By Erika Cohen
Staff writer

Solid or porous? That is the question when it comes to the state budget.

The House passed an $8.6 billion budget that House Speaker W. Douglas Scamman, R-Stratham, calls solid. The Senate Finance Committee keeps finding holes each time it meets.

Committee members said Wednesday the budget was short $133 million in necessary expenditures, $10 million more than the figure those same members reported a day earlier.

"Every time we meet with an agency, we find a hole," Sen. Thomas R. Eaton, R-Keene, said of the marathon meetings the finance committee has held over the last few weeks.

Those supposed holes include funding for Medicaid provider payments, state employee raises and community college costs.

But Finance Committee Chairman Charles W. Morse, R-Salem, stressed the holes are not all the House missed.

"There's been a few things that popped up along the way I think were first-time finds," Morse said last week after a morning budget session with the Department of Education. "I wouldn't say they were missed."

Still, the senators say the holes exist and need filling. And Morse, Eaton and others are opposed to the 28-cent hike in the cigarette tax approved by the House and backed by Gov. John H. Lynch. That tax would help pay for the education funding plan.

As of now, the Finance Committee does not have a solution for filling the holes. Morse says he is focusing on expenditures.

One senator does have a solution: video gaming.

Last month, the Senate tabled a bill sponsored by Sen. Lou D'Allesandro, D-Manchester, to allow video gambling at racetracks and in Coos County.

Under the bill, New Hampshire would allow 5,700 gaming machines -- 1,200 at Rockingham Park

D'Allesandro, a member of the Finance Committee, estimates video gaming would bring in between $200 million and $300 million for the state's general fund.

Salem would get 2 percent of any net money taken from the Rockingham machines -- a windfall of almost $5 million a year, according to state projections. License-holders -- Rockingham Park, for instance -- would keep 42 percent of net revenues.

Morse supports video gaming, but said it is a separate issue from the budget.

"If you're going to choose a revenue source to fill a hole, gaming is better, in my opinion, than a cigarette tax," he said.

Stopping into the pressroom one afternoon, Sen. Peter H. Burling, D-Cornish, did not state his position on video gaming, but kept with the gaming theme.

Burling compared the budget process to the submarine games kids buy for video game systems.

And if the budget has as many holes as some senators say, it would be a game the people of New Hampshire would lose, said Rep. Norman L. Major, R-Plaistow, chairman of the House Ways and Means Committee.

"At this point in time, with the existing revenue streams, no, we couldn't find $100 million," Major said. "You'd need enormous upswings in liquor, lottery tickets, beer, business activity ... which would be abnormal. That isn't going to happen."

Major, who usually keeps all options on the table, said he would only be in favor of video gaming if the state owned and operated the machines to get maximum profits, something D'Allesandro's plan does not include.

Others House members say some of the holes do not exist.

Reading from the finance committee's list one by one, Rep. Kenneth L. Weyler, R-Kingston, explained why he disagrees with them.

One was a $6 million gap in school funding for the 2006-07 school year. Eaton said the House budget did not account for adjustments due to the consumer price index; Weyler said the House-passed plan has no gaps.

Despite his frustration, Weyler applauded Morse for being honest about the fact that some of the missing items are things the House didn't know about.

There is also the question of whether the holes exist or were created -- as some legislators have said during conversations in the Statehouse halls.

"That is always a possibility -- they are creating holes to introduce revenue," he said. "Obviously, that could make it easier for a plan to introduce a new revenue source."

For now, senators will keep reviewing the expenses before moving on to revenues. Major thinks the Senate Ways and Means Committee will come to similar conclusions as the House. No matter what the final budget number is, the big question will be how to pay for it.

Contact New Hampshire Statehouse reporter Erika Cohen at ecohen@eagletribune.com or at (603)-225-8022.

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