Committee of Conference Budget Nearly Matches Senate Version on Spending, Trims Retirement and University System Appropriations

June 23, 2025 | Phil Sletten, Nicole Heller, Jessica Williams
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After a week of deliberations, the Committee of Conference for House Bills 1 and 2, the two components of the State Budget, reached a final agreement on the proposed amendments to each bill. Those amendments, building off of the Senate’s version, included significant shifts toward the House’s policy preferences, but included limited changes in funding to the $15.9 billion proposal from the Senate. In most instances of differences between the House and Senate budgets, the Senate’s proposed positions were selected. The largest funding shifts toward the House’s funding levels were at the University System, which would have a funding reduction under the Committee’s proposal, and funding for a group of public police and firefighter personnel who had their benefits adjusted with a law change in 2011.

Barring a change to the Legislature’s rules, this version of the State Budget will be given an up-or-down vote, with no opportunities for amendments, by the full membership of the House and the Senate. If both House Bills 1 and 2 pass through both chambers, they will be sent to the Governor for her consideration. If the State Budget bills are not approved at any step in that process, the State would need some form of new spending authority, such as a House Joint Resolution to extend existing appropriations, to continue most State operations beyond June 30.

Revenue Projections and Policy Changes

Going into the Committee of Conference, the difference between the House’s and Senate’s revenue projections for the General Fund and the Education Trust Fund for the rest of State Fiscal Year (SFY) 2025 through the end of SFY 2027 was $382.1 million. The gap between the two sets of revenue estimates was the primary driver of the differences between funding proposals.

The Committee of Conference produced a separate set of revenue projections to inform its work. The gap between the Committee of Conference’s revenue projections for SFYs 2025-2027 and the estimates used to build the Senate budget totaled $33.2 million to the General and Education Trust Funds, a much smaller difference than the $382.1 million between the House and Senate projections. For example, if the Committee of Conference accepted a smaller transfer to the Rainy Day Fund in SFY 2027 than the $50.0 million that the Senate planned, the Committee of Conference could have funded the Senate’s version of the State Budget unchanged.

Lottery

The Committee agreed with the versions of the budget from the Governor, House, and Senate to boost revenues relative to current policy by expanding gambling in New Hampshire.

The Committee accepted the Senate’s proposal to change the official name of the New Hampshire State Lottery Commission to the New Hampshire State Lottery and Gaming Commission. The Committee adjusted anticipated Video Lottery Terminal (VLT) revenues for the General and Education Trust Funds to $185.3 million across the biennium, an increase of more than $102.8 million over the biennium from the Senate’s projected revenues to those two funds.

The Committee changed the tax rate on VLT revenue to 31 percent, which was between the rates proposed by the House and the Senate. The Committee proposed allocating the revised VLT revenues from those 31 percentage points of tax rate as follows:

  • 25 percent to the Governor’s Commission on Addiction, Treatment, and Prevention
  • Approximately 10.76 percent to charitable gaming, the equivalent of 35 percent of the VLT revenue taxed at the 31 percent rate
  • About 5.0 percent to the Lottery Commission for operations, with the remaining profit funds flowing to the Education Trust Fund
  • Approximately 15.0 percent to the General Fund

The Committee also reduced projected revenues for historic horse racing machines compared to the Senate Budget. This estimate revision would result in a reduction of approximately $109.0 million in additional dollars for the Education Trust Fund over the biennium.

The Committee’s budget would retain the House’s proposed high-stakes tournaments with buy-ins of $2,500 or more, remove a maximum wager cap currently set at $50, and expand hours for Keno to match the hours of a business’s operations, rather than the current restriction of 11 a.m. to 1 a.m. in statute. The Committee did not include the Senate’s proposed requirement that municipalities vote to prohibit Keno gaming, rather than voting to adopt it as required by current law.

The Committee removed the Elderly, Disabled, Blind, and Deaf Exemption Reimbursement Fund proposed by the Senate, which would have reimbursed municipalities for tax exemptions beginning in SFY 2028 and would have been funded by VLT revenues. Additionally, the Committee accepted the Senate’s proposed elimination of the Council for Responsible Gaming and the transfer of its work to the Department of Health and Human Services’ Division of Behavioral Health.

Other Revenue Policy Changes

The Committee of Conference accepted the Senate’s proposal to institute a tax amnesty program to collect revenue from individuals and businesses with outstanding and unpaid taxes from prior years. The Committee projected that this program would generate approximately $4.0 million in net revenue.

The Committee also agreed with the Senate’s recommendation to add more multi-state tax auditors to the Department of Revenue Administration’s staff, anticipating approximately $5.0 million in net revenue from those additions.

