At a presentation sponsored the Francestown Recreation Department Wednesday night, Phil Sletten, research director for the nonprofit NH Fiscal Policy Institute, outlined the causes behind the rise of the cost of living in New Hamphire. Sletten created the presentation, “Changes in the Cost of Living in New Hampshire Over Time,” at the request of the Francestown Recreation Committee.
“The interesting thing is it is not what people think,” he said. “People think the cost of groceries and gas are the biggest factors in cost of living, but when we look at the numbers, what’s really affecting people’s bottom line the most are the increases in housing costs, daycare and healthcare.”
Sletten brought copies of recent reports from the NHFPI that look at changes in the core costs of living. All reports are available at nhfpi.org/latest-research-analysis/.
“We looked at five key areas which we could trace over time and track that data over 20 years to see how the cost of living has changed in New Hampshire,” Sletten said.
The NHFPI used the example of a four-person family with two young children and tracked mortgage payments, daycare, food, healthcare, and gasoline costs, comparing costs over time.
“What we found was that the biggest change in costs during that time was housing,” he said. “Housing was a big swing in cost.”
According to the institute, the average total yearly payments for a median-priced home rose from $36,285 in 2005 to $47, 249 in 2024.
Daycare costs also outpaced inflation, and costs for adults requiring skilled nursing or residential care also went up. Food costs have risen higher than inflation in the past 10 years, while the cost of gas has been “volatile,” with prices peaking in 2005.
Sletten said that the legislature’s reduction or elimination of some New Hampshire revenue sources has been a factor in the higher cost of living. The state’s interest and dividend tax, which represented $184.6 million of the General Fund the previous year, was repealed in January 2025.
Cuts in federal funding to New Hampshire are also a significant factor, according to the NHFPI, with one in three dollars for state services coming from the federal government.
New expenses to the state in 2025 include the cost of court cases and settlements in the Youth Development Center sexual abuse lawsuit. The state is also building a new men’s prison at the cost of up to $600 million. The recent ConVal school funding judgment by the State Supreme Court, which ruled the state must nearly double per-pupil payments to public school students but did not give the state a deadline of when this should happen, is an unknown factor in the state’s budget.
Sletten also presented data on the expenditures and revenue for the state of New Hampshire.
“Can anyone guess what category of appropriations takes up the highest percentage of the New Hampshire budget?” Sletten asked the audience.
No one correctly guessed the answer, which is Health and Human Social Services, at 44% of the state budget. According to the state Department of Health and Human Services, the largest expenses in its budget are Medicare, children and family services, public health, mental health services, and services for adults and aging.
This year’s state budget adds premiums for some Medicaid enrollees, including Granite Advantage enrollees and Children’s Health Insurance Programs with certain income levels, and increases copayments for prescription drugs for Medicaid enrollees, pending federal approval of these changes.
Additions to the state budget include increased funding for homelessness and housing support services, and increased assistance for temporary assistance to needy families.
Education is the second largest expenditure in the state budget at $3.54 billion, or 22%. Significant reductions in the state budget this year compared to last year include reduced funding for the University System of New Hampshire by $35 million (17.6%), which places New Hampshire last in the nation for higher education funding.
New Hampshire is also ranked 50th in state funding for public schools. The amount the state pays per student, $4,629, is the lowest in the country, with the remainder made up by revenue from individual property owners.
This year’s state budget also reduced funding for the Office of the Child Advocate, the State Commission on Aging, the Human Rights Commission, the State’s Division of the Arts, and the Housing Appeals Board.
Special education funding for schools was increased by 47.2%. Funding for charter schools. based on enrollment, was also increased. The legislature also eliminated the income limit for families applying for Education Freedom Accounts, with an added a provision allowing for a partial cap on enrollment if it had not been raised for two consecutive years.
The Fiscal Policy Institute is a nonpartisan, independent research nonprofit that examines issues related to the state budget, economy, policy decisions, and the financial security of Granite Staters.
For more information go to nhfpi.org.