GOP leaders offer New Hampshire budget compromise that includes pay raise for state employees

Months into the state's budget stalemate, Republican legislative leaders are now willing to fund a pay raise for state employees.

Republicans and Democratic Gov. Maggie Hassan have been locked in battle since Hassan vetoed the Legislature's $11.3 billion, two-year budget in June. Hassan vetoed the budget, in part, because she said it included business tax cuts that weren't paid for and failed to fund the negotiated pay raise, which would've cost about $12 million.

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The government has been operating on a short-term spending plan at fiscal year 2015 levels. GOP leaders say the savings provide enough money for the pay raise. Their offer comes after Hassan put forth a compromise proposal that included business tax cuts but raised the cigarette tax and car registration fees.

She is rejecting Wednesday's offer.