New Hampshire
Facing a potential 2025 budget shortfall, Craig, Kelly avoid specifics in debate • New Hampshire Bulletin
Joyce Craig and Kelly Ayotte made many economic differences clear during a debate Tuesday. Ayotte, the Republican gubernatorial nominee, applauded the elimination of the interest and dividends tax next year, while Craig, the Democratic nominee, said the cut, passed by lawmakers, amounted to a tax cut for the wealthy.
But the candidates were less forthcoming on one key question: How should the next governor handle a potential significant decline in revenues next year?
“Do you have any contingency plan for dealing with a billion dollar shortfall in our budget?” asked Jac Cuddy, the council’s executive director and the moderator of the debate.
Despite multiple prompts during the Mt. Washington Valley Economic Council gubernatorial debate, neither contender fully answered that question. The candidates instead clung to familiar territory, falling back on the policy disagreements that have defined their campaigns.
But the budget question could be unavoidable for the next governor.
After multiple years of flush state revenues spurred by historic federal stimulus during the COVID-19 pandemic, as well as strong revenues from the state’s business taxes, the flow of money is likely to decrease.
New Hampshire’s share of American Rescue Plan Act funds is near an end, with most of the remaining share required to be spent by 2026. And future revenue projections are lower, in part because of the reduction of the interest and dividends tax, according to a monthly revenue report by the Department of Administrative Services.
That means the next governor might face an unpalatable choice when she crafts her first budget: raise taxes to make up revenues or find ways to cut some state programs.
Neither candidate appeared interested in detailing their preferred response to that situation Tuesday.
Instead, the two sparred over the state’s 2022 abortion law barring most abortions after six months of pregnancy, the value of the state’s education freedom account program, and the best approach to diversifying energy sources and lowering costs.
When it came to the interest and dividends tax, which is due to be phased out after April 2025, Craig painted the tax cut as a handout to wealthier Granite Staters. Research shows that higher income households were much more likely to pay the tax than lower-income households. Craig said she would restore the tax but change the threshold to make sure it would not affect middle class families.
Ayotte said that proposal was tantamount to a tax increase to Granite Staters and used it to bolster her argument that Craig would usher in higher taxes as governor. Craig pledged not to introduce an income or sales tax.
Addressing education funding in the state, Ayotte repeated her opposition to a November Superior Court ruling in which Judge David Ruoff found the state’s $4,100 per pupil base grant for public schools to be unconstitutionally low, and held that it should be at least $7,356.01.
Ayotte said it was inappropriate for the court to have weighed in, arguing the funding level is a question that should be put to the Legislature and the governor. But she did agree that the state should put more money into targeted funds for school districts in which property taxes are inordinately high
Craig, who supports the ruling, said the current level of state education funding is woefully inadequate and has helped keep property taxes high. She also criticized the education freedom account program, which she said could “decimate” public schools if allowed to grow.
Ayotte countered that the program, which allows low income families to use state education funds toward private school and home school expenses, provides educational opportunities for children who aren’t succeeding in their public school.
The two agreed that they would not support overriding local zoning codes using state statutes in order to facilitate more housing. But both candidates do support some of those zoning overhauls, and both have endorsed legislation to require towns to allow more accessory dwelling units to be developed by property owners.
On energy policy, Ayotte argued that Craig’s positions in favor of expanding clean energy would prove too costly and were too aligned with other New England states. Craig countered that the reforms are necessary to reduce the state’s carbon footprint and that they would ultimately lower costs.
And on many answers, the two candidates returned to familiar attack lines – Ayotte accusing Craig of adopting progressive policies akin to Massachusetts and failing to lead Manchester through a drug and homelessness crisis, and Craig hammering Ayotte over her past votes as U.S. Senator to defund Planned Parenthood and her support for the overturning of Roe v. Wade in 2022.
After about an hour, the state budget question remained largely unaddressed.
“I’m just cranky and old at this point, and I haven’t done very well as far as getting you to answer questions about the huge potential budget deficit that we have,” Cuddy said. “So as we get closer to finishing up, the more specific you can be, the more I’d appreciate it.”
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Streets of Portsmouth after snow storm
The streets of Portsmouth are still in the process of being cleaned up, as seen the afternoon of Tuesday, Jan. 27, 2026, following a huge snow storm.
It may be March, but winter in New Hampshire is far from over. Just one week after a blizzard tore through the state with heavy snow and high winds, the state is getting another round of snowfall.
The state will get three to five inches during the evening and night of Tuesday, March 3, says the National Weather Service (NWS) of Gray, Maine. While the accumulation will not be significant, the snowfall may cause dangerous road conditions and a layer of ice on the ground in certain parts of the state.
Here’s what to know before tonight’s snow in New Hampshire, including snow totals and timing.
When will it snow in NH tonight?