Several fees proposed by the Senate but not included in the House proposal, including those for the Board of Tax and Land Appeals and the 988 suicide hotline, were rejected by the Committee of Conference due to House chamber rules regarding the acceptance of tax and fee increases in the Committee of Conference.

The Committee of Conference did not incorporate the House’s proposal to significantly narrow uses of the Education Trust Fund and shift more tax revenue away from the Fund. However, the Committee of Conference included a compromise policy to limit the balance the Education Trust Fund could carry forward across biennia to $20.0 million, with any additional total going to the General Fund. The Committee of Conference projected that $28.7 million would be drawn from the Education Trust Fund at the end of SFY 2027 under this policy and transferred to the General Fund, which would subsequently transfer $49.6 million to the Rainy Day Fund.

The Committee of Conference proposed that 39 percent of revenue from the two primary business taxes, the Tobacco Tax, and the Real Estate Transfer Tax flow to the Education Trust Fund. The House proposal would have devoted 30 percent of those revenue sources to the Education Trust Fund, and the Senate would have set that percentage to 35.5 percent. The Committee of Conference approved sending more revenues to the Education Trust Fund proportionally, but the cap on the ending balance effectively moves those additional dollars back to the General Fund.

Health and Social Services

The Health and Social Services category in the State Budget is the largest expenditure category and is comprised almost entirely of the Department of Health and Human Services (DHHS). Under the Committee’s proposal, funding was restored for key services that would have been reduced under the House’s proposal, including funding for Medicaidprovider reimbursements, community mental health supports, and developmental disability services.

Medicaid

Within the DHHS’s section of the State Budget, the largest monetary change adopted by the Committee included the rejection of the House’s proposed three percent Medicaid reimbursement rate reduction, setting Medicaid rates to the levels originally proposed by the Governor and later by the Senate. This repeal keeps $52.5 million in General Funds in the budget for the biennium with at least equal amounts of federal match funding.

The Committee agreed to the Senate’s proposed Medicaid premiums for the Granite Advantage Health Care Programand Children’s Health Insurance Program (CHIP). A proposal to set the premiums at up to five percent of enrollee income was first established in the Governor’s proposal and carried forward in the House’s version. The Senate proposed changing both Granite Advantage and CHIP premiums to be determined based on fixed dollar amounts depending on household size, rather than a percentage of income as introduced in past proposals. The Committee estimates that $5 million will be collected through Granite Advantage premiums during SFY 2027, $7 million less than the $12 million estimated by the Governor and House.

The Committee agreed to increased pharmacy cost shares for Medicaid enrollees, as first proposed by the Governor and carried forward by the House and Senate. This language would increase cost shares from their current $1-2 to $4, bringing in $1.5 million in estimated General Fund revenue for the upcoming biennium.

The Committee reinstated the use of Liquor Funds to support the Granite Advantage Health Care Trust in the event of any funding shortfalls, while removing the allowance of General Fund support for the Trust added in the House’s proposal.

The Committee agreed to retain and incorporate two previously proposed Senate bills regarding the State’s Medicaid program that were attached to the Senate’s State Budget proposal. The first, Senate Bill 134, requires the DHHS to resubmit a federal Medicaid waiver to institute work requirements already outlined in State statute. This amendment would require adults in the Granite Advantage program to work or participate in an eligible community engagement activity for at least 100 hours per month, higher than the 80 hours proposed under work requirements included in the U.S. House of Representatives’ budget reconciliation bill. The Committee also agreed to include Senate Bill 135, which requires the DHHS to annually set cost-reflective rate parity for Medicaid managed care services and allocate $2.3 million during SFY 2027 to establish those payment rates.

However, the Committee removed language mirroring Senate Bill 137, which was added as part of the Senate’s State Budget proposal. This bill would have required the DHHS to establish an administrative day rate to cover hospital stays for Medicaid patients who no longer need acute care but cannot be discharged due to a lack of available placement, including Medicaid-funded hospital stays for postpartum mothers staying with substance-exposed newborns.

While there were no identified changes in funding for services, the Committee approved the movement of funds between budget lines to reflect the approved agreement between hospitals and the State around the Medicaid Enhancement Tax (MET) and the portion of funds that hospitals receive back in the form of Disproportionate Share Hospital (DSH) Payments to support uncompensated care. As identified by the Legislative Budget Assistant (LBA) in Committee meetings, this agreement reflects language in Senate Bill 249, with hospitals expected to receive back 91 percent, in aggregate, of what they pay towards the MET.

