New Hampshire House panel OKs tripling job training funds

Money would come from unemployment trust fund

The New Hampshire House Finance Committee narrowly approved a bill that would triple the amount the state spends on job training to alleviate labor shortages in key industries – including high tech – with money from the unemployment trust fund.

Taking the money from the fund would mean employers would have to pay an additional half percent in unemployment compensation tax premiums in the last half of 2021. But that timing lessens the impact on many employers, particularly those that mainly have full-time workers who are well compensated. Instead of costing New Hampshire employers more than $16 million in just one quarter, it would cost less than $10 million in two.

That was still too much for most Republicans in the committee

“This sounds awful,” said Rep. Werner Horn, R-Franklin . “We don’t need it. If we had higher unemployment, training would be an asset.”

But Rep. Patricia Lovejoy, D-Stratham, said the training is “to deal more with labor shortages.”

Senate Bill 2, the Granite States Jobs Act of 2019, would increase the amount going to the job training fund from $2 million to $6 million.

The House increased it to $2.5 million in the budget. Both increases are minor compared to the federal training funds available, but federal funds come with restrictions from Washington, said Lovejoy. The state can spend its own money more quickly, either as a rapid response to a mass layoff, or to meet the urgent need of a specific company seeking to expand.

The bill does say that the money will be spent only after consulting the governor’s Workforce Innovation Board, which targets key industries that contribute to the state’s economic development. The bill also triples the amount to administer the program (from $200,000 to $600,000), specifically mentions the support of the Sector Partnership Initiative, which specifically targets the manufacturing, hospitality, healthcare and information technology industries.

The half-percent cost that employers would pay is not actually an increase. That’s because projections say that taking the money from the fund would cause it to dip below $275 million in the last half of 2021. When the fund is above $275 million, a 1% discount goes into place, so going below the threshold will result in the discount going down a half percent.

That timing helps employers, since unemployment payments are made based on the rates set when employees receive their first $14,000 in wages. Most full-time workers get their $14,000 in the first half of the year, when the discount would still be in effect. Only lower-paid or part-time workers would be getting paid their first $14,000 in the second half, when the discount is reduced.

That’s a small price to pay, agued Rep. William Hatch, D-Gorham. Yes, most people are working now, but many are unskilled and are not making enough money to get by.

“Thousands of individuals don’t have a sustainable income,” he said. “This will help them get trained for manufactures crying out for individuals with the proper skills.”

“Many businesses already do this on their own,” countered Rep. Joseph Pitre, R-Strafford. “We are taking away the discretion of businesses to spend that money as they need it to spend it on bureaucracy and government, to do what?”

The committee passed the bill on to the full House by an 11-9 vote.