Independent New Hampshire Journalism · Northfield, NH

Learn to Keep People Dependent on You

Greene says make them need you. New Hampshire wrote the need into its constitution, cut its own share of the bill to zero, and had the Supreme Court explain why the towns could not object.

On November 6, 1984, New Hampshire voters answered thirteen constitutional questions. Question 2 asked whether the state should be barred from handing cities and towns new or expanded responsibilities without paying for them. It passed, 237,210 to 99,609. Question 10 asked whether the retirement system’s assets should be held in trust and the contributions certified as owed to it appropriated every year. It passed too, 288,994 to 48,690. Both came out of the same convention that spring. One was a shield for the towns. The other turned out to be the lock.

Twenty-eight years later the state Supreme Court explained which one wins when they meet. The towns lost, three to one.

Robert Greene’s eleventh law is the one that keeps a courtier employed: make others depend on you for their prosperity, and never teach them enough to do without you. The more they need you, the freer you are.

In New Hampshire the state runs the pension every teacher, police officer and firefighter in every town must belong to, sets the benefits, sets what members pay, certifies what employers pay, and holds the only door. Then, in 2011, it stopped paying its share of the bill. The towns sued under the shield. The court read them the lock. That is the test case for Law 11, and the state passes it better than any law so far.

The rule

The architecture is in three places. The statute makes membership compulsory: anyone who becomes a teacher, a permanent police officer or a permanent firefighter joins the retirement system as a condition of employment. Its definition of employer sweeps in every school district, police department and fire department in the state, without asking them. A town or district may choose whether to enroll its clerks and road crews; it gets no choice about its teachers or its cops.

The second piece is the money. The Legislature sets what members pay: seven percent of salary for teachers and general employees, 11.55 percent for police, 11.80 percent for fire, all fixed by statute since July 1, 2011. The system’s trustees certify what employers pay every two years, with what the system’s own guidance calls “very limited discretion” to do anything but follow the actuary. The third piece is the constitution. Article 36-a says the certified employer contribution shall be appropriated every fiscal year, in full. A town cannot vote it down at town meeting. A school board cannot trim it. The bill arrives and the bill is paid.

There is a withdrawal section, RSA 100-A:43, and it matters for what it leaves out. It lets an employer pull out the employees it chose to enroll, on 120 days’ notice, with an actuary’s certificate and a check for its share of the unfunded liability. It reaches employers that “elected” to participate. Teachers, police and fire were never elected in. By Granite State Report’s reading of the chapter, no section lets them out.

Forty, thirty-five, zero

For most of the system’s life the state paid part of the local bill. When the chapter was enacted in 1967 the state took on 40 percent of the employer contribution for local teachers. In 1977 it cut that to 35 percent and extended the same 35 percent to police and fire. That held for thirty-two years: towns paid 65, Concord paid 35.

In 2009 the Legislature cut the share to 30 percent for fiscal 2010 and 25 percent for fiscal 2011, and wrote into the same law a promise that it would go back to 35 in fiscal 2012. Concord, Belknap County and the Mascenic Regional School District sued in 2010 on behalf of similarly situated municipalities, counties and school districts. Their claim was Question 2: an unfunded mandate.

Before the case was decided, the 2011 budget trailer bill erased the promise. The state’s share went to zero, replaced by a single $3.5 million appropriation for fiscal 2012, and the statute was rewritten to say that from fiscal 2013 on, any employer pays the full amount. By the New Hampshire Municipal Association’s arithmetic, the local share went from 65 cents on the dollar to a dollar, a 54 percent increase in one budget.

What the court said

The Supreme Court ruled on August 31, 2012. Justice Lynn wrote for the majority, joined by Chief Justice Dalianis and Justice Hicks; Justice Conboy dissented. The towns had argued that the mandate clause means what it says: the state cannot hand them a bigger bill for a program they are required to run. The court found the clause’s edge. A “responsibility,” the majority held, has to be a change to something the town does, not to what the town spends. Cutting the state’s share of the pension bill changed no duty. It added no employees and altered no benefit. It shifted money, and shifting money is not a mandate.

The opinion then said the quiet part. If Article 28-a stopped the Legislature from adjusting or ending its contribution, the majority wrote, “the State would effectively be at the mercy of local governments” over its own budget, since towns decide how many teachers and officers they hire and what they pay them. The dependency is supposed to run one way. The court did leave a warning in its last paragraph: this should not be read to let the state invent a new program, fund it for a while, and shove the cost downhill later. The pension predates the shield, so the shield does not cover it.

Two years later the same court closed the other door. Police and fire unions had challenged the 2011 increase in member contributions as a broken contract. In December 2014 the court held that nothing in the statute showed the Legislature meant to bind itself against raising what members pay. Employers cannot refuse the bill. Members cannot hold the Legislature to the last one. Everybody in the system depends on Concord, and Concord depends on no one.

Why the number kept climbing

The rate the towns now pay alone is not the rate they once split. In 1993 a school district paid 2.79 percent of teacher payroll to the system, and the state covered 35 percent of that. In fiscal 2022 and 2023 the district paid 21.02 percent, all of it, less a one-time 7.5 percent rebate on the first of those two years. A police department went from 5.07 percent to 33.88. A fire department from 10.20 to 32.99. The rates have eased since and will fall again in fiscal 2028, to 18.26, 26.71 and 24.63, on five good investment years. They are still six to seven times what they were when the state paid a third.