The Committee also agreed to the Senate’s proposal to move the implementation of the House’s proposed Medicaid incentive program from 30 days to 120 days after State Budget passage. This program would require managed care organizations to encourage Medicaid recipients to seek the lowest cost outpatient procedure care when clinically appropriate. The proposed statute would also require the DHHS to submit an implementation plan for the program.

The Committee removed the allowance of Medicaid funds to cover biomarker testing, which was included in the Senate’s State Budget proposal. In addition, the Committee left out language prohibiting the use of Medicaid funds for circumcisions, which was proposed by the House but removed in the Senate’s version of the State Budget.

Finally, the Committee agreed to the Senate’s proposal of $3.8 million in General Funds for the DHHS Division of Economic Stability to fund a tier-one call center to process Medicaid eligibility determinations.

Services for People with Disabilities and Older Adults

On the final day of negotiations, the Committee rejected the House’s decrease in funding for developmental disability Medicaid waiver services, allocating what was originally proposed by the Governor and adopted by the Senate. This change adds $62.8 million across the biennium, relative to the House’s proposal, in combined federal and General Funds to help ensure there is no waitlist for services due to short-term State funding constraints.

The Committee approved the Senate’s proposal to carry forward $10.0 million in unspent funds during the current SFY 2025 to support funding for community-based residential services for those with disabilities. This added allocation was included in the DHHS’s agency budget request, but left out of the Governor’s proposal, following the establishment of a Room and Board payment calculation in SFY 2024 to help ensure full funding for residential services.

The Committee approved the Senate’s allocation of $3.0 million to support faster turnarounds for Medicaid long-term care eligibility determinations, while also agreeing to increase annual nursing home licensing fees to help support this added allocation.

The Committee agreed to the Senate’s position to restore funding for services and add several new initiatives to support Granite Staters with disabilities and older adults. These included:

  • $700,000 to fund congregate housing;
  • $550,000 to establish 50 guardianship slots for individuals released from hospital settings who are legally incapacitated and require help making decisions around hospital discharge;
  • $211,718 to institute two percent rate increases during each year of the upcoming biennium to support intermediate care for children with disabilities; and
  • $200,000 to increase funding for the Alzheimer’s Disease and Related Dementias (ADRD) caregiver grant program.

Finally, the Committee retained the Senate’s proposal to establish a committee to study the potential integration of Medicaid-funded long-term care into the managed care system, with a report required to be submitted by that committee by October 1, 2025.

Mental Health and Substance Use Disorder Funding

The Committee agreed to fund the community mental health system at the Governor’s and Senate’s proposed amounts, following the House’s proposed General Fund reduction of $37.8 million across the biennium. This change helps support non-Medicaid contracts within community mental health services, as well as adds back $10.0 million to support uncompensated care as originally proposed by the Governor.

The Committee approved the Senate’s proposed name change of the Alcohol Abuse Prevention and Treatment Fund to the Addiction, Treatment, and Prevention Fund. This Fund supplies allocations for the Governor’s Commission on Alcohol and Drugs, which would be renamed to the Commission on Addiction, Treatment, and Prevention and expanded to include problem gambling prevention, under the Committee’s proposal. As indicated earlier, the Committee requires that 0.25 percent of gross video lottery terminal revenue collected from newly established video lottery terminals will be allocated to the Commission. Following a proposed repeal under the House’s proposal, the Committee also agreed to reinstate the annual five percent transfer from the Liquor Fund to the Addiction, Treatment, and Prevention Fund; however, the transfer will not occur if another appropriation is made to the Fund by the Legislature before the start of the upcoming biennium.

The Committee adopted the Senate’s House Bill 2 language requiring the DHHS to develop a transition plan ahead of the sale of the Philbrook Center, which is currently being used as transitional housing for approximately sixteen individuals who were previously receiving services at New Hampshire Hospital. The House originally called for the sale of the facility in its State Budget proposal, with the sale required to be completed by the end of the upcoming biennium to generate an estimated $5.0 million in General Fund savings.

The Committee agreed to the Senate’s restored funding for the Friends of Aine peer grief-support program, following the House’s repeal of the program in its entirety. This change would add $400,000 in General Funds for the upcoming biennium.

Finally, while no new allocations were made, the Committee adopted the Senate’s proposed lapse extension of funds for the Recovery Friendly Workplace Initiative.

