|
Week Twenty - June 5, 2009
This electronic publication, known as The Advocate,
is brought to you each Friday by your Greater Nashua Chamber of
Commerce, in partnership with our friends at Devine Millimet &
Branch, and ActiveEdge. Please use this piece to review what has
happened in Concord this past week, read about our Chamber's lobbying
efforts relating to those activities, and preview what we are
doing on behalf of our Chamber members in the coming week.
This Week’s
Update
As the end of the session approaches, the anti-business message
in Concord is becoming increasingly alarming. Votes to suspend
the Business Enterprise Tax credit, to raise the Rooms & Meals
tax, to place new burdens on small businesses through a state
WARN Act, and to raise the Unemployment Tax by over 80% were all
approved by either the Senate or the House this week.
If you are concerned by any of this, we strongly urge you to
attend a special breakfast event hosted by the Greater Nashua
Chamber of Commerce on June 18, 7:30-9:00am. The Governor will
be presenting his State Of the State Address at this breakfast,
and it will provide you a perfect opportunity to hear the Governor’s
perspective on these and many other major activities taking place
in Concord. You can RSVP by calling 603.881.8333 or registering
on www.nashuachamber.com.
The
Budget - What a Mess
The number-1 issue on the Chamber
agenda for the next few weeks will be to lobby the negotiating
committee on the budget to remove the Senate’s initiative
to suspend the Business Enterprise Tax (BET) credit against the
Business Profits Tax (BPT) in 2011. The Senate Finance Committee
recommended to the full Senate that the BET credit be suspended
for FY 2010 and 2011. A floor amendment was passed that suspends
the credit for just FY 2011. The suspension of this credit will
supposedly bring in $40 million in revenue for the state, upon
the backs of businesses who would thereby lose that money. It
is egregious to think the Senate would advocate increasing taxes
on business during the worst recession in decades. Please note
that, to date, there has been no public hearing on this proposal.
What has happened to democracy in the New Hampshire Senate - our
citizen legislature? The concern about this suspension is that
it will undoubtedly become a permanent repeal of the credit when
one considers the logical consequences that ensue from this suspension.
The idea is to suspend the credit for one year, and then let businesses
recoup that lost credit starting in 2012. If one uses the $40
million figure that the Senate used, this means that two things
will happen in 2012; first, the state legislators at that time
will no longer be able to rely on the $40 million from the suspended
BET credit to help them balance the budget for that biennium.
Secondly, the State will have to start repaying the $40 million
that they “borrowed” from the business community in
2011. In other words, a future legislature in the State will now
be down $80 million as it starts planning its budget in 2012.
The legislators at that time will have little choice but to either
continue the suspension of the credit or outright repeal it.
One must remember the fact that the BET is largely a payroll
tax and calculated primarily on the wages a company paid to New
Hampshire employees. As a company adds jobs and payroll, its BET
naturally increases. A company in NH that is growing and prospering
doesn’t mind the fact that its BET continues to increase,
primarily because it can apply that tax credit against its BPT
liability, thereby offsetting the disincentive of increasing in
its BET obligation to the state. If this credit is repealed, it
will effectively penalize companies for expanding their employee
base and increasing wages, because those companies will now have
to pay a higher BET as a consequence of hiring more workers and
paying out more wages. This is the exact opposite of what good
public policy would dictate.
We have been told by various state senators that, even though
they don’t want the BET suspension to be part of the final
budget, they voted for it anyway so that all options could remain
on the table during the negotiations with the House. We strongly
disagree with this strategy. There are some options that are simply
too egregious, and too damaging to our state, to be left on the
table as a viable option.
We will ramp up our efforts to defeat this disastrous proposal
in the coming weeks.
What
Passed this Week
SB 40. The Chamber has been diligently working
since Christmas to amend SB 40, which requires 60-days advanced
notice for mass layoffs. We were successful in getting the bill
amended in the Senate to remove the personal liability language,
and making it less onerous on parent liability; however, the threshold
for which companies are held liable by the bill was left at those
companies with 75+ employees (this is different from the standard
used by every other state in NE and used by the federal government,
all of which apply this law to companies with 100+ employees).
Upon receiving the bill from the Senate, the House amended the
bill so that it would now apply to businesses with 80+ employees.
Some additional safeguards were put in place to protect the employer.
We are told that the bill will definitely go to a committee of
conference. There still needs to be changes to the liability language
and also a move to place the threshold for companies impacted
by this bill back at 100, which is consistent with federal law
plus the laws in our neighboring states.
Your Chamber has spent so much time and capital on this bill,
that it’s almost our personal crusade at this point. Here’s
hoping that we’re successful in these final negotiations.