The retirement system is direct about where the increase came from. More than three quarters of the employer rate is not the cost of the pensions being earned this year. It is the cost of the hole: $5.20 billion of unfunded liability as of June 30, 2025, against a $13.4 billion trust, a system 71.6 percent funded. The system lists two main causes. A statutory funding method in force from 1991 to 2007 that understated employer contributions for sixteen years. And roughly $900 million in investment earnings diverted from the pension trust into a “Special Account” that paid for cost-of-living adjustments and other extras, under a law written in the 1980s and repealed in 2012.

Both were state decisions, made in the statute the Legislature controls. The bill for both is being paid down through 2039, and the system says the employers carry the unfunded liability alone. Since 2011, for teachers, police and fire, that means the towns and districts, with no state share at all. Greene’s courtier makes himself indispensable and then sends the invoice. Concord made the system indispensable, underfunded it by statute for sixteen years, and sent the towns the whole invoice for the repair.

The annual ritual

Every year since 2022 a bill has been filed to restore a state share, and every year it has cleared a floor vote and then been tabled, studied or retained before it could become law.

In 2022, House Bill 1417 would have put the state in for 7.5 percent. The House passed it 186 to 159 on March 31. On April 28 the Senate voted 22 to 2 that it ought to pass and 14 to 10 to lay it on the table, and there it stayed. What passed instead was House Bill 1221, signed June 17, 2022: a one-time reimbursement of 7.5 percent of what local employers had paid in fiscal 2022, never to recur.

In 2023, Senate Bill 114, the same 7.5 percent, passed the Senate on February 9 and was tabled by voice vote the same day. In 2024, House Bill 1279 survived a motion to kill it, 178 to 194, and passed the House on a voice vote on March 28; Senate Finance voted 6 to 1 to send it to interim study, which is where bills go to be forgotten. In 2025, Senate Bill 20 passed the Senate 23 to 0 on January 30 and was tabled by voice vote in the same sitting. Its House twin, House Bill 197, called itself the “Property Tax Relief Act of 2025” and said in its first section that it “renews a promise made by state to municipalities.” House Finance retained it on March 4 and that was the end of it.

The price of the promise is on the record. The Legislative Budget Assistant’s fiscal note on HB 197 put the state’s cost of a 7.5 percent share at $28.00 million in fiscal 2026. Scale that to the old 35 percent and the figure is roughly $130 million a year, by Granite State Report’s arithmetic: what the towns were once promised, and what their property taxpayers carry instead. Rep. Ken Weyler of Kingston called the 2022 version a “false promise.” He was right about the word and wrong about which side of the deal it describes.

Generosity, with a string

The state did find money for the system in 2025. It did not go to the towns. House Bill 282, folded into the June budget deal and signed June 27, 2025, restored some of the benefits the 2011 law had taken from police and firefighters in service by July 2011 but not vested by January 2012: retirement at 45 with 20 years, a 2.5 percent multiplier on every year, holiday and vacation payouts counted as compensation. The state appropriated $14.5 million for fiscal 2026 and says it will appropriate $27.5 million a year through fiscal 2034. From fiscal 2028 it will pay the slice of the local police and fire rate the new benefits create: 2.27 percent of police payroll, 1.65 percent of fire payroll. The published local rates already assume the state keeps paying.

Read it as Greene would. The gift went to the members, who vote and organize. The towns still pay the base rate on every officer and firefighter, now with a richer benefit underneath it. And the string is visible: the appropriation is a line in each biennial budget, and the Municipal Association’s own summary says “only the $42 million in the current budget cycle is guaranteed.” The state has done this before. It wrote 35 percent into statute in 1977, wrote a restoration into statute in 2009, and wrote both out in 2011. A court has said it may.

The verdict

A courtier’s trick is to be needed. The state’s is better: it does not have to be needed, because the need is written into the constitution, enforced by the courts and renewed every session by a Senate that votes for the promise and then tables it. The towns cannot leave or refuse the bill, and they cannot hold the state to the share it wrote into its own statute, because the court has said a share is not a responsibility.

Eleven laws in, this is the one Concord follows best, and it follows it without effort. That is the point of the law. Dependency that has to be maintained is work. Dependency in Part First, Article 36-a is a line item.

Next: Law 12, on selective honesty, tested against the list of police officers with credibility problems that the state kept secret for years and then published in part.

Fact check

Editor’s note: Commentary and analysis, not legal advice. No individual is accused of wrongdoing. The reading of RSA 100-A:43 as offering no withdrawal path for teachers, police and fire members is Granite State Report’s reading of the statute’s text and is marked as such in the fact check; the $130 million figure is GSR arithmetic from a state fiscal note and is approximate. The GSR Power Index is editorial, not data. Granite State Report did not request comment from the New Hampshire Retirement System, the N.H. Municipal Association, or the sponsors of the bills named for this piece; any of them may write to the address above and a response will be added with its date.