Democrats Float Using Rainy Day Fund to Cover Spending and Education Costs

CONCORD, NH — Leading New Hampshire Democrats suggested the state should tap into its Rainy Day Fund to pay for new spending initiatives and future education obligations, signaling a major policy shift away from the state’s traditionally cautious fiscal approach.

At a State House press event, Senate Democratic Leader Cindy Rosenwald of Nashua and House Deputy Democratic Leader Laura Telerski, also of Nashua, said the state’s reserves could help fund parts of their new “Fair Chance Agenda,” a platform that includes expansive state programs in housing, child care, and health care.

The proposal comes as Democrats face questions about how they would pay for the array of new initiatives unveiled under the plan. Both Rosenwald and Telerski said they would consider drawing from the Rainy Day Fund — the state’s main emergency reserve — to sustain new commitments and offset revenue shortfalls.

“That Rainy Day Fund exists for a reason,” said Sen. Rosenwald during the event. “We’re in the rainy season.”

Republican leaders have long viewed the fund as a safeguard against economic downturns or unexpected costs, warning that using it for ongoing programs would undermine the state’s fiscal stability.

Democrats also said they would explore rolling back or redirecting funds from existing tax cuts, including the Interest and Dividends Tax phase-out that took effect in 2024 and the Education Freedom Accounts program, which allows parents to use state aid for private schooling.

Rosenwald accused Republicans of “reckless budgeting,” saying their policies “raise costs and limit opportunities for working families.” Telerski added that the Democratic plan aims to “give Granite Staters a fair chance” by expanding state support in key sectors.

Among the initiatives Democrats highlighted:

• The Affordable Home Act, increasing state subsidies and incentives for developers and municipalities.

• The Lower the Cost of Health Care Act, reversing Medicaid cost-sharing reforms enacted under Governor Chris Sununu.

• The Child Care Relief Act, expanding taxpayer-funded child-care programs.

• The Lower Your Property Taxes Act, redirecting state dollars to local governments.

Fiscal Conservatives argue the plan would dramatically grow government spending while undermining the state’s competitive, low-tax reputation.

Republicans note that New Hampshire currently boasts among the lowest business tax rates and highest reserves in the region — the result, they say, of disciplined budgeting under GOP leadership.

While the Democratic proposals face little chance of passage with Republicans controlling the House, Senate, and Governor’s Office, the remarks made clear that the minority party intends to campaign in 2026 on using the Rainy Day Fund and other tax sources to finance a slate of new state programs — setting up a sharp fiscal contrast heading into the next election.