CONCORD, N.H. (AP) -- Expanding health coverage to an estimated 58,000 poor New Hampshire citizens is perhaps the biggest hurdle to the House and Senate reaching compromise on a state budget before the new fiscal year begins July 1.
The Republican-controlled Senate votes Thursday on a $10.7 billion spending plan that does not expand health coverage to the uninsured under the federal Affordable Care Act.
Democrats, who control the House, already are pointing to that single item — which carries little initial cost to the state — as the largest obstacle to reaching compromise.
Democratic Gov. Maggie Hassan and Democrats argue the government has kept its promises to fund Medicaid programs over the years, but Republicans say the government is struggling with trillions of dollars of debt and point to its promise to pay more for special education programs than it did as reason not to expand Medicaid.
Senate Republicans propose establishing a study commission instead.
"On all the other stuff, we're not that far apart," said Senate President Peter Bragdon, a Milford Republican.
The two chambers increase funding for services for the mentally ill and disabled. Both also agree on funding levels for higher education.
But their differences on Medicaid and taxes reflect starkly different philosophical approaches.
New Hampshire Republicans have resisted President Barack Obama's signature health care overhaul, and last session passed a law barring the state from establishing a health insurance exchange where people can shop for coverage. Hassan's office believes it needs legislative approval to expand Medicaid. House Speaker Terie Norelli, a Portsmouth Democrat, said Monday her legal counsel is researching whether Hassan can act unilaterally.
Hassan and the House included funding to implement the expansion so New Hampshire health care providers would share an estimated $2.5 billion over seven years at an estimated $85 million state cost.
Currently, New Hampshire's Medicaid program covers low-income children, parents with children, pregnant women, elders and people with disabilities. The expansion would add anyone under age 65 who earns up to 138 percent of federal poverty guidelines, which is about $15,000 for a single adult.
New Hampshire could refuse or postpone a decision, but there are benefits for states that choose to expand Medicaid now. The U.S. government will pick up the entire cost in the first three years and 90 percent over the long haul.
Senate Democratic Leader Sylvia Larsen of Concord said Democrats also don't like a GOP budget provision requiring the governor to cut $50 million in personnel and benefit costs. Hassan spokesman Marc Goldberg said between 400 and 700 people could be laid off.
The current state budget required former Gov. John Lynch to save $50 million in labor costs. He negotiated contracts with the state's three labor unions to avoid laying off 500 workers. The contracts contained no raises and increased workers' share of health care costs.
In 2009, lawmakers approved a budget that also required Lynch to cut labor costs by $25 million. Lynch proposed a furlough plan to minimize layoffs, but the union rejected it and roughly 200 people lost their jobs.
Bragdon argues whether there are layoffs will depend on Hassan's ability to manage spending.
But Larsen sees it as Republicans making a choice not to accept a House-proposed 20-cent increase in the cigarette tax to raise $40 million, or to accept delaying business tax breaks passed last session that have never been implemented. That was worth another $13 million toward program costs, she said.
"There are choices here," she said.
"We're not going to put tax increases in this budget," responded Senate Finance Chairman Chuck Morse, R-Salem.