In State of the State, Ayotte touts first-year policy wins, takes shots at other New England states

Gov. Kelly Ayotte delivers her first State of the State address to the Legislature, Feb. 5, 2026. (Photo by William Skipworth/New Hampshire Bulletin)

Gov. Kelly Ayotte had a list to rattle off.

Facing state lawmakers for her first “State of the State” address Thursday, one year after taking office, the Republican governor trotted out a litany of checked-off policy goals. Last year, she signed a package of pro-housing zoning bills; rolled back a bail reform law she had campaigned against; rushed through a law to ban sanctuary cities; secured a ban on cell phones in classrooms; and welcomed federal funding to help support a broad rural health program in the North Country. 

And she helped pass a budget that overcame an abnormally dire revenue picture, while holding back larger cuts from the fiscally conservative wing of her party.

The first-year policy victories, which came with the help of a Republican-led House and Senate, padded out a 46-minute speech. “Leading is in our blood,” Ayotte said. “It’s who we are. And over the past year we have worked to deliver on the promises we made to make our state even stronger,” she said.

But they also came ahead of a year that could test that leadership. Affordability issues still dominate Granite Staters’ concerns, the state’s housing and child care crises persist, and policies by President Donald Trump — from immigration to Canadian tariffs — have buffeted the state and emboldened Democrats. 

“We heard a different picture from the governor than I think a lot of Granite Staters are experiencing day to day,” said Sen. Rebecca Perkins Kwoka, the Senate minority leader and a Portsmouth Democrat, in a press conference following the speech. 

Ayotte proposed a new list of goals for 2026 on Thursday. She pledged to direct the Department of Energy to “build pathways” for more nuclear power in the state; push the Public Utilities Commission to provide transparency about electric rates; direct the Department of Education to study improving literacy and math scores; use new federal funds to build out rural health care workforce; and approve a rest stop system on Interstate 95 with local rather than national vendors. 

She also called for new laws to maintain a moratorium on new landfills in the state; to double the license suspension penalty for drivers who refuse breathalyzer tests; to create tax credits for businesses that provide child care; and to ease the transfer of credits from community colleges to universities.

But much of the speech was designed to defend her tenure and reclaim the economic narrative. Ayotte sought to paint the state as an economic beacon, one that stands in contrast to Democratic-dominated New England states, such as Massachusetts, Rhode Island, and Connecticut. 

And she spoke against a series of policies taken by Democratic states. 

“What we didn’t do is raise taxes,” Ayotte said. “We are the envy of New England and a beacon of good governance nationwide because we have not succumbed to the lie that more money for government is better.” 

The governor’s speech came in a year when Republican lawmakers in the House and Senate have put forward a number of bills that could transform portions of the state, from allowing universal open enrollment for all public schools in the state to expanding exceptions to childhood vaccine requirements, to mandatory property tax caps.

Yet in her speech, Ayotte portrayed a more positive picture of the systems as they exist now. She praised teachers, touted the state’s hospitals and community mental health centers, and hailed New Hampshire businesses and housing developers. She pointed to a list of national rankings, many from fiscal conservative advocacy organizations, that have put New Hampshire as number one for “economic freedom,” “child wellbeing,” “public safety,” and “home internet connectivity.” 

A push for more child care

The governor devoted a portion of the speech to the need for more affordable child care. She mentioned victories in expanding eligibility of the child care scholarship program and reducing administrative burdens for parents during the application process. She said that the continuing high costs of early education are a “downward pressure” on New Hampshire families. 

And she endorsed the creation of a tax credit for companies co-locating child care facilities. A bill that would give a tax credit to businesses that create or expand the state’s licensed child care capacity is currently making its way through the Legislature.

“I know this burden for so many leads to some very tough conversations around the dinner table, where parents are talking about the value of a parent working versus whether they can afford child care, and comparing the costs,” she said. “As a state, we are looking at ways to ease this burden.” 

Disavowing renewables, embracing nuclear

New Hampshire’s electricity rates, which rank among the highest in the country, were another focus on Thursday. Ayotte attributed the burden on New Hampshire ratepayers to two sources: ineffective leadership at the Public Utilities Commission, for which she released her nomination for a new chair last week, and neighboring states’ climate goals and policies.

“Our neighbors, that govern a lot differently than we do, are busy pushing up regional rates with their net zero religion and lack of pragmatism and focus on the consumer,” she said. 

In a New Hampshire Democratic Party press conference following the speech, Sen. Perkins Kwoka, of Portsmouth, said this was misleading.

“The governor showed a pretty fundamental misunderstanding of how the energy market works,” she said, adding that narrowing the energy market by limiting renewable adoption would increase costs. Studies have demonstrated that distributed generation, like wind and solar, can lower the net cost of energy for consumers. 

Ayotte blamed neighboring states for stalling energy projects she said would lower costs for New Hampshire consumers, highlighting the proposed Constitution natural gas pipeline through New York, which that state’s regulators have opposed. Experts said last year the pipeline would not make a significant difference to gas availability in New England.

