Gov. Maggie Hassan's budget proposal banks on a New Hampshire casino and a 30-cent increase in the cigarette tax.
Hassan is presenting her budget to the Legislature at this hour.
The budget restores 90 percent of funding the formerly Republican-controlled Legislature slashed to state colleges and universities, allowing for a freeze on tuition.
Hassan said she would accept federal funds to expand Medicaid under the federal Affordable Care Act to cover more New Hampshire families.
The budget also puts 15 more state troopers on the highways, doubles the research-and-development tax credit for business and expands mental health services.
"New Hampshire stands at the threshold of a bright new future," Hassan said. "But we cannot sit back and wait for the innovation economy to develop. We must lead the way."
Hassan cut $500 million from agency requests, which the governor's office said reduces general fund spending below 2008 levels.
Already generating controversy is her support for the bipartisan Senate gaming bill, cosponsored by Sens. Chuck Morse, R-Salem, and Lou D'Allesandro, D-Manchester, that would permit a casino in New Hampshire.
The bill would award the casino by bid, but Rockingham Park is perceived as a frontrunner because Las Vegas-based Millennium Gaming has an option to buy the track.
The Morse-D'Allesandro bill calls for $80 million in licensing revenue. Hassan would use gaming revenue to fund her budget plan.
"The revenue from one casino would mean tens of millions of dollars a year that can be used to strengthen our economy and address our priorities," Hassan said, "such as freezing in-state tuition and addressing our mental health crisis, as well as funds to address social costs like substance abuse and gambling addiction."
A casino also would create jobs, the governor said.
"With the intense competition for casinos in Massachusetts leading to 11 applications for only three licenses, it's clear that there is more than enough room in our region for a New Hampshire casino," Hassan said.
Another controversial component will be accepting $2.5 billion from the federal government to expand Medicaid.
"As both Democratic and Republican governors around the nation have said, it's a good deal," Hassan said, "one that will, among other things, allow us to save money in existing state programs, while increasing state revenues."
The governor campaigned on restoring college funding.
"I have too often heard stories like the one told to me by a woman in Londonderry, whose daughter went to UMass-Lowell because Massachusetts' out-of-state tuition is lower than New Hampshire's in-state tuition," Hassan said. "That is unacceptable."
Her budget also would deal with trouble in the mental health system, where people in crisis are coping with delayed admissions to the state hospital.
The plan includes adding community beds and support services.
"Dozens of people are waiting on a daily basis for critical mental health care," Hassan said. "Some leave without care at all, often putting themselves and those around them at risk of harm."
The governor said the cigarette tax increase would still keep New Hampshire below neighboring states.
"Cigarette taxes nationwide have proven to be one of the most effective ways to prevent youth smoking," she said, "and my budget proposes reversing the cigarette tax cut and increasing the tax by an additional 20 cents, which will still keep our cigarette tax below those of surrounding states."