Department of Revenue defends RIMS operational costs and outlines unfunded positions after House budget

Lindsey Stepp, commissioner of the New Hampshire Department of Revenue Administration (DRA), told the Senate Finance Committee the department’s FY26–27 budget includes operating costs to sustain the Revenue Information Management System (RIMS) and that the House budget unfunds 18 currently vacant positions.

Stepp said RIMS — a multi‑year technology project implemented in August 2021 — requires ongoing software licensing, maintenance and cloud migration costs that were previously funded with capital appropriations. Those costs must be absorbed into the department’s operating budget beginning in FY26, she testified, and she provided annual estimated operating costs of $2.8 million for FY26 and $2.9 million for FY27.

Why it matters: RIMS is now producing measurable “revenue uplift” for the state by improving collections and taxpayer engagement, but the department’s headcount and service capacity depend on how the committee treats currently vacant positions the House left unfunded.

Key details and impacts

- RIMS operationalization: The department converted a $30,160,000 capital appropriation into ongoing operating costs as the system moves from on‑premise hardware to a cloud environment. Stepp said the department generated $31.1 million in revenue uplift between RIMS go‑live (Aug. 9, 2021) and the end of FY24; in FY24 alone the uplift was $14.5 million. The department may transfer up to $4 million a year from general fund uplift into an account to service RIMS debt.

- Unfunded positions: The House budget reduces the department’s funded headcount by 18 positions (from 153 to 129 funded positions) by unfunding vacancies rather than abolishing them. The unfunded roles include nine auditors, nine tax examiners, two administrators, two appraisers, one paralegal and one statistician. Stepp noted all the unfunded positions are currently vacant and that the department conducted a fine‑tooth‑comb review of discretionary spending.

- RIMS revenue mechanics and debt service: The agency income section includes debt service for the $24.16 million funded portion of RIMS, financed in part through revenue uplift. The department said that better reminder notices, improved use of federal tax information and automated online payment plans contributed to the uplift.

- Flood control and intergovernmental reimbursements: The department included assumptions that Massachusetts and Connecticut will reimburse their shares of flood‑control compact obligations; Stepp noted an outstanding $928,203 for FY24–25 related to compact payments and said prior settlements have produced some payments.

Quotes from the record

- “RIMS went live on August ninth of 2021… through the end of fiscal year '24, we have generated $31,100,000 in revenue uplift,” Stepp said.

- “We are a department of people,” she said, noting 70% of the general‑fund budget is salary and benefits.

What the department requested

Stepp urged the committee to consider language in House Bill 2 that would let agencies fill unfunded positions if total personnel expenditures remain within the approved appropriation; she said this flexibility would help reallocate staff funding to highest‑priority vacancies if recruitment makes positions difficult to fill.

Outstanding clarifications

Stepp said that while unfunded positions are currently vacant, recruitment and market competition for auditors and appraisers has historically been challenging. She told the committee the department will prioritize positions if allowed to reallocate funding under proposed HB2 flexibility.