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 group I teachers and group II members. Specifically, the bill stipulates that starting in the fiscal year 2026, the state will cover 7.5 percent of the contributions for these retirement system employers, while the employers themselves will be responsible for 92.5 percent. 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 has been modified to include the state's share.

The fiscal impact of this legislation is significant, as it is projected to shift approximately $28 million in expenditures from political subdivisions to the state in FY 2026, with incremental increases in subsequent years. The New Hampshire Retirement System has indicated that while this bill will not affect the overall amount of employer contributions, it will change the funding source, resulting in increased general fund expenditures and decreased costs for local governments. However, the bill does not provide any appropriations to cover these expenditures, which will need to be addressed in future budgets.