Capitol Insight: Weekly Legislative Update 2/6/26
To call it a busy week in Concord would be an understatement. The Governor and Executive Council convened an emergency meeting Wednesday afternoon to address their response to last week’s auto inspection court ruling, while also seeking answers about the fallout from what was characterized as mismanagement at the Department of Natural and Cultural Resources related to a potential ICE facility in Merrimack. At the same time, the House held its first legislative session taking up 2026 bills, the Senate met in full, and Governor Ayotte delivered her first State of the State address. This week was one for the record books.
State of the State is Strong
Governor Kelly Ayotte gave her first State of the State address to a joint session of the Legislature this week, rattling off a list of accomplishments New Hampshire has achieved under her administration and declaring that the state of the state is strong. She pointed to New Hampshire’s top national rankings from U.S. News, including first place for public safety, economic opportunity and child well-being, among others. Overall, the state ranked second in the nation behind Utah, prompting the Governor to quip that she was coming for their number one spot. Not looking to rest on her laurels, the Governor outlined initiatives she plans to champion including marketing the state as a hub of economic opportunity, protecting the New Hampshire Advantage and opposing all new taxes. A strong advocate of public safety, Governor
Ayotte pledged to improve highway safety and increase penalties for refusing DUI breathalyzer tests. Addressing the state’s ongoing energy cost challenges, the Governor called on the Public Utilities Commission to prioritize ratepayers and directed the Department of Energy to explore pathways towards next-generation nuclear power in New Hampshire. The Governor did not miss the opportunity to highlight the Rural Health Transformation initiative, the investment in workforce development and ongoing efforts to address childcare costs and the lack of affordable housing. While Governor Ayotte painted an optimistic picture, a small group of detractors gathered outside the State House ahead of the speech, holding signs opposing a potential ICE facility in Merrimack, open enrollment in public schools and tax cuts for out-of-state corporations. The state of the state may be strong, but it also depends on who you ask.
State Revenues Improve, Sort of
State revenues continue to be closely monitored by the Governor and Legislature amid a tighter budget environment presently than in the past decade. January revenue released this week came in $8.3 million above budget for the General and Education Funds but with an important caveat. A tax amnesty program authorized in last year’s budget generated $16.5 million in January, $14.4 million above expectations. These are one-time revenues that will dry up after the initiative ends later this month. While most of the state’s revenues were close to plan, business tax collections significantly underperformed, falling $19.2 million short. Although returns from the Meals and Rooms Tax also lagged behind, the gaps were offset by amnesty proceeds and a $28.2 million transfer from the Lottery Commission. Overall, revenues have rebounded from early fiscal year challenges and are now $44.2 million above plan. Business taxes, which account for the state’s largest revenue source, will continue to be closely monitored through the remainder of the fiscal year.
Childcare Tax Credit for Qualifying Businesses
After several years of adopting proposals to help assist the early childhood education industry, it is clear that there is no single answer to solving New Hampshire’s childcare shortage. Lawmakers have taken steps through zoning reforms, regulatory changes and appropriations. One proposal heard this week would establish a childcare tax credit against
the Business Profits Tax (BPT) for businesses that create new childcare seats or expand existing capacity by 12 or more spots. Qualifying businesses would be able to claim a credit equal to 50% of expenditures against the BPT. Supporters, including the Business and Industry Association and several regional chambers of commerce, argue this policy would help attract and retain young workers, meet growing childcare demand and potentially reduce costs over time. Granite State Taxpayers opposed the bill, expressing concern that the lack of a cap on annual credits available for the credit could significantly impact the state budget. Governor Kelly Ayotte has voiced strong support for the legislation and used her State of the State address to urge lawmakers to pass the bill. While the House Ways and Means Committee has not yet made a recommendation on the proposal, it is likely to consider adding a cap on the total available credit amount to gain sufficient support for passage.
House and Senate Vote on Firearms
Following the State of the State address, both chambers returned to their respective chambers to debate and vote on pending legislation. One issue was featured prominently in both bodies: firearms in schools. The House engaged in a lengthy and passionate debate over a bill that would allow students, faculty and visitors to carry firearms on college campuses in New Hampshire. Supporters argued the measure protects constitutional rights, while opponents warned it could increase the risk of injury and death. The House ultimately passed the bill largely along party lines. Similarly, the Senate once again rejected a perennial proposal that would prohibit teachers and visitors from carrying firearms in public schools. Although carrying firearms at public schools is federally prohibited, the law is not enforced at the state level. The bill, intended to change that approach, has been defeated repeatedly by Republican majorities.
Week Ahead
While temperatures remain frigid, House committees are feeling the heat as the Thursday deadline approaches to vote second committee bills out of policy committees. Many are also working to wrap up public hearings over the next two weeks, aiming to take the final week of February off for school vacation. The House will reconvene next Thursday, while the Senate will not hold a session next week.
About Rath, Young and Pignatelli
Capitol Insight is produced with the support of the Chamber’s government relations consultant: Rath, Young and Pignatelli (RYP). RYP merges traditional legal practice areas with legislative and public policy expertise. They have earned a reputation for achieving client success through skillful and creative advocacy in private party negotiations, before courts, regulatory agencies, and legislatures.
Their professionals are leaders in key sectors of the economy where business and government intersect including business and finance, energy, tax, health care, environmental, and insurance.
About The Greater Manchester Chamber
Incorporated in 1911, the Greater Manchester Chamber (GMC) is the largest business organization in New Hampshire, focusing its efforts primarily on Manchester and the surrounding communities of Auburn, Bedford, Candia, Derry, Goffstown, Hooksett, Litchfield, Londonderry, and Merrimack. It is the Chamber’s mission to bring together business and community to enhance economic success and quality of life in our region. For more information visit www.manchester-chamber.org.
