The proposed bill, known as the "Property Tax Relief Act of 2025," aims to alleviate the financial burden on municipalities by reinstating the state's contribution to retirement system costs for teachers, firefighters, and local police. Specifically, the bill stipulates that starting in the fiscal year 2026, the state will cover 7.5 percent of the contributions made by employers other than the state for group I teachers and group II members. This change is reflected in the amendments to RSA 100-A:16, where the previous requirement for employers to pay the full amount of contributions is replaced with a new structure where the state will contribute 7.5 percent, while employers will pay 92.5 percent.

The fiscal impact of this legislation is significant, as it shifts the financial responsibility from political subdivisions to the state, resulting in an estimated increase in general fund expenditures of $28 million in FY 2026, with incremental increases in subsequent years. The New Hampshire Retirement System has indicated that while this bill alters the funding source for employer contributions, it does not affect the overall amount due to the retirement system. The bill does not provide specific funding for the increased expenditures, which will need to be addressed in future budgets.