Week Seven - February 19, 2010

This electronic publication, known as The Advocate, is brought to you each Friday by your Greater Nashua Chamber of Commerce, in partnership with our friends at Devine Millimet & Branch, and ActiveEdge. Please use this piece to review what has happened in Concord this past week, read about our Chamber's lobbying efforts relating to those activities, and preview what we are doing on behalf of our Chamber members in the coming week.

This Week’s Update

Lots to cover again this week in the Advocate.

Jobs Bill Rolled Out

A key part of the Governor’s promised jobs program was formally rolled out this week with the introduction and quick Committee passage of SB 501. This bill creates a so-called “workshare” program. Under this proposal, when companies and workers agree to reduced hours as an alternative to layoffs, the State would make up part of the lost wages for workers through unemployment benefits. The theory is that taxpayers would avoid the social costs associated with increases in unemployment (things like increases in Medicaid). The Department of Employment Security believes that the bill will have no negative impact on the unemployment trust fund and that it may actually help the trust fund.

The Chamber cautiously supports this bill. We are pleased with the manner in which the Governor has sought input from stakeholders on this bill, and we are also encouraged at the work DES has done in estimating the fiscal impact of SB 501.

We strongly urge the House and Senate to look carefully at how this bill will impact the trust fund. We have not yet seen a real, detailed analysis of different scenarios relating to the Workshare portion of the program and how Trust Fund balance could potentially be impacted; rather, we have only heard theoretical projections concerning the potential impact on the fund. While theory is good, we all know very different things can happen in reality. In view of the importance of that fund, and its precariously low balance at present, we want to make sure that the good intentions behind SB 501 can actually be carried out without any negative impact to the State.

On a related note, while we applaud the Governor’s actions to shore up jobs for New Hampshire’s citizens, we are still hoping to see more concrete support for New Hampshire’s employers who hire our citizens. For example, the Legislature is hotly debating several bills related to Reasonable Compensation and Net Operating Loss, two issues that have a far greater impact on employers in New Hampshire than does the NH Working initiative. Yet, the Governor’s Office has not publicly demonstrated interest or support for either of these issues. We need the Governor’s Office to be just as vocal and active on these issues as it is on the NH Working initiative, which it is pushing forward at lightning speed.

The Reasonable Compensation Saga Continues

Considering (or maybe because of) the lack of any public hearing before the LLC tax sprung up in the final hours of last year’s budget discussions, the issues associated with that tax have provoked an amazing amount of input from the public over the course of the last couple of months. The latest round opened up on Tuesday, when the Senate Ways & Means Committee held a hearing on SB 497, a bipartisan attempt to fix some of the problems with the way the State determines reasonable compensation, and to get rid of some of the outmoded aspects of the interest and dividends tax.

Chamber President Chris Williams and Advocacy Committee Chair David Heath of Melanson Heath & Co. testified in favor of the bill on behalf of the Chamber. Williams hammered home the point that New Hampshire has lost its image as a business-friendly state over the last several sessions, and the LLC Tax/Reasonable Comp issue is at the heart of this situation. According to Williams, over 45 different news stories and editorials on this issue have appeared in the past two months, all of them painting New Hampshire in a very bad light to those outside the state following these developments. As Williams stated, prospective businesses look at what’s going on with regard to the LLC tax and Reasonable Compensation, and ask themselves why they would want to come to a State where they have no idea what their tax rate will be.

The Department of Revenue Administration, to no one’s surprise, is predicting dire revenue problems if this bill passes. They are claiming that the State will lose up to $84 million in revenue under SB 497. David Heath and other experts such as Bill Ardinger of Rath Young & Pignatelli vociferously dispute that claim. When challenged by the senators on the committee, the Dept. Of Revenue acknowledged it is having difficulty creating a detailed financial analysis of the bill. The Senate Committee recessed the hearing for a couple weeks, asking the Dept. of Revenue to come back with that detailed analysis.

Given this significant difference of opinion on the potential cost of the bill, and the clear importance of the revenue issue, we think it is essential that the revenue estimates which the Senate Ways & Means Committee ultimately decides to rely upon must be as defensible as possible. That’s why we were very much encouraged by the idea which was floated in the hearing that there should be a meeting of the various stakeholders (including DRA, legislators, and business representatives) to really get to the bottom of those numbers.

The Senate Ways & Means Committee will vote on this no earlier than the first week in March.

Municipalization Of Broadband?

There were some interesting developments in the House Science, Technology & Energy Committee this week on HB 1242, a bill which would allow municipalities to use public money to build broadband infrastructure. Although current law allows municipalities to do this in areas which are not serviced by existing broadband providers, HB 1242 would allow municipalities to do this anywhere within a town. The bill was supported by the NH Municipal Association, and was opposed by broadband providers and the Department of Resources & Economic Development, as well as the Chamber. The concerns centered around the business and economic development implications of the bill. At the end of the day, should government be doing a job that private business performs?

On Tuesday, after lengthy discussions within the Committee, a motion to send the bill to interim study failed by a 7-7 vote. After a new motion was made to pass the bill, the Committee recessed until Wednesday. There were obviously lots of discussions going on during Tuesday night, and from the discussions which took place in the Committee on Wednesday, the Speaker of the House even played a role in getting the various players together. When the Committee reconvened on Wednesday, the “Ought To Pass” motion was withdrawn, and a motion to reconsider the interim study proposal was passed by a 14-1 margin.

It is evident from the discussions that this issue is going to be seriously looked at in the Committee, and that the private broadband providers have committed to the Chair and to the Speaker that they will work closely with the Committee, DRED and the municipalities to try to resolve the issue as quickly as is reasonably possible. Kudos to all of the people who got this done, and especially to DRED Commissioner George Bald for recognizing the implications of this bill and getting involved in the Committee process.

What Was That?

There were some raised eyebrows in the Senate Commerce Committee on Tuesday. The Assistant Commissioner of Insurance was speaking in opposition to SB 452, a bill to allow individuals and small businesses to purchase health insurance from out of state companies that are subsequently not bound by New Hampshire mandates. The Assistant Commissioner who, to her credit, is always frank and forthcoming, told the Committee that the high medical costs in New Hampshire can only be reduced if the State intervenes in the way hospitals set their costs. There were some surprised faces in the room, to say the least.

The Committee moved on without missing a beat and ultimately voted 4-1 on Thursday to kill the bill. We don’t think this will be the end of efforts - which we think are laudable to enhance competition in New Hampshire.

Acknowledgements

This weekly update is made possible by the generous support of Devine Millimet & Branch, one of the state’s top law firms and our Chamber’s contracted representative in Concord. If your business has a legislative or local issue that needs strategic consulting and attention, they are a valuable resource that can help navigate you through both local and state processes.

This weekly update is designed and maintained by our friends at ActiveEdge, and we thank them for their help in delivering this piece to your inbox every Friday!

If you have questions about this update, or comments to share with us about other issues in Concord, please email Chris Williams at cwilliams@nashuachamber.com. We want to be sure we're representing you to the best of our ability, so do not hesitate to reach out to us!

J. Christopher Williams
President & CEO
Greater Nashua Chamber of Commerce
151 Main St.
Nashua, NH 03060
Phone: 603.881.8333
Fax: 603.881.7323