State-Mandated Budget Reductions Affect Health Programs, With Larger Cuts Likely Ahead: NHFPI

By Jessica Williams, Policy Analyst, NH FPI

CONCORD, NH — New Hampshire’s largest state agency has reduced funding for mental health services, public health programs, food assistance initiatives, and other health-related services after lawmakers required agencies to cut spending following passage of the current State Budget, according to a new analysis from the New Hampshire Fiscal Policy Institute.

Rather than identifying every reduction during the budget-writing process, lawmakers required several state agencies to implement “back-of-budget” reductions, mandating that agencies reduce overall spending after line-item appropriations had already been detailed in individual budget lines. This approach left agency officials to determine how to achieve the required savings and which programs would absorb the reductions. Because these decisions are made after the budget becomes law, they often receive less public attention despite potentially affecting programs and services that many Granite Staters rely on.

The new analysis, authored by NHFPI Senior Policy Analyst Jessica Williams, examines how the New Hampshire Department of Health and Human Services implemented its required $25.5 million reduction for the first year of the State Budget biennium.

Key findings from the analysis include:

• The Department of Health and Human Services is required to reduce General Fund spending by $51 million over the current two-year budget, representing the agency’s largest back-of-budget reduction in at least 30 years.
• More than $10 million in reductions affected programs that directly support Granite Staters, including mental health care, child and family services, public health initiatives, food assistance programs, and other health-related services.
• More than $3.1 million in reductions affected mental health services, including community mental health center contracts, services that help people transition home after psychiatric hospitalization, and homeless shelter programs.
• Nearly $2.9 million in reductions affected child and family support programs, including home visiting services for new parents, child abuse prevention initiatives, adoption supports, and peer mentoring programs that help families navigate the child welfare system.
• About $1.6 million in reductions affected maternal and child health and other public health programs,?while more than $2.1 million affected food assistance and economic stability initiatives, including Supplemental Nutrition Assistance Program employment and training services.
• While current participants are expected to continue receiving several of the impacted services, many of the reductions limited programs’ ability to expand or respond to increased demand from Granite Staters seeking assistance, and the report finds that larger impacts may be more likely this fiscal year because the State relied on one-time savings that are not expected to be available again for last year’s budget reductions.

Nearly 73 percent of this year’s savings came from one-time accounting adjustments that are not expected to be available again this fiscal year. The State Department of Health and Human Services has indicated those one-time savings are not expected to be available to help meet another required $25.5 million reduction during State Fiscal Year 2027.

“Many of this year’s reductions relied on one-time savings or limited programs’ ability to expand, which helped minimize immediate impacts on existing services,” said Jessica Williams, Senior Policy Analyst at the New Hampshire Fiscal Policy Institute and author of the report. “With those one-time savings largely exhausted, State officials will likely face much more consequential decisions as they work to meet the next round of required reductions, which could have broader impacts on programs that support the health and well-being of Granite Staters.”

The report also notes that the next round of required reductions will occur as New Hampshire prepares for significant federal policy changes that could increase both administrative responsibilities and financial pressures for both families receiving assistance and the New Hampshire Department of Health and Human Services itself. Together, those state and federal fiscal challenges could further strain the State’s ability to sustain key services in the years ahead.

“Many of the programs affected by these reductions are designed to help people before challenges become more serious or more costly,” said Williams. “As policymakers begin planning the next State Budget, understanding how funding decisions affect access to mental health care, family supports, public health programs, and food assistance will be critical to knowing what these budget choices mean for Granite Staters.”

The full report, State Curtails Funding for Health Services, with Larger Cuts Expected This Fiscal Year, is available at https://nhfpi.org/resource/state-curtails-funding-for-health-services-with-larger-cuts-expected-this-fiscal-year/.

About the New Hampshire Fiscal Policy Institute

The New Hampshire Fiscal Policy Institute is a nonpartisan, independent research organization that examines issues related to the state budget, the economy, policy decisions, and the financial security of Granite Staters, centering on issues relevant to people and families with low and moderate incomes. Learn more at www.nhfpi.org.

This story was originally published by InDepth NH.