Effort to enable town budget caps passes N.H. Legislature

Chichester voters debated spending at the 2025 town meeting, which took two sessions to settle.

Chichester voters debated spending at the 2025 town meeting, which took two sessions to settle. Catherine McLaughlin

By CHARLOTTE MATHERLY

Monitor staff

Published: 05-08-2025 5:34 PM

Making good on their campaign promises, New Hampshire Republicans sent a bill to the governor that would allow towns to adopt local spending caps at their next town meeting.

Passed on Thursday, the legislation gives residents the power to put a cap on their town’s spending with a three-fifths vote. That restriction wouldn’t be entirely up to citizens, though, as it relies on a formula set by the state: the current expenditure per resident, multiplied by the number of residents. Over time, it would adjust for inflation.

Senate Bill 105 would prohibit any amendments to a proposed town budget cap before voting. Any effort to change or override a spending limit would also require a three-fifths vote.

The legislation will soon head to Gov. Kelly Ayotte’s desk. If she signs it, the new law would go into effect before next year’s town meetings. The option for budget caps already exists for cities and school districts, though those are more flexible and can include specific amounts proposed by residents.

Continuing a tug-of-war over local control, Republicans pitched it as an opportunity to rein in what they view as unruly overspending by municipalities.

“Local town spending continues to increase year after year with no end in sight for taxpayers, and our constituents do not have the unlimited ability to pay for local town spending that is, frankly, out of control,” said Rep. Diane Pauer, a Republican from Brookline.

Conversely, Democrats said it would infringe on local control and blamed high property taxes on the state’s failure to support local services. Rep. Eleana Colby, a Democrat who’s also on the select board in Bow, said it’d threaten the ability of towns to provide those services.

“For years, the downshifting of costs onto property taxpayers has required local municipalities to meet basic community needs without adequate assistance from this state,” Colby said. “And now, this proposed bill would further hamper a community’s ability to navigate the chaos.”

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Charlotte Matherly is the statehouse reporter for the Concord Monitor and Monadnock Ledger-Transcript in partnership with Report for America.