Budget committee of conference reaches compromise on major items including retirement funding, corrections and VLT split

CONCORD, N.H. — Conferees for House Bill 1 and House Bill 2 reached a negotiated agreement June 17 on a wide-ranging state budget package, resolving several high-profile disputes over retirement funding, agency restorations and how to handle new revenue streams such as video lottery terminal (VLT) receipts.

The Committee of Conference adopted a package of technical and policy compromises intended to leave the biennial budget balanced while protecting municipalities from bearing the initial costs of a retirement benefit change. Among the largest items, conferees added a multi‑biennium plan of direct appropriations tied to retirement funding and accepted language intended to prevent the state from shifting those costs to local governments.

Why it matters: The committee’s decisions affect pension contributions, agency budgets across state government and how newly identified revenue (including VLT and renewable energy fund receipts) will be treated. Those choices will influence tax and program decisions for the next biennium and set the outline for follow‑up legislation.

What conferees agreed to and why

- Retirement funding and municipal protections: Conferees accepted an amendment that provides recurring appropriations to the retirement system over multiple future biennia and includes a policy protection so that any increase in the normal‑cost contribution attributable to the retirement changes will not be shifted to municipalities without further legislative action. Mark Kavanaugh, deputy counsel and compliance officer for the retirement system, warned conferees in the meeting that “if you were to cut the budget, that money stays in the trust constitutionally,” arguing the system needed funding to implement deferred IT and investment projects and that appropriations affect actuarial assumptions.

- Multi‑biennium appropriations: The committee agreed to add recurring appropriations of $30 million per biennium for a defined period (four future biennia was discussed in the meeting) to smooth actuarial assumptions and reduce rate pressure in future employer contributions. The conferees instructed legislative budget staff to capture the exact schedule in the final draft.

- Protections for…