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New Hampshire Lawmakers Consider Permanent State Contributions to Retirement System for Municipal Employees to Reduce Property Taxes

New Hampshire lawmakers are considering a bill, House Bill 50, which would require the state to contribute 7.5% of teachers’ and “Group II” public employees’ retirement costs indefinitely. The bill aims to reduce financial burdens on towns and cities and potentially allow for lower local taxes. The proposal follows a previous one-time payment made by the state in 2022, which provided relief to several cities and towns but was a fraction of the previous contribution rate. Municipalities currently pay $30 for every $100 in compensation, and the increasing contributions have forced budget cuts, spending reductions, and tax increases. The bill had bipartisan support and passed the Republican-led House in 2022, but some lawmakers are opposed to the state’s contribution, arguing that municipalities have full authority over their payroll. The New Hampshire Municipal Association hopes the Senate will be receptive to a longer-term replacement and emphasizes that reinstating the contribution rate will result in direct tax savings for both taxpayers and municipal budgets.

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