Mental and Behavioral Health Initiatives

Language from Senate Bill 246, or “Momnibus 2.0,” was retained in the Committee’s proposed State Budget to help address needs resulting from the closure of labor and delivery units across the state and create perinatal mental health supports for Granite State women. This collection of maternal health policies includes allocations of $150,000 for rural maternal health EMS training and $30,000 to support a study on reducing barriers and examining sustainability for independent birth centers during the biennium. Additionally, insurance companies would be able to opt to waive copays for mental health and substance use treatment for perinatal patients. The perinatal care and supports portion of this package also requires:

  • Depression screens during well-child visits for pregnant or postpartum patients to be covered by private insurance and Medicaid
  • Home visiting services during pregnancy and up to 12 months postpartum to be covered by commercial insurance plans
  • The creation of a perinatal psychiatric provider consult line in statute starting SFY 2028, with a $275,000 appropriation that year
  • DHHS to examine the development of a perinatal peer support certification program
  • Employee protection for unpaid time off to attend up to 25 hours of postpartum care and pediatric appointments during the infant’s first year of life for employers with 20 or more employees

The Committee accepted the Senate’s recommendation to develop an Adverse Childhood Experiences (ACEs) Prevention and Treatment Program. ACEs can include physical, emotional, or sexual abuse, neglect, witnessing violence, experiencing homelessness, food insecurity, and household instability. Over the biennium, the Committee accepted the Senate’s recommended $300,000 allocation to support children through age six who have experienced ACEs or other “severe emotional disturbances” through:

  • Increases in Medicaid reimbursement for early childhood mental health care
  • Increased salary levels or reimbursement rates for individuals with an early childhood and family mental health credential
  • Funding for training and professional development in early childhood mental health care
  • Creation of a five-year plan by DHHS to increase state workforce capacity for child-parent psychotherapy supports

The Committee removed two Senate Bills pertaining to mental health which were added as part of the Senate’s State Budget proposal. The first, Senate Bill 255, would establish a 988 Trust Fund to collect telecommunication surcharges to support staffing and training at hotline call centers, infrastructure adjustments for the call center system, and other 988 supports. As identified through Committee meetings, the 988 hotline is currently funded with temporary pandemic-related federal dollars, with no permanent future funding source identified. The Committee also removed the Senate’s addition of Senate Bill 128, which would have established a Children’s Behavioral Health Association to coordinate mental health services for children under age 19 who are not covered through Medicaid. This Association would have been funded through annual assessments collected from private insurers, generating an estimated $5 million in assessment revenue during the upcoming biennium.

Public Health Services

The Committee agreed to restore partial funding for the Family Planning Program, which provides low- to no-cost preventive and reproductive health care at health centers across the state. The House’s proposed to defund the program in its entirety. The Committee allocated $850,000 in General Funds across the biennium to the program generally and added language to its House Bill 2 proposal setting aside an additional $75,000 each year for Coos County Family Health Services. The Committee’s total General Fund allocation was less than the $1.7 million proposed by the Governor, although all related federal funding ($2.0 million) for the program would be restored under these changes.

The Committee agreed to the Senate’s two changes for the State Loan Repayment Program (SLRP), which helps to recruit and retain health professionals to commit to working in rural or medically underserved areas in New Hampshire. Following the House’s proposed pause of new applicants during the upcoming biennium, the Committee allows new participants to enter into the program as long as General Funds are not used to support those new applicants. The Committee also added a component of Senate Bill 244, which was included as part of the Senate’s State Budget and adds $500,000 across the biennium to support a newly established Family Medicine Residency Program in the state’s North Country.

While General Funds were not restored, the Committee approved the Senate’s allocation of $1 each year towards the Tobacco Prevention and Cessation Program to maintain the program’s statutory status in case funds become available at a later date. Although $2.3 million in federal funds have been proposed and retained, federal funds are not likely to be available in the future due to federal changes.

Youth and Family Services

The Committee accepted the Senate’s budget proposal to reinstate the Office of the Child Advocate and restore approximately $1.6 million in funding for the Office. The restored funds would result in four positions being abolished, rather than nine, compared to the House’s version of the budget. The Committee agreed to adding language that would affect the functioning of the Office, including:

  • Clarifying that there should be non-partisanship in oversight duties
  • A nomination process that involves a nomination by the Governor and approval by the Executive Council (versus a gubernatorial appointment)
  • Requiring approval for out-of-state travel by the Joint Legislative Fiscal Committee, except that which is required to ensure children are receiving appropriate services

While it did not propose an increase in funding, the Committee approved the Senate’s proposed movement of $5 million from SFY 2027 to SFY 2026 to support youth residential placements, following a ten percent reduction for these placements as proposed by the House. The Committee also adopted the Senate’s House Bill 2 language that allows the DHHS to request additional funds through the Joint Legislative Fiscal Committee in the event that budgeted funding is insufficient.

