While pledging to cut state spending by $150 million, Gov. Kelly Ayotte, a former prosecutor and New Hampshire attorney general, put the money where her mouth is by funding law enforcement programs to address immigration and drug trafficking.

As Ayotte addressed state legislators on Thursday to unveil her proposed budget for the next two years, she acknowledged New Hampshire’s uncertain budget landscape and called for a “recalibration” of state spending. She said she’s prioritizing small businesses and local opportunities.

“Much of what we accomplish best in our state is done at the local level, and that’s why we are pushing more funds than ever to the local level,” Ayotte said. She challenged local officials to take a “hard look” at their own spending, too.

Her draft budget includes rosy projections for revenue from business taxes, which have declined in recent months. The budget totals $7.9 billion in 2026 and just over $8 billion for 2027.

Millions more for lawenforcement

Ayotte proposed allocating $33 million to the state’s Group II retirement fund, which provides pensions and benefits for firefighters, nurses and police, corrections and parole officers – to which lawmakers from both political parties applauded.

“It’s the right thing to do,” Ayotte said. “This is only the beginning, but it is a big step forward in ensuring that they receive the retirement that they have earned.”

A group of workers sued the state last fall, alleging that the state hadn’t paid them the retirement benefits they were promised long ago. Former governor Chris Sununu also sent $26 million to the Group II retirement fund to repay part of that last year.

Ayotte also championed the Northern Border Alliance and wants to spend $3.5 million on anti-drug trafficking programs to fund overtime for law enforcement.

She also said, in no uncertain terms, that she wants lawmakers to tighten what she’s called a broken bail system to support law enforcement.

“We depend on them, and they depend on us to make sure that they have the tools that they need,” Ayotte said. “I cannot emphasize this enough: Send me legislation to fix this once and for all.”

Special education, EFAinvestments

In education, Ayotte said she plans to fund universally available Education Freedom Accounts – though she didn’t specify an amount – and put $98.8 million toward special education, a nearly 50% increase from the current budget.

“We understand the skyrocketing costs facing towns in providing special education and we want to lessen the financial burdens and ensure students are receiving the resources that they need,” Ayotte said.

In higher education, Ayotte said she’ll keep community college tuition flat and put $6 million toward dual enrollment to enable more high-school students to jump into college classes, though she’s cutting some state funding to the university system.

Ayotte also announced $1 million in grants to help local school districts implement policies restricting cell phone use and plans to impose an ultimatum on state regulations for housing, requiring the state to process approvals within 60 days or lose its ability to act.

Cuts and priorities

Ayotte wasn’t specific about the cuts she plans to make. She said they’ll come from nixing “bloated” contracts with non-New Hampshire vendors and re-evaluating how state agencies operate.

She’s repeatedly promised not to cut state services for the people who need them and plans to allocate certain funds toward mental health.

That includes more than $1 billion throughout the next two years for people who have developmental disabilities, including transportation to appointments. She also wants to send $10 million to community mental health centers across the state and would continue to fund the Recovery Friendly Workplace program, which is meant to help people in substance use recovery continue to work.

 

Charlotte Matherly is the statehouse reporter for the Concord Monitor and Monadnock Ledger-Transcript in partnership with Report for America. Follow her on X at @charmatherly, subscribe to her Capital Beat newsletter and send her an email  at cmatherly@cmonitor.com.