(August 19, 2025) – Governor Kelly Ayotte has signed the following three local tax cap and budget cap bills from the 2025 session into law: HB200, HB374, and SB105.
HB200 “relative to the procedure for overriding a local tax cap” strengthens local tax caps under RSA 32:5-b by requiring a 3/5 supermajority ballot vote of voters to override the tax cap. Previously, local tax caps were overridden by a simple majority despite the fact that a 3/5 supermajority voted to put the local tax cap in place. HB200 was prime sponsored by Rep. Diane Pauer (R-Brookline) with co-sponsors Rep. Berezhny (R-Grafton), Rep. Bryer (R-Northwood), Rep. Nalevanko (R-Alstead), Rep. Rollins (R-Newport), Rep. Spilsbury (R-Charlestown), Rep. Bailey (R-Milton), Rep. Burnham (R-Milton), Sen. Avard (R-Nashua), Sen. Murphy (R-Manchester) and Sen. Sullivan (R-Manchester). Currently, 7 towns (Alstead, Brentwood, Atkinson, Litchfield, Middleton, Milton, Nottingham) and 2 school districts (Brookline, Newfound Regional) have adopted local tax caps. With this new 3/5 supermajority override provision, more towns and school districts local tax caps may now consider adoption.
HB374 “relative to local tax cap and budget laws” makes important clarifications and adjustments to the local tax cap (RSA 32:5-b) and new school district budget cap (RSA 32:5-e) from 2024, including statutory wording for cap adoption, better dates for annual inflation indices, improved treatment of SAU budgets for school districts, improved definitions, and clarified references. It also added provisions that allows towns and school districts to directly adjust an existing local tax cap or budget cap. HB374 was prime sponsored by Rep. Diane Pauer (R-Brookline) with co-sponsors Rep. Bryer (R-Northwoord), Rep. Edwards (R-Auburn), Rep. Kofalt (R-Wilton), Rep. Lascelles (R-Litchfield), Rep. Tim Mannion (R-Pelham), Rep. Tom Mannion (R-Pelham), Rep. McFarlane (R-Orange), Rep. Dan McGuire (R-Epson), Sen. Avard (R-Nashua), Sen. McGough (R-Merrimack), Sen. Murphy (R-Manchester), and Sen. Sullivan (R-Manchester).
SB105 “enabling towns to adopt budget caps” now permits towns to adopt budget caps, like school district budget caps available to school districts. This powerful, common sense law, RSA 32:5-g, now enables towns to set a budget (spending) cap that adjusts annually by a combination of an inflation index and change in town population. SB105 was prime sponsored by Sen. Keith Murphy (R-Manchester), with co-sponsors Sen. Gray (R-Rochester), Sen. Innis (R-Bradford), and Rep. Pauer (R-Brookline).
Together, these three bills provide town and school district voters with important and improved “local control” fiscal tools to ensure careful prioritization in budgeting and spending in a sustainable manner, which in turn will lead to reasonable local property taxes, a top priority for citizens across the Granite State. Taxpayers do not have the unlimited ability to shoulder giant spending and property tax increases, and local tax caps limiting the tax effort and budget caps limiting the total spending, are part of achieving this goal. We thank the prime sponsors and co-sponsors for their leadership on these local tax and budget caps. SDGA proudly supported these bills as they further our core values of responsible governance, fiscal prudence, and academic excellence in our NH public education system and communities.
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