Sponsor's Insight

There is so much activity at this time in Concord that it is hard to determine what is most important to talk about.  Next week is "Cross-over" which is the time that all bills both in the House and Senate have to be addressed and those that are passed "cross over" to the other chamber for action.

The matter getting the most attention has been the House of Representatives Finance Committee budget of $10.15 billion for the next two years, which the Committee adopted Thursday and which the entire House will consider next Thursday.  Because it was using a revenue estimate that is significantly lower than that used by Governor John Lynch in preparing his budget, many additional budget cuts that total $519 million have been made in the proposal.  The business community and all New Hampshire citizens have a stake in the budget, and should familiarize themselves with what it contains.  Among the notable provisions that have gotten attention are:  

• Significant cuts to the budget of the Health and Human Services Department, especially in connection with aid to hospitals, Medicaid, human service programs and mental health services.  Business groups have decried these and warned that the result will be increased pressure on hospital emergency rooms, the cost of which will be shifted to the premiums business pay for health insurance on their employees.
• Elimination of state scholarship aid by spending the trust fund that has been built up by the state from proceeds from the New Hampshire 529 Plan.  In the past, these funds have been used to provide scholarships to New Hampshire students attending public and private colleges in New Hampshire and eliminating them will make New Hampshire the only state without a public scholarship program. 
• Drastic cuts to the University System and Community College System budgets.  The huge cuts proposed, coupled with the elimination of scholarships have business people concerned about workforce development in New Hampshire, a significant issue for businesses seeking trained employees.
• Significant cuts to the Department of Corrections that caused the Commissioner to predict the closing of the prison in Berlin, which in turn caused alarm about employment in New Hampshire's northern region.
• Cuts in almost every state department's budget which undoubtedly will affect the level of service.

 A last minute provision in the budget that got a lot of attention was a change in state public bargaining law making employees "at will" after contracts expire.  That provision undoubtedly will get much debate when the budget reaches the floor.  The House budget is only the second step in the budget process, the first being the governor's budget proposal.  After passage, with or without amendment, the budget goes to the Senate which will devise its own spending plan, use its own revenue estimate, and pass its budget.  Lawmakers urged citizens to study the House budget and give the Senate input. Undoubtedly, the governor will have some input in the Senate budget process and after its budget passes, a committee of conference will produce a final budget, which the governor will sign, veto or allow to become law without his signature.  The process is not over, but all citizens should pay attention to the effects of what the legislature is doing.

In other significant action, the House and Senate versions of constitutional amendments regarding school funding go to the other body, and it will be interesting to see if there is room for compromise on language that will allow an amendment to pass by the required 60% and go to the voters. Also, a House committee recommended passage of two bills (HB 648 and 649) that would make changes to the eminent domain laws and are aimed at derailing the "Northern Pass" project. The House passed 648 but voted to retain 649. Business groups have opposed these bills as aimed at a particular business. Meanwhile, the Senate passed a "line item veto" constitutional amendment as well as tax law changes on the definition of "reasonable compensation" and increasing the amount of losses that can be carried forward to future tax years.

The legislature will be busy next week dealing with remaining bills. Then, stay tuned for Act 2!

Chamber Insight

Pole Tax Exemption Advances

SB 133, which seeks to reestablish the property tax exemption given to telephone poles and conduits, passed the House Municipal and Government Committee last week by a vote of 9 to 7. The Chamber supports SB 133 as the loss of this key exemption will in essence create a new tax paid by businesses or residents who use land line telephone services.

The committee featured several new legislators, all of which noted that they were elected and sent to Concord to cut taxes, not raise them. SB 133 now heads to the full House of Representatives this week.

Senate Tackles Key Business Tax Provisions

The State Senate continued its solid progress on key business tax provisions last week. The full Senate passed both SB 125 and SB 126. SB 125 is the Senate's attempt to address the issue of reasonable compensation, or how much compensation a business owner can claim as salary versus profit. SB 126 reforms the state's net operating loss statutes by increasing the current threshold form $1 million to $10 million. Both provisions are supported by the Chamber and several other business organizations.

The WARN Act is Back

Does WARN Act (worker adjustment and retraining notification) sound familiar to you? It might as two years ago New Hampshire established its own WARN Act intended to give more teeth to the law compared to the Federal WARN Act. The Chamber and other business groups lobbied heavily on this issue as the original legislation to create a State WARN contained several flaws that would have been harmful to the state's business environment. The WARN Act requires employers of a certain size to notify employees prior to mass layoffs or plant closures.

Last week the Senate Commerce committee considered SB 121, a provision that would correct one of the more significant flaws of the original WARN Act. While the employee threshold for the federal WARN Act is 100 or more, the state version established a threshold of 75 or more. Besides adding a level of confusion to complying with the federal and state WARN Acts, having two different employee thresholds actually hurts New Hampshire's business competiveness as we are the only state in the Northeast with a threshold of less than 100. The Chamber supports SB 121 and was pleased to see the committee act favorably on the bill. The full Senate will take up the issue this week.

The Week Ahead

This week will undoubtedly be dominated by news of the House budget proposal, especially in light of the controversial collective bargaining language that was added late last week. Expect dozens of floor amendments to be filed to add, subtract, and change the current proposal on the floor. Amendments will be aimed at restoring cuts to certain agencies and also stripping out language like the collective bargaining piece. Though the debate and voting on amendments will begin on Wednesday, House Speaker Bill O'Brien expects the House to vote on the budget on Thursday. Stay tuned for a busy week...

Michael Skelton

Greater Manchester Chamber of Commerce 

michaels@manchester-chamber.org