under the dome

Donor towns are exempt from contributing extra to the state's education fund, but smokers and telephone users may find themselves chipping in some extra cash to the state's coffers under the $8.6 billion budget passed by the state Senate last week. The House will take a look at the budget later this week.

The Senate went with an education funding plan proposed by Manchester Republican Senator Ted Gatsas that would keep the statewide property tax (set at $2.90 per $1,000) but would use a targeted aid system for schools in less property-wealthy communities.

"With today's vote to keep the statewide property tax, it's clear that Senate Republican leadership isn't listening to the people of New Hampshire. Their insistence on keeping the tax is wrong for New Hampshire," Gov. John Lynch said in a statement. Lynch's education plan, which would have ended the system of donor towns and repealed the statewide property tax, almost made it through the Senate but was ultimately defeated. Last week, Lynch announced he had enough votes for his plan to succeed; however, a last-minute vote switch by Senators Richard Green (R-Rochester) and Joseph Kenney (R-Wakefield) killed Lynch's plan.

School funding wasn't the only contentious issue during budget talks. Though senators last week killed a bill that would increase the state's tax on cigarettes by 28 cents, the tax found its way into the budget passed by the Senate. The increase bumps up the tobacco tax rate from 52 cents to 80 cents per pack; budget writers have estimated that the tax will raise $87 million in revenue in its first year, with the money earmarked for education funding.

Fans of the state's highway toll tokens were also disappointed by the Senate. Although Gov. Lynch and the Executive Council declared that the automated E-ZPass toll system was ready to roll out later this summer, the question of tokens still remained. Lynch wanted tokens to stick around until July 2007; however, the Senate wants the tokens, which cost the state about $750,000 a year to process, off the road by September.

Senators are also looking for additional revenue to come in by telephone. As part of the Senate's budget, residential telephone users must now 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 Senate's budget was about $100 million less than Lynch's proposed budget, with the majority of cuts coming from the state's Health and Human Services department. The House will take a look at the budget this week. If House members don't like what they see, a committee of conference will be set up to work on a compromise.

Though a definite school funding plan is still up in the air, lawmakers have made solid progress on the legislative season's other big issue, health insurance reform. Legislators last week managed to undo some of the damage caused by SB 110, the law passed by former Gov. Craig Benson that many said doubled or even tripled health insurance rates for small businesses in the state. Last Wednesday, the House passed SB 125, which prohibits insurance companies from using a worker's location or health status to determine insurance rates. The law, which will go into effect on Jan. 1, will also set up a reinsurance pool to spread out the risk level of people classified as high-cost patients and will set a cap on premium increases at 20 percent of the current rate.

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