On Thursday, the House passed HB 1 and HB 2 on a bipartisan voice vote after considering many floor amendments and having several hours of deliberation. The budget proposal approves a $15.76 billion spending plan over the next two years. This plan represents an 18 percent increase in spending over the current state budget for all state agencies and budget categories. In total, the House budget and approved floor amendments added approximately $240 million in additional funding over the governor’s proposal, reflecting bipartisan House spending priorities. 

Here is a summary of the adopted House 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 appropriates $32.5 million in FY 24 and $32.6 million in FY 25 (a $4.6 million decrease in the next budget cycle). Exact amounts per year will be based on twelve percent of revised revenue estimates from the gas tax and motor vehicle fine revenues. (Additional funding is proposed in SB 270.)
• Funds municipal bridge aid at an estimated at $6.8 million as determined by SB 367, 2014 Session, Chapter 17. (Additional funding is proposed in SB 270.)
• Provides $27.9 million in state surplus to fund non-lapsing State Aid Grants (SAG) for wastewater projects identified in the 2023 SAG Project Priority List issued by the Department of Environmental Services wastewater state aid grants to municipalities.
• 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.) 
• Makes a one-time appropriation of $15 million to InvestNH for housing grants to municipalities and $30 million to the Affordable Housing Fund using state surplus. (A portion of this proposal aligns with SB 231.)
• Establishes a State and Local Cybersecurity Grant Program and funds $1.2 million for FY 24 and $1.6 million for FY 25 for the state match to a federal cybersecurity grant, which will provide direct grant assistance to cities and towns.
• Funds a one-time $50 million payment to reduce the New Hampshire Retirement System (NHRS) unfunded actuarial accrued liability (UAAL), saving municipal employers $105 million over the 20 years of the amortization schedule.
• Funds a $250 million proposal to roll back some of the 2011 pension reform through FY 2033 with $50 million in appropriations during next biennium for retirement contributions for certain Group II police and fire employees who were not vested prior to 2012 but would have been prior to 2013. The proposal also requires the state to pay the municipal cost estimated at $7.5 million per year for the next 10 years.
• Provides no state funding toward the retirement costs for teachers, police, and firefighters. (SB 114, which would restore a 7.5 percent state share of employer costs, was tabled in the Senate, preserving it for later consideration in the state budget trailer bill, HB 2, when the Senate considers that bill.)
• Contains no provision for municipal aid.
• Continues to suspend revenue sharing under RSA 31-A, which would return a portion of state general fund revenue to cities and towns. (It has been suspended since 2010 and every year thereafter.) A restoration would have provided $25.2 million per year to municipalities. 

The budget now goes to the Senate; and the Senate Finance Committee is scheduled to begin its budget review on Monday, April 10 at 1:00 p.m. in State House Room 103. We will continue to provide updated information as we learn it, and we encourage you to contact your senators and the Senate Finance Committee to explain the importance and impact of these important state aid programs on your budgets and local property tax.