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Lynch’s budget address: As Democratic Gov. John Lynch works with the new Republican Legislature to balance New Hampshire’s budget, it will be a dramatic change from the last budget cycle.

Democratic majorities in both the N.H. House and Senate have been replaced by Republican super-majorities, and the state’s budget crisis has deepened. The next two-year budget hasn’t even been crafted yet, and deficit estimates range from $400 million to the $1 billion figure claimed by Republican leaders.

Lynch told business leaders in Manchester recently that he will present a balanced budget, a “tough budget” without any new taxes or tax increases, according to the Union Leader. His budget proposal would also benefit the business community and keep education funding level.

When the current biennial budget (2010-2011) was written, Lynch and Democratic budget writers projected the state would bring in a little more than $4.5 billion in revenue. Republicans have already lowered that figure, projecting $4.4 billion in revenue over the next two years. It’s lower, in large part, because Republicans want to be asking for less.

In addition to bringing down the tobacco tax and rooms and meals tax, for example, the evolving Republican budget plan also targets recent tax and fee increases passed under Democratic control. They propose repealing the $30 car registration fee hike, eliminating the gambling winnings tax, and reducing fees for auto inspections, marriage licenses, vital records, builder applications, pet store licenses, and license renewals for restaurants and lodging facilities.

Republicans also challenge the very integrity of the process used by Democratic leaders when they crafted the current budget. “Revenue estimates contained within the governor’s previous budget were artificially inflated,” said House Majority Leader D. J. Bettencourt (R-Salem).

It’s a charge the Lynch administration has disputed. In 2009, Lynch said projected revenues would remain flat—nearly the same as the previous biennium (2008-2009).

Lynch’s budget address from 2009 also presented budget-cutting proposals that led to an estimated 300 state employees being laid off, and proposed closing one quarter of the state’s district courts. That budget also suspended revenue sharing to cities and towns and cut the state’s contribution to public employee retirement plans to provide an additional $123 million in education adequacy aid for communities—and called for a 1 percent decrease in spending from the previous budget. —Michael McCord

Senate bill puts JUA fight to bed: Enough is enough. That appears to be the message of a Senate proposal, which, if enacted, finally could settle a score between New Hampshire and a medical malpractice insurance fund. The two-year-old controversy is about whether the state can claim surplus funds held by the New Hampshire Medical Malpractice Joint Underwriting Association. The Senate Executive Departments and Administration Committee held a public hearing on Feb. 10 on Senate Bill 170, sponsored by Sen. Sharon Carson (R-Londonderry). The bill would prohibit the state from using any JUA funds and allow the organization to distribute surplus funds back to shareholders—medical providers who buy their malpractice insurance policies through the JUA.

The political controversy erupted in 2009 when Gov. John Lynch and Democratic budget writers tried to transfer $110 million from the JUA into the state’s general fund to help balance the budget for 2010 and 2011. The move became a political flashpoint as JUA shareholders were joined by Republicans in fighting the transfer, saying lawmakers had no right to it. The Lynch administration said the people of New Hampshire had established the JUA and had a right to benefit from those surplus funds.

The JUA sued and won. The N.H. Supreme Court essentially said the JUA is a private agency, even though the IRS allows it to function as a tax-exempt part of state government. A bid to change JUA rules last fall through the state insurance department, which administers and appoints board directors to the JUA, also ran into resistance by a joint legislative committee and was eventually abandoned.

The JUA was founded in 1981 by the Legislature to help medical providers find affordable medical malpractice insurance through a state-administered not-for-profit agency. Senate Bill 170 proposes that any of its excess funds be distributed to shareholders after all tax liability issues have been settled. Any excess funds that have not been distributed “shall be used to provide grants in aid to health care providers servicing medically underserved populations to assist in the NHMMJUA coverage.”

Already, eight senators and four representatives have joined Sen. Carson as cosponsors of SB 170. —Michael McCord