduce revenues at a time when we are limited in the resources we have available to fund our schools and provide other essential services. HB 1343 must be considered in the context of our overall budget constraints. With regret, I must veto HB 1343.

Jeanne Shaheen, Governor

The House of Representatives has voted to sustain the Governor's veto on the following House Bill:

HB 1548-FN, abolishing the death penalty.

The House of Representatives has voted to sustain the Governor's veto on the following House Bill:

HB 1406, relative to transition service.

The House of Representatives has voted to sustain the Governor's veto on the following House Bill:

HB 1251, relative to driver education training reimbursement.

The House of Representatives has voted to sustain the Governor's veto on the following House Bill:

HB 405-FN, relative to the annual funding of placement costs for juvenile diversion and alternative disposition programs and relative to an effectiveness study of such programs.

The House of Representatives has voted to sustain the Governor's veto on the following House Bill:

HB 628, relative to the relocation of the principal residence of a child and establishing a regional youth center pilot program in Hillsborough county and in a central location within Coos, Grafton, Carroll, and Belknap counties.

Senator Cohen moved that the Senate now adjourn from the early session, that the business of the late session be in order at the present time.

Senator Cohen moved that the Senate now adjourn to the call of the Chair.