New Hampshire State Budget FY2026 Analysis

New Hampshire spent $15.9 billion across all funds in FY2026, or $11,230 per resident. All-funds spending counts the general fund, federal grants, and dedicated state funds together — the fairest basis for comparing states, since they differ widely in how much they route outside the general fund.

The general fund — the discretionary portion the legislature actually debates — was $3.9 billion, or 24.2% of total spending. The remainder is largely federal grants (Medicaid above all) and dedicated revenues such as fuel taxes earmarked for highways.

Reserves in the rainy day fund stood at $230 million. Because nearly every state is constitutionally required to balance its operating budget, reserves rather than borrowing are how states absorb revenue shortfalls in a downturn.

New Hampshire's FY2026-27 biennial budget, signed by Governor Kelly Ayotte on June 27, 2025, appropriates $15.89 billion across all funds — a 3.1% nominal increase over the FY2024-25 budget, which the New Hampshire Fiscal Policy Institute notes is roughly flat or negative once inflation is counted. The General Fund carries about $3.85 billion (24.3% of the total) and the Education Trust Fund $2.61 billion, both smaller shares than in the prior biennium. The state entered the cycle with a constrained revenue base: the Interest and Dividends Tax was fully eliminated in 2025, completing a multi-year phase-out and removing a meaningful revenue source just as pandemic-era federal aid receded. The budget leans on Medicaid cost containment — new monthly premiums of $60–$100 for Granite Advantage adults, prescription copayments raised from $1–$2 to as much as $4, and a 100-hour-per-month community engagement requirement — while more than doubling Education Freedom Account funding to $87.1 million (+119%). It also restores retirement benefits for Group II police and firefighters at a cost of $42.0 million over the biennium. Budget writers project only $24.7 million in unspent state funds, with the rainy day fund estimated at $228.4 million by the end of FY2027 — thin margins that leave little cushion if business tax revenues underperform through the biennium.