Sununu’s inaugural address sets his own business agenda

Meanwhile, a Democratic Legislature prepares to advance policies introduced last session

Governor Chris Sununu strongly defended business tax cuts in his inaugural address on Thursday, but he was silent when it came to many policies proposed by a newly elected Democratic Legislature.

Democrats want to either freeze or roll back business tax cuts – especially the Business Profits Tax, which had already been slashed from 8.5 percent to 7.9 percent in 2018, and decreased to 7.7 percent after New Year’s Eve. In 2021, it would land on 7.5 percent.

Last session, Senate Democratic leadership wanted to freeze the rate at 7.9 percent and direct the funds to municipalities to relieve property tax shortfalls. Democratic House leaders want to roll the BPT back to 8.5 percent, and leave the scheduled Business Enterprise Tax rate cuts in place.

But Sununu credits the tax cuts for the state’s strong economy.

“Tax relief is working. Lowering the cost of doing business through tax relief has allowed businesses to reinvest in their workforce,” he said. “The last thing we should be doing is raising taxes or pushing a budget that does not live within our means.”

He later added that the budget he plans to submit in February, “will continue the current schedule of business tax reductions.”

Both parties agree something must be done to resolve businesses’ number one issue: a workforce shortage.

Democrats are touting a yet-to-be-seen bill by Sen. Kevin Cavanaugh, D-Manchester, that promises job training and workforce development “at every stage of life.”  At least part of that bill would stem the bill introduced last legislative session, which proposed using funds from the Department of Employment Security for job training, but expanding it beyond the unemployed, to existing workers.

Sununu proposed a “New Hampshire Career Academies” program that tacks a free year of college onto a high school education in cooperation with local companies. The governor referred to the model developed by the Rochester school system and argued it would not cost taxpayers, or the students, any money. (The Rochester program is funded through donations, mainly from businesses.)

Sununu did propose a one-time investment of $24 million in job training, but said it would specifically be directed toward growing the state’s nursing and healthcare workforce.

He also suggested that the work requirements while Medicaid expands would increase the state’s workforce. (Democrats support limiting some of those requirements.) But he was silent on Democrats’ proposal to codify the federal Affordable Care Act in law. 

Minimum wage and parental leave

Sununu did not mention paid family leave and increasing the minimum wage, key parts of the Democratic agenda last session.

House and Senate Democrats favor some version of an insurance program that the House passed three times last year but failed in the Senate. The insurance program, funded through a payroll deduction, would provide funds for workers caring for a family member or recovering from a short-term disability.

Sununu had said he supported the idea in principle, but opposed last year’s plan, deeming it financially unsustainable. Indeed, during the last campaign he sketched out some of his own ideas for paid leave, including a voluntary opt-in plan for businesses.

In regard to minimum wage, the state doesn’t currently have a minimum wage, defaulting to the federal minimum of $7.15 an hour. Meanwhile the surrounding states have already raised their minimum wage to $10 an hour or more.

Democrats from both houses plan to introduce an increase: probably to around $12 an hour, phased in over the next several years. In the past, Sununu has opposed any increase in the state minimum, arguing this should be on the federal level.

Energy

Sununu spoke generally about lowering electric rates, recalling hearing verbal support from legislators, however receiving legislation which “raises rates and burden our citizens.”

In terms of renewable energy, he talked about how the Public Utilities Commission and the Office of Strategic Planning are working out a plan for the Clean Energy Fund. The state currently has several renewable energy funds, all set aside for programs that help low-income residents.

Democrats have proposed to increase the cap on specific net metering projects by fivefold. The proposed bill would allow large businesses, institutions and municipalities to sell back electricity produced by renewable energy to the grid. Sununu had vetoed such a bill last year, arguing that other ratepayers subsidize such projects, although the Public Utilities Commission sets the reimbursement rate so that it is not a subsidy.