According to the NWS, it will start snowing in New Hampshire during mid-afternoon or early evening and continue through the night. Specifically, snow will arrive to the southern part of the state around 2-3 p.m., spreading northwards through the rest of New Hampshire by 5 p.m.
Rain or freezing rain will mix in later this evening across southern New Hampshire, creating a wintry mix. All precipitation should move out of the state by midnight.
Due to the timing of today’s snowfall, the Tuesday evening commute will be affected, with the NWS warning to slow down and exercise caution while driving.
How much snow will NH get tonight?
New Hampshire will get one to four inches of snow tonight, with one to two inches in northern New Hampshire, two to three inches in southern New Hampshire and three to four inches in the center of the state, with the possibility for five inches in localized areas.
In the Seacoast specifically, Portsmouth, Rye, Hampton and York are expected to get between two to three inches of snow, while Dover, Exeter and Rochester may get up to four.
The wintry mix may also cause a light glaze of ice across southern New Hampshire.
NH weather watches and warnings
The NWS has issued a winter weather advisory for the state of New Hampshire, in effect from 1 p.m. on Tuesday, March 3 through 4 a.m. on Wednesday, March 4.
Sign up for weather SMS alerts
What employers are getting wrong, and how to fix it before it becomes a claim
New Hampshire’s employment law landscape heading into 2026 may not be dramatically different from last year, but the real risks lie in implementation missteps. From the initial setting of wages, to calculating and distributing wages, employers will likely find a specific statute and/or labor regulation governing the transaction. Failure to follow these detailed wage and hour laws can result in significant back wages and other penalties being imposed by the state or federal Department of Labor following an audit. Fortunately, however, this area of employment law is relatively easy to master, once you are familiar with the basics.
Notice compliance
One of the most common pitfalls for employers in New Hampshire is misunderstanding the wage and hour notice requirements under RSA 275 and the related New Hampshire Department of Labor Administrative Rules.
At the time of hire, employers must notify employees in writing of their rate of pay and the day and place of payment. This notice is traditionally delivered to employees by way of an offer letter or some sort of “New Hire Rate of Pay” form. (A sample form is available from the New Hampshire Department of Labor website.) What surprises most employers, however, is that Lab. 803.03(f)(6) also requires employers to request and obtain their employees’ signatures on this written notification of wages, and employers must keep a copy of the signed written notification of wages on file. Further, employers must notify employees in writing during the course of employment of any changes to wages or day of pay prior to such changes taking effect, and the employer must obtain the employee’s signature on this subsequent notification as well. (See RSA 275:49; Lab. 803.03.)
Employers are further required to notify employees in writing, or through a posted notice maintained in a place accessible to employees, of:
• employment practices and policies with regard to vacation pay, sick leave and other fringe benefits.
• deductions made from the employee’s payroll check, for each period such deductions are made.
• information regarding the deductions allowed from wage payments under state law. (RSA 275:49; Lab. 803.03.)
Policies regarding vacation and sick leave should inform employees whether or not the employer will “cash out” unused time at year end or at the end of employment, and if so, under what terms. Again, if any changes are made to vacation pay, sick leave and other fringe benefits during the course of employment (all of which are considered “wages” under New Hampshire law), employers must request and obtain their employees’ signatures on the written notification of the change, and must keep a copy of the signed form on file. (Lab. 803.03.) Importantly, notification by way of pay stub alone is not sufficient, and, these requirements apply to both increases and decreases in pay.
Two-hour minimum (reporting pay)
Another frequently overlooked obligation is New Hampshire’s two-hour minimum reporting pay requirement. Under RSA 275:43-a, non-exempt employees who report to work but are sent home early must generally be paid for at least two hours. Weather-related closures, client cancellations or operational slowdown days can trigger this rule. Employers should also note that the New Hampshire Department of Labor currently applies this law to remote-based employees. Consequently, employees who “report to work” at an employer’s request from a home office may likewise have a right to two hours of pay, depending on the circumstances.
Salaried vs. hourly employees
Misclassification of employees as exempt from overtime remains a significant source of compliance exposure. The position’s job duties — not the titles or label such as “salaried” — determine whether an employee qualifies for an overtime exemption.
Employers, particularly in nonprofits, health care and small businesses, unintentionally misapply exempt classifications to roles such as administrative staff, office managers, executive assistants, program coordinators or hybrid jobs that involve significant non-exempt tasks. Over time, as organizational needs evolve and employees take on broader responsibilities, job duties can drift outside of an exemption’s scope.
Best practice is to periodically review job descriptions and actual job duties to ensure continued compliance with exemption criteria, particularly following any significant restructuring or job redesigns.
Peg O’Brien is chair of McLane Middleton’s Employment Law Practice Group. She can be reached at margaret.o’brien@mclane.com.
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