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 made by employers other than the state for these groups. The current law, which required employers to pay the full amount of contributions, will be amended to reflect this new arrangement. Additionally, the state will also cover both normal and accrued liability contributions for group II members employed by the state and for teachers.

The fiscal impact of this legislation is significant, as it shifts the financial responsibility from local 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 bill does not provide funding for these expenditures, which will need to be accounted for in the New Hampshire Retirement System's operating budget. Overall, the bill is designed to provide property tax relief while enhancing public education and safety through the support of retirement contributions for local educators and public safety personnel.