The Senate approved a bill Thursday that would allocate $12 million per year in state funding to nonprofits providing services to homeless people, amid concerns that municipal budgets are strained and shelters are struggling.

Senate Bill 113 would dedicate the money to the Department of Health and Human Services “for the purpose of contracting with nonprofits that provide a continuum of services to individuals and families who are experiencing homelessness.” The bill dedicates an additional $3 million to the housing stabilization fund, which allows DHHS to contract with organizations “that provide eviction prevention and rehousing services” and allow those organizations to bill Medicaid for those

The bill is “looking to help keep our shelters open while the state is also working on the housing crisis,” said Sen. Regina Birdsell, a Hampstead Republican and the bill’s prime sponsor, in an interview.

Sen. Donovan Fenton, a Keene Democrat, advocated for the bill, noting that his mother had experienced homelessness when she was a child. “It wasn’t by choice,” he said during discussion on the Senate floor Thursday. “Her father lost their job, and they had to spend their evenings in their family car under a bridge.”

Fenton added, “This bill is not just about building more shelters. It’s about keeping people in their homes, providing support before they find themselves out on the streets.”

The Department of Health and Human Services currently provides $8 million per year to homelessness services, and an additional $2 million for cold weather shelters. But shelter operators say that that funding is well short of what they need to operate.

The proposed funding comes as New Hampshire’s unhoused population has grown dramatically. The U.S. Department of Housing and Urban Development’s 2024 Homelessness Assessment Report found that New Hampshire’s unsheltered homeless population has grown 71% from 2023 to 2024, and 289% since 2019.

New Hampshire had the highest percentage increase in homelessness of all 50 states between 2022 and 2023, according to annual point in time estimates.

And homeless shelters are coming under strain. Speaking to the Senate Finance Committee in support of SB 113, Maria Devlin, president and CEO of Families in Transition, which operates the largest shelter in the state, said their annual occupancy rate is 97%. Devlin added that state funding has not been sufficient; the organization typically faces a $1 million shortfall each year after its state allocations, which must be made up through philanthropy and municipal grants.

Birdsell said her bill’s proposed allocation of $12 million wouldn’t completely change that dynamic.

“There’s always going to have to be some type of philanthropy going on,” she said. “But this hopefully will increase what they’re already getting to keep them lasting a little bit longer, so their philanthropy requirement is a little bit less.”

Towns and cities, which are statutorily obligated to take care of unhoused people in their jurisdictions who can’t find support, say they are also burdened.

Keene Mayor Jay Kahn, a former state senator, testified to the committee that his city had budgeted $300,000 for housing costs last year, and ultimately had to spend $1.2 million. Kahn and other mayors argue the state should step up funding to shelters to address the demand and provide a stronger pathway to housing for struggling residents.

“The burden is significant and extreme,” he said.

The bill received a unanimous vote of ought to pass. The Senate then voted to table the bill – a standard maneuver that allows it to be introduced into the budget later in the session.