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She pointed to nuclear energy as the energy solution of the future, announcing during her address a new consortium of “stakeholders, lawmakers, and organizations focused on nuclear generation” to find a path for New Hampshire to expand nuclear generation, led by the Department of Energy.

A stance against new landfills

After praising New Hampshire’s natural beauty, Ayotte renewed a call to the Legislature to impose a moratorium on new landfills in the state and charter a stakeholder-informed site evaluation committee, two measures she previously endorsed in her budgetary address in June. 

The Senate and House have struggled to come to a consensus on either issue, with proposals passing back and forth with significant amendments between the chambers and a recent settlement over environmental violations at a large Bethlehem landfill drawing increased attention to the debate. Multiple bills proposing both a site evaluation committee and moratorium are currently before the Legislature.

A focus on rural health

On health care, Ayotte touted the creation of GO-NORTH, an initiative she launched last year to use $500 million over five years the state is receiving from the federal government’s Rural Health Transformation Program — which she bragged was the most any New England state received from the program — to improve the rural health care system in New Hampshire. 

“With this historic level of funding we will invest in innovative technologies to make care easier to access and to improve patient outcomes,” she said. “From expanding telehealth in primary care, specialties, and obstetrics, and emphasizing a prevention first model, we are going to leverage state of the art technology to overcome the barriers to health care delivery in every corner of our state.”

Specifically, she said she’s instructing Dee Jurius, her director at the Office of Professional Licensing and Certification, to make reforms and “ensure that outdated licensing rules do not get in the way of using new technologies and growing our providers in the North Country.”

Ayotte also addressed budget cuts lawmakers pushed onto the Department of Health and Human Services in the most recent budget.

“I’ve made no secret about my concerns with the back-of-the-budget cuts that were made to the Department of Health and Human Services,” she said. “But I am working closely with (Health and Human Services) Commissioner (Lori) Weaver on how we meet those budget targets responsibly, without affecting services.”

The most recent budget cut $51 million from the department. In December, DHHS announced the first round of those cuts would be $4.3 million in reductions to contracts with its vendors, including a homeless shelter, nursing providers, and mental and behavioral health care providers.

She also boasted about fully funding the Doorway Program, which helps people struggling with addiction; maintaining eligibility for Medicaid enrollees, though the enrollees in the highest income brackets will begin having to pay a premium to receive coverage as a result of the new budget; and setting aside funding to reimburse mental health centers for uncompensated care given to patients that can’t afford to pay their bills.

A school test score improvement study

Addressing education, Ayotte highlighted two changes passed by the Legislature last year: the expansion of the education freedom account program to include families of all incomes, and the ban on cell phones in public schools. She said she had visited public schools and talked to both teachers and students who embraced the cell phone restrictions, though sometimes reluctantly. “The lunchroom is louder,” Ayotte said. “Kids are talking to each other in the hallway.”

Yet she also pointed to a continuing need to improve math and reading scores. And she said she would task Department of Education Commissioner Caitlin Davis to look at New Hampshire schools that have improved those test scores and find lessons. 

“Outcomes matter more than anything else, and our math and reading scores need to be much higher,” she said, to applause from Republican lawmakers. 

A vow to stop income taxes

Republicans have lowered business taxes in New Hampshire since 2015, and have championed those tax cuts as a key ingredient in positioning the state for economic growth. But Democrats have argued those cuts have unnecessarily deprived the state of revenue and that the burden has increasingly fallen on local property taxes.

On Thursday, Ayotte did not ignore the plague of high property taxes. But she argued that Democrats’ proposed solutions — increasing state funding to cities and towns — are not the appropriate response. She drew a comparison to Connecticut, which adopted an income tax in 1991, and which had the third-highest property tax rate in 2023, according to the Tax Foundation, a national think tank. 

“Let this be a cautionary tale for the future of New Hampshire,” Ayotte said. “There is no getting around the fact that property taxes in New Hampshire are unsustainable. … But even more misguided are those in this room who argue that the solution to high property taxes is to raise other taxes.”

The governor did not propose her own approach to lowering property taxes, and did not mention House Republican proposals to impose universal tax caps on towns and school districts. 

At their press conference, House and Senate Democratic leaders declined to comment on the tax structures of other, Democratic-led New England states, and did not say they would support raising taxes or changing the revenue model in New Hampshire. “I’m not really focused on that,” Perkins Kwoka said.

Instead, Perkins Kwoka argued Ayotte and Republican lawmakers had misspent existing state funds on programs like education freedom accounts and could have used the funds to better incentivize housing development and child care. That, she said, will be at the center of the pitch to voters this election year. 

“Day to day on the ground, we continue to hear about these issues: housing, child care, energy costs, health care costs,” she said. “… We need legislators who are going to focus on what’s going to make people’s lives better, more livable, more affordable, and maintain our Granite State advantage.”