State officials outline Business and Economic Affairs budget; tourism marketing and rest-area operations draw focus

Department of Business and Economic Affairs officials answered legislative questions Thursday about a biennial budget that would restore tourism marketing funds, reorganize planning and housing functions, and keep 12 highway rest areas open despite staffing and temporary-position constraints.

Committee members spent much of an hour on the agency's request for a larger marketing budget for travel and tourism that officials said is computed from the meals-and-rooms tax net and restored after a regulatory change. "It's typically 3.15% of the net of meals and rooms tax revenue," said Chase Hegeman, director of the division of economic development at the agency, describing the formula by which tourism promotion funds are derived. He told lawmakers the additional funds would be used for industry promotion, marketing and related programs.

The department also reviewed operations for 12 rest areas and welcome centers across the state, reporting a total foot count of about 5.8 million visitors in fiscal 2024. "There are 12 rest areas," Hegeman said, listing Hooksett, Seabrook and other sites. Officials said Seabrook remains open 24 hours and most welcome centers operate year-round though hours were shortened at some sites after budget changes; Sutton was noted as closed at the time of the presentation.

Budget questions addressed staffing across the agency. Kathy Frederickson, the agency's finance director, said several unclassified and program positions are currently vacant and some are expected to be funded in the 2026-27 biennium, including two "housing champions" positions authorized previously but not staffed in the current biennium. "Those positions were authorized in this current biennium, but they were not funded this biennium. We're looking to fund those two positions in 26-27," Frederickson said.

Lawmakers pressed officials on where general-fund increases would be directed. Hegeman said the proposed increases for economic development would support industry recruitment and support programs, while changes in how the travel-and-tourism formula is applied restored promotional capacity. "A lot of it would be put there so that it could be used for broader marketing campaigns," he said.

The department described several grant-driven programs overseen by the economic development division, including the APEX accelerator, the office of workforce opportunity (which the agency said manages roughly $14 million annually in federal training funds), and a capacity grant tied to the Northern Border Regional Commission. Officials said some federal grants require state match, including APEX, and that the agency's general-fund share is less than half of the total budget.

Lawmakers asked for follow-up detail on grant sources, timing for federally funded positions, and the department's vacancy list. Hegeman and Frederickson promised additional information on federal matches, position waivers for FEMA-eligible roles and program timelines.

Ending: Agency staff asked lawmakers to consider the long-term impacts of cutting promotional programs and to weigh timing for grant-funded builds such as broadband and housing initiatives that operate on multiyear federal drawdowns.