Insurance premium increase reflected in state numbers

A recent state report illustrates the insurance-premium increases that many New Hampshire consumers feel viscerally.

In the 2025 fiscal year, which ended June 30, insurers collected more premiums than ever before, and paid a record $176 million in taxes on those premiums to the state. The money went to the state’s general fund, which pays for a broad range of public services.

As a point of comparison, this is $41.3 million more that insurers paid in the required premium tax in 2019.

The tax on premiums collected by property, casualty and life insurers is 1.25 percent. For health insurers, it is 2 percent.

The insurance industry notes the cost of health care, car repair and building materials have increased, so premiums have been boosted to keep pace.

Phil Sletten, policy director for the N.H. Fiscal Policy Institute, said the increased taxes paid by insurance companies helped offset declining state revenue from tobacco and liquor taxes as fewer people now use these products than in the past.

Gas tax revenue has also declined as more people drive electric vehicles and cars get better mileage, so motorists aren’t buying as much gasoline as they once did.

On the other hand, the state is getting more revenue from legalized gambling as New Hampshire has expanded its gaming options.

The changing tax picture in the state can have an effect on state services, including public education, health care and public safety, Sletten notes.

“It’s important because the revenue side of the state budget funds services that the state provides and also provides support for local governments,” Sletten said.

In other words, when state revenue declines, local governments often have to pick up the slack for things like schools and roads, and this can result in property tax increases.

The state relies heavily on business taxes, but state lawmakers have reduced corporate taxes in recent years, and business revenue has seen declines.

They also eliminated a tax on wealth known as the interest and dividends tax. The state’s meals and rooms tax was also reduced under Gov. Chris Sununu.

“The preliminary data reflecting the end of the 2025 fiscal year leaves a few key questions for the near-term future of State revenues,” Sletten said in a Sept. 8 report.

“Revenues over the next two years will determine whether the upcoming budget has the benefit of a revenue surplus or if revenues fall short of their targets, which might prompt reductions in services or other adjustments to State programs.”

Gov. Kelly Ayotte signed a new two-year budget on June 27 totaling nearly $16 billion, an increase of about $800 million from the budget approved by Sununu two years earlier. But a variety of cuts had to be made in the new budget to make up for a reduction in federal pandemic relief money.

© 2025 The Keene Sentinel (Keene, N.H.). Visit www.sentinelsource.com. Distributed by Tribune Content Agency, LLC.