Finally, the Committee of Conference approved the Senate’s proposed sale of the Sununu Youth Services Center during the upcoming biennium. The Senate estimated the sale would generate $80 million of revenue that would be deposited into the Youth Development Center Claims Administration and Settlement Fund in SFY 2027. However, while the proceeds of the sale are directed by State Budget language, that estimated $80 million is not formally incorporated into the Committee of Conference’s revenue projections.

Other Health-Related Services

The Committee adopted the Senate’s proposals for two key changes related to services for Granite Staters experiencing food insecurity. These changes included a $30,000 allocation towards the WIC Farmer’s Market Nutrition Program, which would have been defunded by the House’s proposal, as well as $105,000 to support two positions to administer the newly established Summer Electronic Benefits Transfer (EBT) Program.

Finally, the Committee supported the Senate’s repeal of the Prescription Drug Affordability Board (PDAB) in its entirety, while also retaining the House’s position to eliminate all funds for PDAB. Established in 2020, the PDAB was formed to help find prescription cost savings for public payers, while also ensuring that providers can still access the prescriptions they need to treat their patients.

Education

The Committee’s budget would retain most of the changes proposed by the Senate in the areas of Early Childhood Care and Education, K-12 Education, and Public Higher Education. However, the Committee made changes to the enrollment cap language for Education Freedom Accounts (EFAs), and the allocation for the University System of New Hampshire was reduced relative to the Senate’s version of the State Budget.

K-12 Education

The Committee maintained the Senate’s version of the budget and adjusted the House’s version of the adequate education grants. While the Committee kept the base per student grant ($4,351) and the differential aid adjustments for students eligible for free and reduced-price meals ($2,441) and those who are English language learners ($849), the Committee reduced the amount for students receiving special education services by approximately $900 from the House. This change would reduce the allocation to students receiving special education services to $2,229, likely reflecting the continuation of current policy providing a 2 percent per year increase rather than the House’s proposed boost to Special Education Differentiated Aid.

The Committee accepted the Senate’s recommendation of universal eligibility for EFAs beginning in SFY 2026 (academic year 2025-2026) and accepted the $3.9 million reduction in projected costs for EFAs based on anticipated participation in the program. These budgeted amounts are projected costs as, like the Adequate Education Aid to school districts, actual expenditures will depend on enrollment. The Committee adopted an amendment that removes the EFA enrollment cap, which would initially be set at 10,000 students, if the cap is not increased for two consecutive years.

Part of the Committee’s final budget proposal also includes language from the House’s budget proposal, retained by the Senate, that reinstates a form of Fiscal Capacity Disparity Aid. This aid would be allocated to municipalities that have relatively low taxable property values per student and would total up to $1,250 per student. There would be a sliding scale reduction for this aid that disappears for municipalities with more than $1.6 million in taxable property value per pupil. This aid would be in addition to the existing Extraordinary Needs Grants in the education funding formula, which are based on both relative property values and the number of students eligible for free and reduced-price meals.

However, these two forms of targeted aid would be capped for the largest communities in the state. In municipalities with more than 5,000 resident students, the total amount of Extraordinary Needs Grants and Fiscal Capacity Disparity Aid combined would be limited to $3,750 per student. Currently, only the cities of Nashua and Manchester exceed 5,000 resident students, and only Manchester would be impacted during the upcoming budget cycle, with a reduction of approximately $10.2 million in its allocation between SFYs 2026 and 2027.

Public Higher Education

The Committee recommended allocating $164.0 million to the University System of New Hampshire (USNH), which is $6.0 million less than the Senate budget and $35.0 million less than the current State Budget’s allocation to the System. The Committee of Conference budget would fund USNH at $87.0 million in the first year of the biennium, and at $77.0 million in the second year.

The Committee accepted the Senate’s proposal to remove a $30.0 million allocation of UNIQUE grant funds to USNH. The UNIQUE grant program provides financial support to college students from families with low incomes to help subsidize their education. These grants can typically be used by any college student in the state, not just students attending institutions of higher education through USNH or the Community College System of New Hampshire. The Committee’s acceptance of the Senate’s budget would move $12.0 million of UNIQUE funds to the General Fund and restore the remaining $18.0 million to UNIQUE grants over the biennium.

Other Education Policies

The Committee accepted the Senate’s language change regarding diversity, equity, and inclusion (DEI) prohibitions in public schools, including K-12, academic institutions, and institutions of higher education. The change replaces “…race, sex, ethnicity, or other group characteristics…” in the definition of DEI with “…characteristics identified under RSA 354-A:1…” Characteristics identified under RSA 354-A:1 include, “age, sex, gender identity, creed, color, marital status, familial status, physical or mental disability…national origin…[or] sexual orientation.” Schools and institutions that do not comply with the prohibition may lose access to public funding until the violation is resolved.