SB 89 will grant immunity for unemployment overpayments
to recipients who receive benefits through no fault of their own.
Neither the claimant nor the employer would be charged with the
overpayment. The unemployment compensation trust fund would be
charged. The bill will be off to the Governor to sign shortly.
SB 129 was originally a bill creating a committee
to study “negative-rated” employers (those employers
whose employees take more money out in unemployment benefits than
the company puts in), but it has been amended at the request of
the Department of Employment Security and makes changes in RSA
282-A to restore the solvency of the Unemployment Compensation
trust fund. Employer contributions are the primary source of revenue
for the trust fund. In the current economic downturn, these contributions
are no longer adequate to fund New Hampshire citizens’ need
for unemployment benefits. Because the state is obligated to pay
benefits to unemployed workers whether or not revenues received
are adequate to fund these benefits, the state must borrow from
the federal government if the New Hampshire trust fund becomes
insolvent. Without reform of the system of taxes on employers
and benefits for workers, New Hampshire will face years of borrowing
which will lead to the payment of interest on the amount borrowed
and to higher federal taxes on the state’s businesses. Specifically,
the bill does the following:
- Gradually increases the taxable wage base from the current
level of $8,000 per worker to $10,000 in 2010, $12,000 in 2011,
and $14,000 in 2012;
- Allows the commissioner to add a .5% surcharge to every employer’s
tax rate if the trust fund balance fails to equal or exceed
$150 million throughout a calendar quarter and the trust fund
is in danger of insolvency;
- Raises the trigger levels for discounts to positive-rated
employers from $225, $250 and $275 million to $250, $275, and
$300 million;
- As positive rated employers are losing their discounts, negative-rated
employers will receive a corresponding surcharge in their rate;
- Requires the department to compute the positive-rated employer
discounts and the negative-rated employer increases on a quarterly,
rather than annual basis;
- Raises the tax rates of employers who continue to be negatively
rated for 4 consecutive years; and
- Requires that claimants serve a “waiting week”
after the termination of employment before they are eligible
to be paid benefits.
SB 144 allows the unemployment compensation
trust fund to be charged for benefits paid for certain employee
terminations. This is another piece of legislation requested by
the Department of Employment Security (DES). It removes the disqualification
for unemployment benefits for individuals who leave work to move
with a spouse who is relocating for employment, such as a military
spouse who is transferred. It also removes the disqualification
for those who leave employment to care for a member of the immediate
family who is ill or injured. It should be noted that, even with
these changes, a person must still be available for and seeking
work to be eligible for benefits. For example, someone who leaves
work to care for an ill family member would not be eligible as
long as he or she is prevented from working because of care-giving
responsibilities. These changes make the law more “family
friendly,” and will allow New Hampshire to receive $20.9
million in federal stimulus funds that will help the department
to pay benefits in this time of high unemployment. DES projections
indicate that the cost of these measures to the unemployment trust
fund will be small compared to the benefit of the federal dollars
they will enable the state to receive. Stimulus money means expansion
of those eligible for benefits.
Bills Killed
- by the House
SB 170, relative to benefits for unemployed persons who are attempting
to establish a business. This bill came at the request of the
Department of Employment Security to establish a program to pay
benefits to unemployed persons who are attempting to establish
a business. This program’s estimated cost is $8 million
per year. DES is making unemployment payments of $5.5 million
per week and it is projected that at this rate the trust fund
will be depleted by March 2010.
Put
off Till Next Year
The full Senate voted to re-refer HB 686 which would have changed
the existing Human Rights Commission laws and allow only complainants,
not employers, to remove a case to the Superior Court. Both claimants
and employers can currently request a case to be removed from
the Commission. The Chamber had strong concerns about this bill,
and looks forward to discussing it over the summer with its prime
sponsor, one of our local legislators, Melanie Levesque from Brookline.
Acknowledgements
This weekly update is made possible by the generous support of
Devine Millimet
& Branch, one of the state’s top law firms and our
Chamber’s contracted representative in Concord. If your
business has a legislative or local issue that needs strategic
consulting and attention, they are a valuable resource that can
help navigate you through both local and state processes.
This weekly update is designed and maintained by our friends
at ActiveEdge,
and we thank them for their help in delivering this piece to your
inbox every Friday!
If you have questions about this update, or comments to share
with us about other issues in Concord, please email Chris Williams
at cwilliams@nashuachamber.com.
We want to be sure we're representing you to the best of our ability,
so do not hesitate to reach out to us!
J.
Christopher Williams
President & CEO
Greater Nashua Chamber of Commerce
151 Main St.
Nashua, NH 03060
Phone: 603.881.8333
Fax: 603.881.7323
| 
