What Just Happened? Feb. 13, 2025 NH House Session Recap—Special “Recalibration” Edition
A big win for labor, the governor unveils her proposed budget, and other highlights and lowlights from the Thursday, February 13 meeting of the NH House of Representatives.
“RECALIBRATIONS” ARE COMING
With millions less in federal dollars coming into New Hampshire as COVID response funds peter out, Gov. Kelly Ayotte told lawmakers “we’re facing some recalibrations”. That’s putting it mildly.
From a big picture perspective, Ayotte’s proposed two-year budget (you can read her office’s 30+ page executive summary) would reduce overall general fund spending by $150 million or 3.5%. Some of the highlights include $1 billion to maintain services for people with developmental disabilities, $33 million toward restoring retirement benefits to certain Group 2 retired state employees, $10 million more for the community mental health centers, and $98.8 in additional state aid for special education. This represents a 50 percent increase in state aid for special education and would help cover the cost of the current $16 million shortfall that school districts have highlighted in recent months. While all of these represent favorable starting points, the final appropriations will be determined over the next few months by a legislature that may be less favorably disposed to some of these expenditures.
One of the day’s loudest rounds of applause was unrelated to the budget—Ayotte’s announcement of a one-year moratorium on the construction of new landfills in the state.
As you might expect, responses to the budget plan itself were mixed. While some praised it, others noted there was little detail on exactly where proposed cuts would come. Megan Tuttle, president of NEA-NH, said that while the proposed special education funding increase is a step in the right direction, it is still a drop in the bucket compared to the cost borne by property taxpayers to fund public schools. Tuttle also criticized Ayotte’s plan to expand eligibility for school vouchers to all public school students. House Democratic Minority Leader Alexis Simpson said “there were some positive things we heard in there”. But she criticized Ayotte for not proposing more around housing policies, noting that 87% of rental properties in New Hampshire are considered unaffordable and the median home price has risen 66% in the last five years.
Perhaps the toughest assessment of Ayotte’s address came from Dana Wormald of the New Hampshire Bulletin. Framing her program as “more trickle-down economics”, Wormald writes that if Ayotte was genuinely concerned about putting more money in people’s pockets she would reverse recent business tax cuts and the interest & dividends tax repeal that have further downshifted costs to the state’s individual homeowners and renters.
SO WHAT’S NEXT?
The next phase of the budget process has already started. A day after unveiling her budget to the legislature, Ayotte appeared before the House Finance Committee and told lawmakers that the state is projected to end the current biennium with an $81 million deficit and an operational deficit of $158 million for the 2025 fiscal year. Part of her plan involves withdrawing $81 million from the state’s rainy day fund. While she said she was optimistic business tax revenues would recover, she also said there is no safety margin in the budget.
In response to questioning from Rep. Kate Murray (D-Portsmouth, New Castle), Ayotte defended her plan to make school vouchers for private and religious schools available to all public school students. The voucher program has cost the state $47.6 million to date and expanding eligibility for the program to wealthier families will result in millions more being diverted from public school funding. Another potential hole in the budget appears to be any mention of continued funding for the Youth Development Center Settlement Fund. Last year, lawmakers said they anticipate adding $75 million annually to the fund over 10 years or $750 million. But even that may not be enough as over $1 billion in claims have been filed—and these claims don’t include settlements from any lawsuits that go to trial.
Other areas of uncertainty with major potential impact on state spending:
Two court cases that seek more funding for education from the state to address inequities between communities.
Ayotte’s potentially overly-optimistic projections of business tax revenues. According to the Concord Monitor, Ayotte estimates business tax revenues will bounce back in the next two years, producing roughly $2.45 billion over the 2026-27 biennium.. But the New Hampshire Fiscal Policy Institute paints a less favorable picture. The state is currently running $39 million, or about 2.8%, short on its planned revenues.
The murky status of federal funding in general. In New Hampshire, federal money provides about one-third of operations funding for state government. Alarms are being raised in other state legislatures about the potential impact of President Trupmp’s pledge to halt grant and loan programs to states. NHPR also reported this week that suspensions of federal funding for solar businesses are already raising concerns of potentially bigger shifts to come.
SO WHAT ELSE HAPPENED?
Right to Work (for less) Dies Again. By a 200-180 vote, the House voted to indefinitely postpone HB 238 , a bill prohibiting collective bargaining agreements from requiring employees to join or contribute to a labor union. The vote not only kills the bill for this session, but also prevents it from being brought back in any form for a vote in the House in any form. The bill was strongly opposed by New Hampshire labor unions, who turned out in force outside the State House in the middle of a snowstorm to greet lawmakers on their way in to vote. Speaking in favor of the motion, Rep. Stephen Pearson (R-Manchester), a firefighter and union member, told lawmakers, “You can’t make America great without American workers.” In all, 25 Republicans joined all 175 Democrats in attendance in voting to kill the bill. More.
Impeachment Resolution Fails to Win Approval. By a 199-176 vote, the House failed to reach the 2/3 majority needs to suspend the rules to consider a Republican resolution to impeach magistrate Stephanie Johnson. To make a long story short, GOP elected officials—including the governor and the mayor of Manchester—have spent much of the last week distorting the circumstances of the release of a man in Manchester accused of a stabbing on personal recognizance bail. The idea? To use misinformation aand politically-motivated distortions to cast doubt on last year’s hard-won bail reform compromise which took effect on January 1. After spending much of the week simply reporting the distortions, WMUR finally took the time to look into the allegations and found that there was more to the story than Republican leaders would have you believe.
House Resolution Asks Congress to Give the Shipyard Back to NH. a 250-153 margin, the House voted to approve HCR 8, a resolution asking Congress to find the Piscataqua River and both sides of Portsmouth Harbor lie in New Hampshire. If Congress goes along, it would run counter to a 2002 US Supreme Court decision that established the official border in the middle of the river. Supporters claim it’s unfair for Portsmouth residents working ast the shipyard to have to pay Maine taxes. But that could be said of residents of any New Hampshire community who go to work on the other side of a state line. More.
Communities Lose, Cyanobacteria Wins. By a 196-171 vote, the House killed HB 332 , a bill that would have allowed voters in neighboring communities to establish a Villege District to protect local surface waters and remediate contamination from Cyanobacteria blooms, PFAS pollution, and stormwater runoff. The bill was prompted by the fact that multiple communities often border a large lake, making it difficult for those communities to act in concert to address environmental issues affecting the lake. More.