N.H. debates use of funds in stimulus on services

CONCORD, N.H. - The rising demand for social services will consume most if not all of New Hampshire's stimulus funds dedicated to the poor - dashing some lawmakers' hopes of restoring budget cuts with the money.

Health and Human Services Commissioner Nicholas Toumpas told House budget writers yesterday the federal stimulus package will deliver about $260 million in extra Medicaid money to the state over 27 months. Governor John Lynch counted on getting $230 million under his proposed budget.

But Toumpas says preliminary calculations show his department needs at least $46 million more than Lynch budgeted. Toumpas said that number doesn't include money the counties will get for Medicaid clients.

That leaves a budget gap lawmakers would have to fill from other sources.

Toumpas declined to speculate on the size of the gap because the federal stimulus rules for some programs still have not been released, and he was unable to get federal agencies to answer his questions.

Lynch's budget initially estimated the state's Medicaid caseload would grow by 3.9 percent, but Toumpas said he has more recently projected annual growth of 8 percent.

The state still could qualify for more federal money if its unemployment rate rises above set thresholds. Toumpas said his agency is closely monitoring the jobless rate, which was 5.3 percent as of last month.

Lynch and Toumpas have repeatedly urged lawmakers not to use too much stimulus funding for operating costs because the funding will end in 2010, before the end of the state's two-year budget cycle.