Business-backed job training bill resuscitated in newly signed budget

Measure vetoed separately by governor becomes law under September compromise

A job training bill that Gov. Chris Sununu vetoed because of what he said a potential for higher unemployment taxes for employers businesses is now law, thanks to the compromise budget that Sununu signed.

House Bill 4 – the trailer bill to that budget that Sununu signed into law on Sept. 26 – will triple to $6 million the amount of job training funding from the unemployment trust fund. It will expand existing programs with a focus on training those out of the workforce, starting with those on Medicaid expansion and those leaving prison, for employers ready to train and hire in key sectors of the economy.

Republicans in the New Hampshire Legislature also opposed the measure, which was not only a top priority for Democrats, but was backed by the Business and Industry Association of New Hampshire as a way to address the labor shortage.

“There is a shortage of trained people, and if we can help with that, it is important that we do it,” said Sen. Kevin Cavanaugh, D-Manchester, prime sponsor of the bill.

Republicans had pointed to Department of Employment Security projections that diversion of the money from the unemployment trust fund would cause it to fall slightly below $275 million in the second and third quarters of 2021. That would trigger an increase in unemployment taxes.

No discussion

In his veto message, Sununu said that “raiding the unemployment system for this purpose is shortsighted, risky and financially irresponsible.”

But the Senate put the same language in the trailer bill of the original budget that was vetoed in June. And it reappeared in the newly incarnated the trailer bill in the compromise budget that the governor signed into law on Sept. 26.

The only noticeable difference is that in the budget signed by the governor the program would be run by the Department of Employment Security. In the vetoed version, the Department of Business and Economic Affairs would over see it. But both bills call for the same amount of funding from the same fund for the same programs.

There was virtually no discussion of the training fund during the budget debate, and it did not come up during budget negotiations, according to one source who was familiar with the talks. In both cases, the focus of the dispute was primarily planned cuts in the rates of the business profits tax and business enterprise tax.

The bill the governor signed also includes an Affordable Housing Fund, a Housing Board of Appeals and use of a single-sales factor to compute what proportion of multi-state corporate profits are taxed by each state. But they all had the general support of both parties, and the governor had not opposed them as separate bills.

“I’m just glad that he let it go through,” said Cavanaugh. “He vetoed so many of our bills.”

Sununu vetoed 57 bills in all, including the budget and trailer bills passed back in June.

Programs change hands

The governor’s press office did not respond to inquiries about why Sununu ended up accepting the job training program, but one possible difference is that Employment Security projections have changed. The latest projection, in September, indicated that the diversion would not have an effect on unemployment taxes after all. But the next one might yield a different result.

Such projections are “tricky,” warned Deputy Employment Security Commissioner Richard Lavers. “They change from month to month.”

The new budget means that the agency will take over two programs currently run by the Department of Business and Economic Affairs.

One program, to be renamed Work Invest, would provide matching grants to companies for employee training. The other, WorkReadyNH, will continue to work with the community college system to provide soft job skills, ranging from how to network for a job opportunity to how to dress properly for work.

The new program would provide one-on-one case management to those in populations that have trouble getting work, including people who need training to change careers or have substance use disorders and are in recovery as well as disabled, homeless, senior citizens, legal immigrants and those whose primary language is not English.

Employment Security plans to start with inmates trying to join the general population and people enrolled in the Medicaid expansion program.

The plan is to connect individuals with employers with immediate employment needs, with a priority for jobs identified through the state’s Sector Partnership Initiative and for employers who pay individuals during training periods. The new program should be up and running by Jan. 1, Lavers said.

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