NH Senate Democratic agenda includes rollback of business tax cuts
Legislative proposals also include minimum wage hike, family and medical leave program
Democrats in the NH Senate say they want to freeze business tax cuts – including those that just went into effect – increase the minimum wage and mandate payroll deductions to pay for family and medical leave under their majority as the new legislative session begins.
Each of the initiatives has a bit of a twist intended to make them more palatable to business, and possibly Republican Gov. Chris Sununu.
The Democrats – who also have a majority in the House – announced their “Granite State Opportunity Plan” Wednesday in the Legislative Office Building, as the House convened across the street for the first time this year.
The business tax bill – which will be introduced by Sen. Lou D’Allesandro, D-Manchester, would suspend the business profits tax rate at 7.9 percent, the rate it was before New Year’s, when it went down to 7.7 percent. (Under previous legislation, it would eventually go down to 7.5 percent in 2021.) The business enterprise tax rate would remain at 0.675 percent instead of going down to 0.6 percent and eventually dropping to half a percent.
The Senate proposal would differ significantly from one from Rep. Susan Almy, D-Lebanon, chair of the House Ways and Means Committee, and backed by House Speaker Steve Shurtleff. Hers would repeal all previous BPT tax cuts, meaning the tax rate would return to 8.5 percent, but leave the BET alone.
Under the Senate bill, the money saved would be distributed to towns and cities, with the expectation that they would use it to lower property taxes. Many small businesses pay more in property taxes than they do in business taxes, said Senate Majority Leader Dan Feltes, D-Concord.
The Republican Legislature “continued downshifting costs onto municipalities and local taxpayers to subsidize these corporate handouts, many with headquarters out of state,” Feltes said.
As for the minimum wage, Senate President Donna Soucy, D-Manchester, hasn’t decided on how much she wants to raise it as part of her “living wage” proposal.
Last year, she sponsored a bill that would have increased it to $12 by the following year. Currently, the state has no minimum wage, falling back on the federal minimum of $7.25 an hour, which hasn’t been increased since 2009.
On New Year’s Day, the minimum in Massachusetts and Vermont went up to $10 an hour, while Maine’s rose to $11.
Soucy said her proposal would allow businesses to pay below the minimum wage if they offered other benefits, such as paid sick days.
A paid family leave bill would be similar to one that passed the Republican-controlled House last year, but failed in the Senate after Governor Sununu objected to it. It would impose a payroll tax deduction of .05 percent on private employees. That would go into an insurance program that would pay workers about 60 percent of their salary for 12 weeks so they could care for a sick relative or child, or to recover from an illness themselves.
But the Senate bill differs from last year’s House bill in three significant ways:
The House bill would have allowed workers one chance to opt out of the deduction (and the benefits) when they are offered to participate in the program. While that provision was used to win over conservatives in the House, the governor said that it would make the program unsustainable. The Senate bill would include all private workers (state workers would be exempt, unless it is negotiated in a contract). Businesses would be able to opt out if they offer a similar program.
The House bill would have been administered by the Department of Employment Security, a plan that would have required substantial up-front costs. Under the Senate proposal, the agency would still administer deductions, but claims administration would be bid to a third-party as part of “public private partnership.”
The Senate would also extend federal family leave job protections to business under 50 employees.
The Senate Democratic leadership also plans to introduce several other proposals that affect business, including:
• Increasing workforce development and job training funding by using money from the state unemployment insurance funds
• Protecting some aspects of the Affordable Care Act – such as preexisting conditions and Medicaid expansion – by loosening work requirements and increasing rates to some Medicaid providers
• Increasing the net metering cap fivefold, allowing larger businesses and municipalities to get credits for generated renewable energy that is returned to the electric grid. Governor Sununu vetoed a similar bill last year.