Municipalities are also included in this amendment. However, the legislation does not suggest towns and cities would lose access to any funding if they do not comply with the DEI prohibition.

Justice and Public Protection

The Committee of Conference largely accepted the Senate’s budget proposal among agencies in the Justice and Public Protection category of State expenditures, but proposed some key changes for funding at the Department of Corrections and adjusted policies governing the Youth Development Center settlement efforts.

Department of Corrections Funding

While the House would reduce funding for positions at the Department of Corrections by $35.3 million relative to the Governor’s proposal, the Senate reduced that total cut to about $22.5 million, proposing the elimination of 60 positions rather than the 190 positions the House would have eliminated and adding a $5.0 million back-of-budget reduction.

The Committee of Conference added about $1.6 million in the line items of House Bill 1 to the Department of Corrections budget, but also doubled the size of the back-of-budget reduction to $10.0 million. The Committee also added specifications as to which components of the Department’s budget within which $2.0 million of those $10.0 million in savings had to be identified. The total reduction to the Department’s budget, relative to the Governor’s proposal, would be $26.0 million under the Committee of Conference’s budget.

Youth Development Center Settlements

The Committee of Conference accepted the Senate’s position relative to funding for Youth Development Center settlements. The House and Senate both proposed adding $20 million to the Youth Development Center Claims and Administration Fund with General Fund appropriations, although the timing was different, with the Senate appropriating all those dollars in the first year. Proceeds from the sale of the Sununu Youth Services Center building would, under the Committee’s proposal, flow to the fund supporting the settlements.

The Committee of Conference also agreed to language that would shift the management of the Youth Development Center Claims and Administration Fund to the purview of the Executive Branch, rather than the current Judicial Branch oversight, and change both reporting and certain decision-making timelines.

Human Rights Commission

The Committee of Conference voted to continue the Human Rights Commission under the structure proposed by the Senate’s budget, including an attached, temporary advisory committee to assist in the implementation of corrective measures from a legislative audit. The House had proposed eliminating the Human Rights Commission entirely.

The Committee included a $521,000 back-of-budget reduction in the Human Rights Commission’s budget proposed by the Senate, however, and established a one-year advisory committee to be attached to the Human Rights Commission.

Liquor Commission Law Enforcement Authority

While the House proposed removing law enforcement authority from the Liquor Commission, the Senate proposedretaining that authority with the Commission. The Committee of Conference budget proposal would allow the Liquor Commission’s law enforcement authority to continue. The Committee of Conference also retained the Senate’s proposed back-of-budget reduction of $1.0 million to the Liquor Commission.

Liquor Commission funds would continue to be used as a backstop for the non-federal share of Medicaid Expansion, also known as the Granite Advantage Health Care Program, and for contributions to the renamed Governor’s Commission on Addiction Treatment and Prevention. The House agreed to the Senate position on this backstop, as the House had previously proposed funding Medicaid Expansion with General Funds.

Inspections and License Plates

The Committee of Conference recommended that motor vehicle inspection requirements be eliminated after January 2026. The House had recommended eliminating them entirely, while the Senate proposed limiting their scope. The Committee of Conference considered a limitation of scope before agreeing to eliminate them entirely after January 2026.

Emissions inspections, required in part due to an agreement with the federal government, may continue under the Committee of Conference plan. The State would be required to submit a request for altering their emissions testing requirements. If that permission is obtained, or if September 2026 is reached without obtained permission from the federal government, the State’s Motor Vehicle Air Pollution Abatement Fund inspection fee and the State-level requirements for emissions inspections would be eliminated.

Resource Protection and Development and Energy Policies

Many of the proposed policy changes related to energy policies and within the Resource Protection and Development category of the State Budget were removed from the final proposal. The Governor’s proposed changes to solid waste facility governance, as well as the House’s recommended overhaul of the Renewable Energy Fund, were both removed from the budget proposal. State support for the arts, which is within the Department of Natural and Cultural Resources, would be funded at levels proposed by the Senate.

Solid Waste

The Committee of Conference removed the proposed Solid Waste Facility Site Evaluation Committee from its State Budget proposal. While the Governor, House, and Senate all had differing versions of this new entity in each budget proposal, the House and the Senate could not reach agreement on the policy framework for it. As a result, without reaching a compromise, both the House and the Senate versions were eliminated from the budget.

