GOP Tax Cuts, Record Receipts: New Hampshire Revenues Beat Projections

By Michael Graham, NH Journal

New Hampshire closed the first quarter of its fiscal year nearly $75 million ahead of revenue projections, fueled by record September business tax collections, a rebuttal to Democrats’ warnings that Republican tax cuts would leave the state short of cash.

Business tax collections were $269.8 million in September, more than $69 million above plan and higher than the previous September record of $226.4 million set in 2024. Total unrestricted revenue for the General and Education funds reached $398.9 million for the month — $69.1 million, or 21%, above plan.

Gov. Kelly Ayotte has supported tax cuts and opposed attempts to increase taxes and fees, including a proposal to raise tolls as part of the 10-year highway plan.

“New Hampshire’s economy remains strong, and these numbers show we’re moving in the right direction,” Ayotte said Monday. “We’ll keep our state a great place to start and run a small business by protecting the advantage that has led us to become the #1 state for economic opportunity. As we look ahead, we’re going to ensure we protect our most vulnerable citizens and build a brighter future for all of New Hampshire.”

Republican lawmakers under both Gov. Ayotte and Chris Sununu have reduced the business profits tax rate from 8.5% to 7.5% and the business enterprise tax rate from 0.75% to 0.55% since 2015.

“These results reflect strategic, thoughtful planning from Republican leadership and reinforce the importance of maintaining a stable environment where businesses can grow, create jobs, and families can thrive,” said Senate President Sharon Carson, R-Londonderry.

Democrats who opposed these tax cuts, beginning with then-Gov. Maggie Hassan and continuing to Democratic legislators today, predicted cutting these taxes would force the state to cut services and choke off revenue to local schools and communities.

In an attack on the GOP’s fiscal policy in June, House Minority Leader Alexis Simpson, D-Exeter, said, “Instead of funding public education and freezing college tuition, they spent millions on vouchers for the wealthy and tax cuts for out-of-state corporations.”

The ranking Democrat on the House Ways and Means Committee, Rep. Susan Almy, D-Lebanon, said last year that GOP business cuts were putting the state in a “crisis.”

“The legislature has been reducing state revenues by cutting business tax and other rates since 2016, and we have reached a crisis point.”

Instead, business tax collections have grown substantially since the cuts were enacted, and the latest report shows receipts beating both budget expectations and last year’s totals. The report also shows that transfers to the municipal revenue fund from the meals and rentals tax reached $43.9 million during the first quarter, up $1 million from the same period last year.

Those transfers offer a concrete counterpoint to claims that municipalities are receiving less money. Instead, state per-pupil funding of K-12 education is at an all-time high.

“Democrats never let things like silly facts get in the way of good fear-based political messaging to the masses,” said Sen. Tim Lang, R-Sanbornton, chair of the Ways and Means Committee, in response to the revenue numbers.

“Republican tax policies are delivering for the state of New Hampshire.”

The state’s report attributes September’s business tax increase to higher estimated, extension, and return payments, along with fewer refunds. Business tax refunds totaled $12.9 million for the quarter, down from $23.9 million a year earlier.

Other revenue sources also contributed. Real estate transfer tax collections reached $73.6 million, exceeding plan by $8.3 million and last year’s total by $11.9 million. Meals and rentals tax receipts, after municipal and school building aid debt service transfers, totaled $111.8 million, up $4.3 million from last year.

Not every revenue stream exceeded expectations. Liquor Commission transfers were $7.4 million below the first-quarter plan, while video lottery terminal receipts were $3 million short.

Still, the business tax surge more than offset those weaknesses, leaving the General Fund $54 million ahead of plan and the Education Fund $20.9 million ahead after three months.

These numbers also add to Ayotte’s “stay the course” argument for a second term in the corner office, as opposed to her opponent Cinde Warmington’s case for making a change.

With the November election approaching, Lang urged voters to keep Republicans in charge.

“Let’s keep this economic momentum moving forward this November.”

This story was originally published by the NH Journal, an online news publication dedicated to providing fair, unbiased reporting on, and analysis of, political news of interest to New Hampshire. For more stories from the NH Journal, visit NHJournal.com.