Biennial State Budget Adopted

On Wednesday the House and Senate adopted a compromise budget negotiated with the governor for the biennium that began July 1, 2019.  We thank the governor and legislature for reaching this compromise and avoiding the negative impact on property tax rates that any further state budget stalemate would have created. 

The compromise budget, HB 3 and HB 4, contains all the municipal funding that had been included in the budget adopted by the Legislature last June. Here is a summary of that funding:    

• $40 million over the biennium ($20 million each year) for unrestricted municipal aid. For a list  by municipality—the column on the right shows the estimated two-year total. This is the same list that was provided in June with the distribution based on the student population and the number of eligible free and reduced lunch students in each municipality.  However, we understand that these student counts have been updated since June, so the actual amount of the distribution to each municipality may be slightly different from the amounts shown on this list.  

Payment of the fiscal year 2020 municipal aid (one half of the estimated amount in the right-hand column) is anticipated to be made by the state treasurer on or before October 15, 2019.  This money may be used to reduce the 2019 property tax rate or may be considered unanticipated revenue and expended under the provisions of RSA 31:95-b, even if the municipality has not adopted that statute.  

The fiscal year 2021 municipal aid (again, one half of the estimated amount in the right-hand column, to be paid on or before October 1, 2021) is not unanticipated revenue under RSA 31:95-b. That money may be used to reduce the 2020 property tax rate or appropriated in municipal budgets next year. The Department of Revenue Administration will issue additional information about the municipal aid next week.  

• $68.8 million each year in meals and rooms tax distribution, which is the same amount distributed the past four years; 

• Funding for 70 wastewater projects substantially completed by December 1, 2019, bringing the state aid grant (SAG) program up to date in state funding (a list by project); 

• Approximately $36 million each year for highway block grants and $6.8 million each year for municipal bridge aid; 

• $6 million to the Department of Environmental Services for studying, investigating, and testing contamination caused by perfluorinated chemicals (PFAS) and for preliminary design of a treatment system for such contamination; 

• $400,000 over the biennium to match federal grants for public transit systems; 

• $1.8 million for demolition of state-owned buildings in Concord, Lebanon, and Conway; 

• Funding for the Granite Shield Program, which provides $2.9 million over the biennium to municipal and county law enforcement. 

• The compromise budget includes additional education funding for both years of the biennium. The difference between the education funding adopted by the legislature in June and the funding in the compromise budget is that a significant portion of the additional education money in fiscal year 2021 is one-time funding and will not automatically be part of the education funding formula in the next biennium. A new commission to study the education funding formula is established in HB 4.

Here are the Preliminary Estimates of Education Funding by municipality for FY 2020 and FY 2021 (which shows the one-time additional aid based on free and reduced lunches and fiscal capacity disparity aid).