HB 1, the governor’s proposed biennial operating budget for the period July 1, 2024 – June 30, 2025, and HB 2, the so-called “trailer bill” which contains the statutory changes necessary to implement the budget, have arrived and are publicly available. The House Finance Committee has been meeting with state agencies to obtain a better understanding of what is—and what is not—included in the proposed budget. It is too early in the budget process to predict what levels of municipal funding will be approved by the legislature and signed into law by the governor. Over the next several weeks, House committees will be using early revenue projections to propose amendments to HB 1 and HB 2, reflecting House spending priorities.

Here is a summary of the governor’s operating budget for the fiscal years ending June 30, 2024, and 2025, as it relates to towns and cities: 

• Estimates meals and rooms tax distribution to cities and towns to remain level at $121.1 million in FY 24 and a potential increase to $123.5 million in FY 25.
• Funds highway block grants based on estimated highway fund revenues and appropriate $32.0 million in FY 24 (down $2.7 million from FY 22) and $32.1 million in FY 25 (down $3.2 million from FY 23). (Note SB 401 increased highway block grants by $30 million in FY 23 using surplus funds outside the budget process.) (Additional funding is proposed in SB 270 —see article below.)
• Funds for the municipal bridge aid are estimated at $6.8 million as determined funding, SB 367, 2014 Session, Chapter 17). (Additional funding proposed in SB 270 —see article below.)
• Provides no funding for the state’s 20% share of the costs for wastewater projects beyond those that were approved in FY 23. However, the governor’s executive summary calls for $27.9 million in state surplus to be used to fund wastewater state aid grants to municipalities. (This proposal aligns with the amounts proposed in SB 230 and HB 311 as we wrote about in Bulletin #6).
• Funds reimbursements to municipalities involved in flood control compacts at $830,000 each year.
• Funds $5 million each year for the Land and Community Heritage Investment Program (LCHIP) (Maintaining the current funding level.) 
• Creates a one-time appropriation of $30 million to InvestNH for housing and $25 million to the Affordable Housing Fund using state surplus. (A portion of this proposal aligns with SB 231.)
• Provides no state funding toward the retirement costs for teachers, police, and firefighters. (SB 114, which would restore a 7.5% state share of employer costs was tabled, which preserves the bill for later consideration in the state budget trailer bill, HB 2).
• Contains no provision for municipal aid.
• Continues to suspend revenue sharing, which provided $25.2 million per year to municipalities before its suspension in 2010. (It has been suspended every year thereafter.)

As we mentioned in Bulletin #3, the House has continued to provide the opportunity for online testimony submission. In the weeks since the publication of that edition of the Bulletin, we have heard from many legislators that they do prefer hard copies of testimony, and that committees have varying practices with respect to viewing the online portal. Many legislators receive quite a large volume of emails on a variety of topics, and it is easier for them to sort, file, and evaluate testimony if it is provided as part of the record for the public hearing.

NHMA is happy to print and provide any committees with any written testimony from our members. We do ask, however, that you send it to us via email (governmentaffairs@nhmunicipal.org) at least 24 hours in advance of the hearing where you want it delivered. If you email it the morning of the hearing, we cannot promise that we will have staff available to print and deliver the hard copies to the state house as we will likely be at the state house already for that or another hearing.