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Cutting taxes was among the priorities Gov. Chris Sununu outlined Thursday in his third biennial budget address. 

The Republican governor initially vetoed the last New Hampshire budget in June 2019, forcing the state to operate under a temporary spending plan until a $13 billion compromise was signed into law three months later. 

Since then, Republicans have regained control of both the House and Senate, likely providing a smoother path for the governor’s priorities, including a budget that neither increases nor adds taxes or fees. 

Instead, Sununu proposed lowering the business enterprise tax and raising the threshold for filing it to exempt as many as30,000 small businesses, as well as reducing the rooms and meals tax from 9 percent to 8.5 percent. He also wants to start a five-year phase-out of the interest and dividends tax. 

Changes to the state’s business income tax are not included. 

“Whether you are a small business just starting out, a family of four looking to enjoy a meal out or are retired and enjoying life in the Granite State, we’re providing equitable, across the board tax relief to the people of our state,” he said in an address that was streamed online. 

“After such a tumultuous and uncertain year, now is not the time to be raising taxes on the people of our state and our small businesses, and that’s why we’re cutting them. It can and must be done.” 

A few months into the pandemic, Sununu said the state was facing a budget shortfall of about $540 million. On Thursday, he said the shortfall is now projected to be less than $50 million, thanks to good management. That allows for a budget that focuses on “core, everyday services” that will improve the lives of the state’s citizens, he said. 

“It’s a budget that ignores politics, it has no empty promises,” he said. “This budget makes smart, strategic targeted investments without having to balance it on the backs of essential workers.” 

Republican legislative leaders praised Sununu’s proposed tax cuts and other measures. 

“Restoring the strong economy New Hampshire enjoyed prior to the pandemic is a top priority for Republicans because we know that a strong economy is the best way to protect taxpayers,” said Sen. Chuck Morse, R-Salem. 

Democrats, however, disputed Sununu’s claim that he was “downshifting cash to municipalities, not cost.” 

They noted that while his proposal includes $30 million for school infrastructure projects and as much as $15 million in revenue sharing for towns and cities via the rooms and meals tax, the last budget provided an additional $138 million for schools and $40 million for communities.