Energy Policy and Funding Changes

The Committee of Conference accepted the Senate’s proposal to withdraw funds from the Renewable Energy Fund for use in the General Fund, including the Senate’s proposed retention of $2 million in the Renewable Energy Fund to support ongoing projects. The Committee of Conference did not adopt the House’s proposal to change the purpose of the Renewable Energy Fund to devote most of its resources to reducing ratepayer electricity costs in future biennia, leaving the Renewable Energy Fund’s current purposes intact.

The House-proposed language that would have changed the Renewable Portfolio Standard to remove solar energy was also rejected by the Committee of Conference. The Committee also rejected the Senate’s proposed enhancements to net metering for commercial electricity generators.

Arts Funding

The Department of Natural and Cultural Resources’ Division of the Arts would remain in statute under the Committee of Conference’s budget proposal in the same format proposed by the Senate. The House would have repealed this Division, but the Senate and the Committee of Conference voted to add $300,000 in direct funding, which is lower than the Governor proposed, and a credit against the two State business taxes that could generate up to $700,000 more revenue for the Division of the Arts if businesses use the credit.

General Government

Some of the most significant policy and funding changes in the General Government category of the State budget were for funding to support certain police and firefighter employee retirements, which was funded at a lower level than all three prior versions of the State Budget, and the alteration or removal of an array of policies attached to the House and Senate versions of the State Budget.

Retirement Contributions for Certain Law Enforcement and Firefighters

The Governor, House, and Senate all proposed boosting retirement benefits for certain police and firefighting personnel who had their anticipated retirement benefits altered after a 2011 law change and who were not vested in the retirement system by 2013. The House proposed a larger amount of funding than the Governor, supporting these benefits with a full $27.5 million in funds for each fiscal year from SFYs 2026 through 2034.

The Senate voted to delay implementation of the House’s policies by six months, which would reduce expenditures relative to the House by $13.0 million during the biennium.

The Committee of Conference reconstructed the policy to cost an estimated $15.0 million per year in total. Compensation calculations for retirement would be limited during the highest three years of compensation of an employee’s tenure, and a cap of 85 percent of an employee’s final compensation or $125,000, whichever is smaller, would limit employee retirement payments. The timeline for eligible employees for these revised payments would also be limited to those who were employed July 1, 2011 but not vested before January 1, 2012, rather than extending to September 2013. The age and tenure range for those employees who would be eligible for this enhancement was defined as people who have both attained age 45 and had at least 22 years of creditable service, in the Committee’s amendment.

Housing

The Committee agreed to retain the Housing Appeals Board, following its proposed repeal by the House, and puts the administration of that Board under the Board of Tax and Land Appeals. While the Committee restored both, each Board received a slight funding reduction to account for staffing and position changes. $365,922 was allocated to the Housing Appeals Board, while the Board of Tax and Land Appeals was funded at $2.1 million for the biennium.

In addition to a reduction in funding, the Committee also adopted the Senate’s proposed administrative changes to the Boards’ decision-making processes. Under the new structure, members from opposite Boards can make decisions and serve as tiebreakers if a consensus cannot be reached.

The Committee removed the Senate’s proposed filing fee increases for the Board of Tax and Land Appeals, which were proposed to be increased from $65 to $125.

While it did not allocate new funds, the Committee adopted the Senate’s extension of lapsing funds for the Housing Champions Program, which was established in the current SFYs 2024-2025 State Budget and provides grants to municipalities to encourage zoning law changes to support the construction of new affordable housing.

State Commission on Aging

The House voted to eliminate the State Commission on Aging, while the Senate voted to retain it in a modified form. The Committee of Conference agreed to the Senate’s version, which would continue the Commission with a flexible fund of $300,000 to support compensation for the Executive Director and the Commission’s activities.

The State Commission on Aging would also have terms for membership extended from two years to three years, and an attached advisory council focused on the system of care for older adults in the state, under the Committee of Conference’s proposal.

Municipal Aid Funding

The Committee of Conference voted to continue the current policy of devoting 30 percent of State Meals and Rentals Tax revenue for aid to municipal governments, provided on a per capita basis. The House had voted to set the funding level at $137 million per year, which is slightly higher than the current year’s funding level, and not have it vary throughout the biennium.

The House also voted to repeal a statute, suspended since 2010, for a separate municipal revenue sharing formula. The Senate would have continued the suspension of the statute, rather than repeal it. The Committee of Conference agreed to repeal this statute, matching the House’s position.

Policies Removed and Changed, Including Restrictions on Foreign Ownership

The House version of the State Budget would have included a wide array of policies, many of which were removed in the proposal from the Senate. In turn, the Senate added in several of its own policy proposals. Most of these policies were removed in Committee of Conference, but several were maintained or altered by the Committee.

