NH Senate to vote on Dems’ job training proposal
Package contains boost in funding, cut in unemployment tax rate
The NH Senate is planning to vote Thursday on a bill that would triple the state’s funding for job training programs with money from the unemployment trust fund while slightly cutting the unemployment insurance tax rate.
But the bill has raised concerns that the funding mechanism could deplete the unemployment fund in the long run, which would eventually raise rates on employers.
Senate Bill 2 would cut the tax rate by two-fifths of a percent rather than one-fifth of a percent beginning in the second quarter of 2019. At the same time, it would increase the maximum amount of money for job training grants from $2 million to $6 million and expand what those funds can be spent on. It would also triple to $600,000 the amount for administering the funds.
Currently, the training funds are divided between WorkReadyNH, which helps those who are chronically unemployed with soft job-seeking skills, such as how to write a resume and how to present better during an interview, and the Job Training Fund, a matching grant that businesses apply to upgrade the occupational skills of their existing workforce.
The bill also expands funding for administering the Sector Partnership Initiative, a program which has been federally funded at approximately $1 million a year. Under the initiative, industry leaders from five economic sectors — construction, healthcare, hospitality, manufacturing and technology – work with the Community College System of New Hampshire to address their workforce needs.
The bill also adds homeless people to the list of those who could be trained with the funds.
Both the bill and sponsor Sen. Kevin Cavanaugh, D-Manchester, do not specify exactly how much of the extra funds would be spent on what. That’s left to the Department of Business and Economic Affairs in conjunction with the Governor’s Workforce Innovation Board.
“Ideally, it will mean a lot more people getting trained, not just the unemployed but those who are retraining or changing careers,” Cavanaugh told NH Business Review. It will help workers stay employed, he said, “so they can keep up with this changing economy.”
Cavanaugh also said it would help those in affected by the opioid crisis. “There is an incredible need for those in recovery to get them a trade and a job,” he said.
He also said that that tying a tax decrease to the bill, would help “get business on board.”
“It would certainly increase the funding pool,” said Phil Przybyszewski, director of the Community College System of New Hampshire’s Workforce Solutions Project. “Right now, most of the training fund is federal.”
The Business and Industry Association of New Hampshire backs the bill, since the workforce shortage is one of its top priorities. But it asked the Senate Finance Committee to amend the measure to add some protections to the unemployment trust fund, since the tax rate goes up once it the fund dips below $275 million. At the end of November, it was up to $312 million, thanks to the state’s low unemployment rate – currently at 2.5 percent.
But that could change. If the economy – knocked about by trade wars and government shutdowns – should go into a tailspin, the BIA would like to make sure that any money not spent at the end of the year lapse back into the fund. It also wants a trigger mechanism that would suspend training funding if the unemployment fund sinks to $280 million or if it is clear the state was going into a recession.
The finance committee voted for an amendment that included language on lapsing the fund, but it contained no language about a trigger. The bill was passed to the full Senate on a 4-2 vote, suggesting there might be some floor debate, and perhaps a roll call vote, but it is expected to pass one way or another under the Democratic majority.