Budget & Taxes (Pensions)

HB 197 requires the state to pay 7.5% of retirement contributions for group I teachers and group II members (including local police and firefighters) employed by cities, towns, and other local governments. This shifts the payment responsibility from local employers to the state, beginning in fiscal year 2026. The bill directly affects local governments that fund these retirement contributions, reducing their costs by approximately $28 million annually starting in 2026. The state will cover this 7.5% share using General Fund resources, while local governments will see a corresponding decrease in their retirement-related expenses.

The bill authorizes video lottery terminals (VLTs) at charity gaming facilities and repeals historic horse racing licensing. It requires existing licensed operators to run VLTs, with 30% of revenue distributed to charities (35%), problem gaming services (0.25%), retirement system (4.75%), and the lottery commission. The bill also mandates responsible gaming plans and establishes procedures for handling unclaimed tickets. It will take effect January 1, 2028, replacing historic horse racing with VLTs at charity gaming facilities.

SB 601 changes how New Hampshire funds pension costs for public employees in school districts and municipal employers. Beginning July 1, 2026, the state will pay 7.5% of pension contributions for group I teachers (school districts) and group II members (municipal employees), shifting the remaining 92.5% to local employers. The state’s share will be transferred from the education trust fund to the retirement system quarterly, treated as part of general revenue. This affects school districts and municipalities that employ teachers or municipal staff covered under the state retirement system. The bill modifies existing contribution rules without new funding or positions.

HB 1170 provides a permanent supplemental retirement stipend for certain retired New Hampshire state employees (Group II, primarily police and fire) and their beneficiaries. Retirees who were retired for 10-19 years (120-239 months) as of July 1, 2025, receive $500 per year of retirement added to their monthly pension, while those retired 20+ years (240+ months) receive a one-time $5,000 addition. The stipend becomes part of the retiree’s permanent base annuity, paid monthly from the state general fund, with an estimated FY 2027 cost of $269.6 million. This policy directly affects current retirees and beneficiaries who meet the retirement duration criteria, with no impact on employer contributions or the retirement system’s unfunded liability.