Finance Division II advances HB2 changes, cuts university funding and adds license-plate fee for lake cleanup

The Finance - Division II work session met beginning at about 1:00 p.m. and took multiple procedural and policy actions on amendments to House Bill 2, including adding a specialty license plate to fund lake cyanobacteria mitigation, rejecting a proposed administrative fee on certain dedicated funds, adopting a change to business-tax revenue splits that reduces the share flowing to the Education Trust Fund, adopting language from HB 741 on school open enrollment, and approving a reduction in state operating support for the University System of New Hampshire.

Why it matters: the group of votes alters how the state balances the biennial budget (HB2), reallocates several revenue streams, and makes a $25 million-per-year net reduction to public-university operating support—moves that supporters said were necessary to close a budget gap and critics warned would have downstream effects on workforce development and regional economies.

Lakes specialty license plate: The division agreed to include statutory language creating a new “Lakes” specialty license plate into HB2 that directs proceeds to a cyanobacteria fund. The plate, described by a member as a request from Representative Rung, would dedicate revenue to local efforts to monitor and treat cyanobacteria blooms in lakes. The motion to adopt the amendment (identified in the packet as amendment 14‑06‑H to HB2) was seconded on the floor; the clerk called for a show-of-hands vote and the committee approved the inclusion. The transcript indicates Representative Rung requested the addition and Representative Murray seconded the motion. The text in the packet ties the plate’s proceeds specifically to a “cyanobacteria fund.”

Administrative fee on dedicated funds rejected: The division considered amendment 10‑40‑H, a proposal to assess a 5 percent administrative charge on revenues deposited into certain dedicated funds during the biennium (the presenter described it as a charge on receipts going into the funds, not on existing fund balances). Committee staff estimated the measure would raise roughly $31 million over the biennium (about $15–16 million per year) for the general fund. Representative Papovich moved adoption; the motion was put to a vote and failed on a recorded count (opposed: 5; in favor: 4). In discussion, members asked which funds were carved out and were told many dedicated funds were excluded because they contain federal money or are restricted by their enabling statutes; the presenter cited RSA 6:12 as the statutory listing that enumerates dedicated funds.

Business-tax distribution change approved (amendment 13‑81‑H): The committee reconsidered previously accepted language and then adopted amendment 13‑81‑H, which changes the distribution of several business-related taxes to send 30 percent to the Education Trust Fund and 70 percent to the general fund for the affected sections (the amendment covers sections in the packet listed as 180–183). Supporters said the change returns the distribution closer to historical practice and gives the general fund revenue needed to balance the budget; opponents said it reduces dollars available for education and represented a departure from the governor’s proposal. The division adopted the amendment on a roll-call vote recorded as 5 yeas and 3 nays; Representative Murray and several other members voted no, citing concerns about education funding.

Open-enrollment language (HB 741) folded into HB2 (amendment 14‑13‑H): The committee adopted amendment 14‑13‑H, which inserts the language of House Bill 741 on public-school open enrollment and student attendance into HB2. Representative Papovich moved the amendment and Representative Dean spoke in support; the committee approved the inclusion on a roll-call vote recorded as 5 yeas and 3 nays. Members noted the bill had previously passed the House on a relatively close floor vote and had been the subject of party-line committee votes; proponents said inclusion in HB2 was appropriate because of the policy’s fiscal effect.

University System of New Hampshire funding reduced: The packet’s final item proposed changes to USNH funding on page 13 of the worksheet. The item reduces the general-fund appropriation to the University System of New Hampshire by $40 million per year while increasing use of certain non-general (unique) dollars by $15 million per year, for a net reduction of $25 million per year from the governor’s recommendation. Representative Papovich moved the change and Representative Bean was recorded during the motion process; the motion was put to a roll-call. Committee debate was extensive: several members pressed that the system provides workforce development and regional economic benefits; supporters of the reduction argued the change was necessary to balance the budget given current revenue estimates and that the committee had exhausted other options. The committee adopted the change on a roll-call vote (the transcript records individual named votes in the roll call; the clerk’s record should be consulted for the full roll-call tally and member-by-member votes).

Other items and clarifications: Committee staff (Mr. Landrigan) circulated a consolidated packet and surplus statements summarizing the division’s actions to date. The record also shows the committee approved modest fee increases on two Fish & Game dedicated accounts and credited increases in vehicle-registration revenue into the Highway Fund; the packet lists those estimated amounts. Members asked for and received a clarification that an adult-education account under consideration is for adults pursuing high-school equivalency (not exclusively English-language-learning instruction), and staff explained that related state-match and federal-grant accounts remained intact.

What’s next: Mr. Landrigan said he would compile a final package summarizing the division recommendations for members to review over the weekend before upcoming executive sessions. The division recessed to review the packet and planned to meet in full committee on Monday morning.

Quotes from the transcript: “She asked us to include it into House Bill 2,” a presenter said of the lakes plate request. Representative Papovich, speaking to the administrative-fee motion, said the proposal would “eliminate the inconsistencies we had in the past” and treat dedicated funds consistently. Representative Murray, opposing several revenue shifts, said: “I cannot support anything that takes money out of the Education Trust Fund. The education is the basis of our state.” Representative Hagen Phillips (spelling as in the record) said of the university cut: “We are cutting our workforce… We are cutting the population of young people who can stay in the state.”

(Committee packet page and amendment identifiers cited above reflect the document discussed on the record; consult the committee clerk’s official minutes and roll-call record for the definitive, member-by-member vote tallies and statutory citation format.)