By Rep. David Preece

New Hampshire doesn’t raise broad-based taxes. It doesn’t run deficits. It balances its budget—every time.

That’s the story.

But behind that story is a quieter one. A more complicated one. And one that deserves far more scrutiny than it’s getting.

Two recent documents—one from the New Hampshire Office of the Legislative Budget Assistant and another from the office of Kelly Ayotte—reveal a pattern that raises serious questions about how the state is actually funding its operations.

In a detailed email, Budget Officer Melissa A. Rollins outlined a series of transfers from dedicated funds into the General Fund. Approximately $20 million was moved from the Renewable Energy Fund. Another $1.25 million came from the Payment and Procurement Card Fund.

But those are just the opening moves.

The current state budget requires the Governor to generate $16 million per year—not through new revenue, but through a mix of dedicated fund transfers, lapses, assessments, or “other methods.” It’s a flexible mandate. And flexibility, in budgeting, often comes at the expense of transparency.

The Governor’s December 31, 2025 report shows how that mandate is being met. Nearly $13.9 million was drawn from six separate dedicated funds, including:

• $7 million from the Revenue Information Management Fund
• $3.4 million from the Energy Efficiency Fund
• $1.5 million from the Body-Worn Camera Fund
• $1 million from the Animal Population Control Fund

These are not idle accounts. They are funds created by law for specific public purposes—modernizing state systems, improving energy efficiency, supporting law enforcement accountability, and protecting public health.

The justification? The money was “unused,” and the transfers would not “significantly impact” operations.

That claim deserves closer examination.

What defines “unused”?
Is it surplus beyond immediate need—or money set aside for future obligations, projects, or contingencies?

There is a difference. And that difference matters.

Because when dedicated funds are routinely tapped to support the General Fund, their purpose begins to erode. Programs that appear stable today may face constraints tomorrow—not because they were overfunded, but because their reserves were quietly redirected.

Then there is the issue of predictability.

The budget assumed $1.6 million from the Governor’s Scholarship Fund. The actual transfer was $3.7 million—creating an unexpected $2.1 million cushion.

That’s not a rounding error. That’s a significant variance—and it highlights a broader concern: the state is relying, at least in part, on unpredictable, one-time revenue to meet an ongoing annual requirement.

This is where the story shifts from accounting to policy.

Chapter 141, Laws of 2025 allows this approach. It gives the Governor broad authority to meet the $16 million target using a range of tools. The law is being followed.

But the design of the law matters.

The Legislature set a number. The executive branch determines how to meet it—after the budget is passed. That means the public, and even many lawmakers, don’t know which funds will be used until after the fact.

That is not how transparent budgeting is supposed to work.

It also raises a deeper question: is this a one-time solution, or the beginning of a pattern?

If these transfers continue year after year, the state will become increasingly dependent on a shrinking pool of “available” balances. At some point, those balances will no longer be sufficient.

And then what?

Will programs be cut?
Will new revenue be required?
Or will the state continue searching for the next fund to tap?

None of those answers are in the report.

What is clear is this: New Hampshire is balancing its budget, but it is doing so in a way that shifts costs, obscures trade-offs, and concentrates decision-making power.

That may be efficient. It may even be necessary in the short term.

But it is not transparent. And it is not sustainable.

The state’s finances are not just a set of numbers. They are a reflection of priorities—of what we fund, what we defer, and what we quietly move out of sight.

Right now, too much of that movement is happening offstage.

And when budgeting moves into the shadows, accountability tends to follow.

David Preece