Standoff Continues Over NH State Budget

CONCORD, N.H. (AP) — Despite concessions by both Gov. Maggie Hassan and Republican legislative leadership, the two sides remain in a standoff over New Hampshire's budget nearly two months after Hassan vetoed the two-year spending plan.

Republicans are now offering to fund a pay raise for state employees that was not included in their $11.3 billion budget proposal. Their offer comes weeks after Hassan proposed a budget that included the pay raise — and business tax cuts sought by Republicans — but also raised certain taxes to help recover the lost business revenues.

Neither side is willing to accept the others' proposal. Hassan said the Republicans' new proposal fails to address her initial concerns that the business tax cuts are "unpaid for" and will create a hole in future budgets. Republicans, meanwhile, called the tax increases included in Hassan's proposal non-starters.

It's likely the state will continue to operate on fiscal year 2015 levels outlined in a short-term spending plan at least through the end of September. The Legislature returns on Sept. 16 to take up Hassan's vetoes of the budget and a number of other bills, but there is little appetite among Democrats to join Republicans in overriding the budget veto.

Final spending numbers for fiscal year 2015 are expected to come out next month. Republicans said they would like to see those numbers before finalizing another budget plan. The short-term spending plan could result in significant state savings.