under the dome

Just as students across the state were taking final exams to round out the school year last week, House and Senate members had their own test to pass as they made final negotiations on the state's two-year, $8.6 billion budget.

It was a contest of wills over what got cut and what stayed in. House members lost the fight to restore funding for the LCHIP program, while some Senate members were shut down in their efforts to cut the money the state reimburses hospitals for Medicaid patients.

Lawmakers did keep in the budget a 28-cent increase in the state's tobacco tax, raising the tax rate from 52 to 80 cents per pack of smokes. It's estimated the tax will raise $87 million next year. An addendum to the tobacco tax would also tax "loose" tobacco for pipes and rolled cigarettes; it's estimated this additional tax will raise $2 million next year.

The House and Senate will vote on the final budget on June 29. A potential roadblock could occur when the budget makes it to Gov. John Lynch. After the compromise last week, Lynch expressed dissatisfaction with some areas of the budget, particularly the "trailer bill," HB 2, which contains instructions on how the budget will take effect. A bill that would limit senior citizens' ability to hide assets in order to qualify for more Medicaid nursing home benefits was added to the trailer bill during negotiations.

"The Legislature failed the people of New Hampshire-and failed to live up to its responsibility to open government-by using the trailer bill to make major policy changes, changes they couldn't get, or were unwilling to be on the record voting for, as stand-alone legislation," Lynch said in a statement.

While smokers will be paying more, telephone users got a reprieve from additional taxes. The Senate's budget plan had initially called for residential telephone users to pay a 7 percent tax on the first $12 of their phone bill each month; this amount was previously exempt under the state's telecommunications tax. The tax would have netted the state approximately $11 million a year; however, a last-minute catch by lawmakers showed that the Department of Health and Human Services was accidentally allocated an extra $12 million for prescription drug assistance for low-income people, so the phone tax was scrapped. During initial budget negotiations, HHS's budget faced deep cuts.

Though transponders for the E-ZPass toll system went on sale last week, lawmakers are still wrangling over the devices. A few weeks ago, the governor and the Executive Council approved a plan that would give E-ZPass users a 30 percent discount on tolls and would sell transponders for $5. Highway tokens could be used at tollbooths until July 2007. However, under the compromise budget, lawmakers jacked the price of transponders up to almost $30 as of July 16 and pegged tokens for elimination by Jan. 1, 2006.

"New Hampshire had a solid plan in place-one that ensured the long-range financial stability of our turnpike system. In addition to increasing the cost of transponders, now the Legislature insists on eliminating the 50 percent token discount our citizens enjoy-beginning in September. Since most of our citizens are token users, this move effectively doubles the rate for most people," Lynch noted in a statement released after the budget compromise.

Last week, lawmakers also approved a law that would ban "straight pipes" on motorcycles. A House and Senate committee of conference gave the OK for HB 326 to go before both chambers for a vote; if adopted, the law would fine those using the noisy mufflers $100 for the first offense and $500 for subsequent offenses.

All meetings are open to the public. For the low-down on voting results and a full calendar, visit http://gencourt.state.nh.us.