4 Thoughts About the New State Budget
Also: My conversations with two 2026 candidates coming next week!
Before getting into today’s piece, a couple of upcoming programming notes:
Next Thursday, July 3rd, at 12:30pm, I’ll be hosting the latest edition of my Substack Live program with the latest announced Democratic candidate for New Hampshire’s open 1st congressional district seat, Carleigh Beriont. Beriont, who is a Hampton Selectwoman, had a strong appearance on WMUR’s CloseUp with Adam Sexton last weekend, and I’m really pleased that she’ll be joining me for this live program. If you already a subscriber to my Substack, you should receive reminders and alerts leading up to July 3rd, as well as a notification or email when we go live. You’ll be able to ask questions or comment during the program - I hope you’ll join us!
Early next week, I’m excited to be sitting down with 2026 independent candidate for Governor Jon Kiper for my next episode of The Steve Marchand Podcast. Kiper, who exceeded expectations in his 2024 gubernatorial run as a Democrat, was the subject of a pair of pieces I wrote last week. We’ll record on Monday, and I expect the podcast to be available late on Monday or first thing Tuesday morning. It will be available on iTunes, Spotify, and YouTube.
Yesterday, the State House and Senate passed a two-year budget by the narrowest of margins, and Governor Ayotte said she will sign it. Actually, that is understating how tight its passage was; after the State Senate passed it uneventfully (the GOP controls the Senate by a commanding 16-8 margin), the NH House actually failed to pass it on the first go-around, 182-183. Republicans (counting the one Independant who is a conservative) had a 205-161 advantage among those actually in attendance, but 23 of them voted against the budget, seeing it as insufficiently frugal.
The GOP was able to get another crack at it, though, and after convincing a handful of their colleagues to flip to “yes”, it passed 185-180. A necessary, related vote (called HB2) passed by a single vote, and it is waiting to be signed by the Governor either today or on Monday.
There’s plenty of reporting on yesterday’s happening available, but here are a handful of takeaways I had from the budget process, the budget itself, and what it may mean politically as everybody breaks for the summer:
1) This budget is the ultimate manifestation of the mantra, “Elections have consequences”.
Let’s start with the obvious: Ever since last November, when the GOP expanded their Senate majority from 14-10 to 16-8, and their razor-thin House majority from 202-198 to 222-178, it was clear that New Hampshire Democrats were going to be in a legislatively defensive posture for the next two years.
It is also the case that the most electorally-consequential part of the two year term for legislators is in the books. Obviously, there will be many more votes in 2026 (likely over 1,000 bills will be filed for next year’s session alone!), but everything that is included in the two budget-related bills passed yesterday (HB1 and HB2) is now on the record. They were roll call votes - we know how each member voted (or if they voted, as more than 25 legislators were absent yesterday), and every political ad involving an incumbent from either party in 2026 can now include a whole slew of statements about the consequences of their vote on June 26, 2025. “Democrats opposed eliminating annual auto inspections!” and “Republicans put an income tax on poor people accessing Medicaid!” are likely coming to a mailbox near you at some point in 2026.
All of this, though, underscores probably the most common statement I make at the dozens of event I’ve hosted or lead so far this year (including one last night in Wolfeboro): If Democrats don’t win more elections, it doesn’t matter if we think we’re right. Everything Democrats think about at the state and national level should focus on winning more elections. At the state level, Democrats have failed at this for most of the last decade. On days like yesterday, when all we could do is hope the GOP was unable to keep its own house in order (pun intended), the price was paid.
2) It was very much a party-line vote - which is increasingly unsurprising.
It is often noted at the national level that a decreasing number of congressional seats are considered truly competitive, for several reasons:
Gerrymandering has drawn an increasing number of districts that are safe for one party or the other.
There are very few conservative Democrats or liberal Republicans left nationally, as the parties have largely sorted out any ideological impurities, which makes it difficult to find politicians whose personal “brand” can supersede partisan trends going against them. (Rep. Jared Golden on ME-2 is one of the few Democrats nationally who fit that description.)
Congressional and Senate races have become nationalized - there are a handful of U.S. senators left, for example, from states where the presidential results has gone to the opposite party of the senators in that state. (For example, Sen. Joe Manchin of West Virginia was able to survive despite Republicans winning the presidential elections there going back 25+ years, but as soon as he retired - it easily flipped to the GOP. When Sen. Susan Collins retires, her seats will likely become a Democratic flip, probably comfortably so.)
The same thing is increasingly happening at the state legislative level. It is impossible for younger or newer New Hampshire Democratic activists to believe this, but when I started in state politics in the early 2000s, there were Democratic state representatives in blue districts who were publicly pro-life legislators. Today, if a Democratic downballot candidate opposed codifying abortion rights into state law, they would probably lose a primary.
In the late 1990s, there were prominent Republicans who were co-sponsoring a state income tax. Today, if a Republican downballot candidate proposed reinstating the recently-eliminated Interest & Dividends tax, they would almost certainly lose their primary.