The policy language prohibiting diversity, equity, and inclusion initiatives in the State government, local governments, and school districts was maintained as altered by the Senate.

The Senate’s proposed prohibition on sales or leases of property within a ten-mile radius of key sites around the state to certain foreign governments or individuals controlled by them was expanded. Under the Committee of Conference’s proposed language, the governments, government officials, companies organized within, or agents and employees of China, Russia, Iran, Syria, and North Korea would be prohibited from purchasing permanent, temporary, or controlling ownership or lease of any land, buildings, or other land-attached resources within New Hampshire.

Back of Budget Reductions

The so-called “back-of-budget” reductions would require certain agencies to find savings in their budgets without identifying specific line items, but by lowering their overall expenditures compared to their topline totals.

The House proposed a total of $95.5 million in back-of-budget reductions among State agencies. The Senate modified those back-of-budget reductions, shifting which agencies would be impacted by them, and added a requirement that the Governor would identify $32.0 million in revenue or savings across State government, which replaced the House’s proposed 5 percent fee on most of the State’s dedicated funds. The Senate had, in total, about $107.7 million of this form of back-of-budget reduction.

The Committee of Conference added $5.0 million to the back-of-budget reduction total at the Department of Corrections, lifting the amount the Department of Corrections was expected to find in savings to $10.0 million. Otherwise, the Committee of Conference retained the back-of-budget reductions the Senate proposed, leading to a total of $112.7 million in unspecified reductions in funding for services across the State’s Executive Branch of government.

Policy language attached to the State Budget gives State agencies the option to seek additional funding in SFY 2027 if they were one of the agencies required to reduce their appropriations in back-of-budget reductions. These new appropriations would be permitted if audited revenues were higher than expected in SFY 2026, if General Fund lapse amounts meet or exceed their targets in SFY 2026, and if the Governor, Executive Council, and Joint Legislative Fiscal Committee approve of the new appropriation.

The Rainy Day Fund

Revenue and expenditure projections for the Committee of Conference’s budget proposal would draw from the State’s Rainy Day Fund at the end of SFY 2025, and then contribute back to it at the end of SFY 2027. The Committee projectedthat $88.8 million would be drawn from the Rainy Day Fund to balance the budget at the end of SFY 2025. The State Budget proposal from the Committee would leave approximately $49.6 million in undesignated General Funds unappropriated for inclusion in the Rainy Day Fund at the end of SFY 2027.

This undesignated balance would result in a projected Rainy Day Fund balance of $253.3 million at the end of SFY 2027. This amount would be lower than the current balance of $292.5 million, but higher than the amounts projected by the Governor ($222.0 million) or the House ($228.8 million) at the end of the biennium under their budget proposals. The Senate Budget’s projected ending balance was $261.0 million, partly reflecting the slightly higher revenue projections estimated by the Senate than the Committee of Conference.

Next Steps in the Process

The typical step at the end of the State Budget process is that the Committee of Conference’s proposal would go before the House and the Senate for an up-or-down vote. There are no opportunities for floor amendments during the process under current House and Senate rules. The Committee of Conference versions of House Bills 1 and 2 have to pass through both chambers with majority votes before they are sent to the Governor for her consideration.

Under Part Second, Article 44 of the New Hampshire State Constitution, the Governor’s signature on a passed bill always results in a bill becoming law. A gubernatorial veto sends the bill back to the Legislature, and that bill only becomes law if the Legislature overrides the Governor’s veto with a two-thirds majority roll-call vote from both chambers of the Legislature. When the Governor does not sign a bill within five days (excluding Sundays) while the Legislature is in session, the bill becomes law as if the Governor had signed it. However, if the Governor does not sign a bill within five days (excluding Sundays) and the Legislature has adjourned, the bill does not become law and the Governor has executed a “pocket veto” of the bill.

If the Legislature believes that the Governor may not approve of the budget, the Legislature may pass a House Joint Resolution to fund services at the same levels that they are currently funded for an ongoing period. So far this century, the Governor has vetoed the State Budget three times: 2003, 2015, and 2019. In 2019, the Legislature voted to extend the SFY 2019 Adjusted Authorized funding amounts for three more months, leading to a final budget deal in Septemberafter the Governor vetoed the budget. In 2015, the Legislature authorized a six-month extension to the SFY 2015 budget levels, although an agreement was still reached in September 2015.

The new State Fiscal Year begins on July 1, 2025. The State needs to establish some form of new expenditure authority for most State operations and services by that date for those services to continue, as the current State Budget expires June 30.