Heading into the 2025 legislative session, there was no shortage of grim predictions about the state budget. Policymakers on both sides of the aisle acknowledged they were bracing for what could be the most difficult budget season since the Great Recession. Governor Ayotte allayed those early concerns by offering an initial budget proposal that trimmed spending while seeking to minimize impacts to services and state agency operations. But when the New Hampshire House unveiled its proposed spending plan in March, slashing approximately $500 million compared to Governor Ayotte’s proposal, those early warnings of a grim budget cycle began to feel very real.

In a year where many expected only hard choices and harsh cuts, the Senate’s version of the budget offers a measured approach that balances limited resources with preserving key state investments and services that are important to maintaining New Hampshire’s economic competitiveness and quality of life. To be clear, the Senate budget is not perfect, no state budget is. But while the Senate’s budget comes in below many of the governor’s original funding goals, it succeeds in restoring balance by undoing many of the most harmful cuts proposed by the House. Most notably, the Senate budget rolled back deep cuts to higher education, Medicaid provider rates, and preserves funding for various state agencies, like the Housing Appeals Board and State Council for the Arts, that while small in size, deliver significant value in terms of impact on the economy and vitality of the state.

One of the clearest examples is in the restoration of funding for the University System of New Hampshire (USNH). The House had recommended a drastic reduction of over 30% to the university system’s budget. The Senate wisely restored much of that funding. The Senate proposal allocates $85 million per year to USNH, representing a 10% cut rather than a crippling 30% cut. In total the Senate budget delivers $67.5 million more than the House proposed over the two-year budget cycle.

The University System is a cornerstone of New Hampshire’s economy. It contributes nearly $1.9 billion annually to the local and state economy and supports more than 13,000 jobs. Perhaps more importantly, the system plays a critical role in talent development and retention. Employers across the state, in emerging sectors like advanced manufacturing and biotech and established sectors like finance, rely on partnerships with the University System to find the interns who become future employees, and help research new and cutting-edge technologies that will become the cornerstone of New Hampshire’s economy in the future.

The Senate’s budget also addresses another sector that’s deeply tied to economic growth – tourism. While the House added funding for the Division of Travel and Tourism back into its version of the budget after significant debate, the Senate didn’t just preserve that support, it went further. The Senate budget includes changes to how future allocations for tourism marketing will be calculated, likely boosting funding in years ahead. That’s good news for local businesses that depend on the flow of visitors to the Granite State, and for the state’s broader economic growth and competitiveness.

There is perhaps no bigger challenge to our state’s economy than the housing supply and affordability crisis. As mentioned above, the Senate’s move to restore the Housing Appeals Board, though with modifications, sends an important message that the state is serious about addressing the housing crisis. This board offers developers an alternative to a lengthy and expensive Superior Court process when appealing local land use decisions. In its relatively short lifespan, the Housing Appeals Board has proven to be effective public policy that provides a meaningful tool to help address New Hampshire’s pressing housing supply shortage.

Then there are the behind-the-scenes policy changes that don’t make headlines but could have long-term impacts on the state’s economy. On energy policy, the Senate’s inclusion of SB 106 changes the game for large energy users. By aligning the state’s self-generation rules with those already available to municipalities (allowing up to five megawatts of power generation instead of one) the Senate is paving the way for manufactures and large energy users to lower their energy costs and increase their competitiveness and ability to grow in New Hampshire.

On solid waste policy, the Senate refined the Governor’s proposal to give both public and private waste operators a clearer regulatory roadmap. In a state that wants to continue attracting and growing business, the Senate’s approach ensures that businesses know that there is a safe, and cost-effective way for businesses, municipalities, and consumers to dispose of their waste.

New Hampshire businesses want a state that’s affordable, opportunity-rich, and well-governed. The Senate’s budget proposal might not please everyone, but it delivers something rare in politics: a practical, forward-looking compromise that keeps the state’s long-term interests in view. It restores funding for key programs and investments and looks ahead strategically to ensure that our long-term economic foundations aren’t weakened. In a budget year when many expected only setbacks, that’s an important win worth noting.

Michael Skelton is president and CEO of the Business & Industry Association. Visit BIAofNH.com.