While there are dozens of House seats, and a good half-dozen Senate seats, that are very much in play in 2026, it is not because there are scores of liberal Republicans competing in blue districts, or conservative Democrats running in red districts. The determining factors on who will win those purple seats are the quality of the candidates and the campaigns they run, as well as the competitiveness of the gubernatorial race next year. Each House and Senate race should be treated as its own micro-environment, but not because the R and the D are likely to be terribly provocative on policy. It will be personal characteristics, quality of campaign run, the political environment, and the emotional resonance of the candidates’ messages.
3) The pressure on GOP legislators comes from their right, not the center.
When I say it was a party-line vote, that is actually not completely accurate - even in the final successful vote, there were still 18 Republicans and one conservative-minded independent who opposed the final budget. I’ll have a separate piece about them shortly, but suffice it to say, none of them opposed the budget because they thought the Democratic position - that this budget was unnecessarily draconian - was right. All 19 “no” votes were from the right, that the budget spent too much.
If you look at the districts they represent, with a few possible exceptions, they are deep red, with little risk of political consequence to be paid, even in a Democratic wave year. In fact, a number of them likely felt that if they supported this budget, they faced the possibility of a primary next year, and would be vulnerable in a low-turnout GOP primary of getting ousted by a libertarian or Free State insurgent.
On the Democratic side, there was no such pressure this year, because the GOP had full control. Only one House Democrat voted for the budget (HB1) in the first try, Claremont Rep. Dale Girard (who is also the city’s mayor). Girard voted against the budget in the second try (the one that passed), and it would seem unlikely that the vote would hurt him in 2026. He was the top vote getter in his three-seat district in 2024, is a popular local elected official, and represents one of the most purple districts in the state. If somebody was to primary him from his left, that insurgent would be much more likely to unwittingly pick off one of the other Democratic House candidates than Girard, anyway.
Frankly, Democrats should probably worry more about trying to regain the third seat from that district (narrowly won by Republican Wayne Hemingway last year) than primarying a Democratic incumbent who ultimately voted against the final budget.
4) Democrats need to talk about the ways this budget hurts everybody, but with examples that are specific to you.
I’ve spent time on this in previous columns, but there is one issue nationally where an issue is both a top-five priority to most Americans, and where Democrats have the “trust advantage” with voters: Health care.
(To be clear, there are issues where Dems have the trust advantage, but the issue is simply not important to most voters, like abortion rights; and issues that are top-tier for voters, but where the GOP has the trust advantage, like inflation.) But health care is currently our best issue that people really care about.
House Democrats have done a nice job of focusing on the threats to Medicaid posed by this budget. Families relying on Medicaid to afford even basic health care will now, in many cases, be expected to pay premiums based on their income levels (starting at strikingly low income levels).
The key for Democrats between now and Election Day 2026 on this issue is to expand the discussion of Medicaid from an issue that impacts “other people, but not me” to a health care and economic issue that impacts virtually everybody.
The percentage of people in each community that are enrolled in Medicaid varies widely, as you might expect. In wealthy towns like Hanover (2% of residents, on average, are enrolled in Medicaid) and Durham (3%), the impact of these changes to Medicaid will be felt in a theoretical way to voters, more than at the kitchen table. Also, most of the towns with the lowest percentages are Democratic-leaning, because of the changing base of the Democratic Party to a higher-income, higher-educational attainment base.
But some of the most competitive House and Senate districts in 2026 also have some of the highest percentages of Medicaid enrollment. For example, State Senate District 1 is the northernmost district in NH. About half of it is Coos County, and the other half is northern Grafton County, and it is about an R+4.6 district. If it is a big Democratic year in 2026, it would be interesting politically.
In Berlin, 30% of the population is enrolled in Medicaid. In Stratford, it’s 40%. In Littleton and Lancaster, it’s about 26% each. These are big numbers.
Now, it is also true that generally, as you move down the income ladder, voter participation rates decrease, especially in non-presidential years like 2026. It is also true that Republicans are increasingly relying on lower-engagement voters to win elections, as the party’s base becomes increasingly blue-collar.
In many of the towns and districts where Medicaid enrollment rates are highest, the political battle is for blue-collar voters. Democrats used to dominate with the working class, but have lost them. Republicans are gaining the working class, but it is a tenuous relationship. In other words, in many ways, this is the political battlefield.
Can Democrats build a working-class agenda in New Hampshire that includes understanding the importance of affordable health care on our families and small businesses? Can Republicans build such an agenda by including their support of elimination of annual auto inspections (which do disproportionately hit lower-income households)?
As somebody who professionally helps Democrats build policy and messaging, I see several authentic opportunities from this budget to make a compelling argument for both working-class households and suburban households to target messaging on a town-by-town, district-by-district basis. But I also see some opportunities for the GOP, too.
Starting now, it will be a competition to see which party can take the components of this budget, and its related policies, and build a narrative that simultaneously communicates that its impacts affect everybody, while also telling the story about how it specifically impacts you. While you are enjoying our beautiful New Hampshire summer, just know: Today is the beginning of 2026.