On the heels of good news for Granite State workers — the unemployment rate was just 2.2 percent in September — came a boost for state employers: A 30 percent cut in their unemployment tax rate.
“Excellent,” said Bruce Burke with the state chapter of the National Federation of Independent Business. “A breath of good news.”
According to a statement from Gov. Chris Sununu’s office, the unemployment trust fund has more than $300 million on hand. “The fund is set to finish the third quarter with sufficient balances to trigger a 30 percent tax rate reduction for the average New Hampshire business. The tax rate reduction is triggered by state law when the fund maintains a balance of $250 million or more for an entire calendar quarter.”
David Juvet with the New Hampshire Business and Industry Association called the news “fantastic.”
“This is welcome relief for employers already struggling with inflation’s impact on raw materials, and the higher costs from a tight labor market.”
New Hampshire still has one of the nation’s highest unemployment insurance tax burdens, ranking 44th on the Tax Foundation’s State Tax Climate Index. However, it is still lower than Rhode Island (49th) and Massachusetts (50th).
“It is no accident New Hampshire has experienced an explosion in businesses calling the state home since the pandemic,” said Sununu. “We are making New Hampshire an even more attractive destination while lowering the costs of doing business so that businesses can choose how to invest those dollars. When you combine these tax cuts with our new voluntary paid family leave program, it’s clear New Hampshire is the envy of the nation.”
Sununu’s opponent in the general election, state Sen. Tom Sherman, did not respond to a request for comment.
During the COVID-19 crisis, 22 states borrowed from the federal government to help cover their unemployment payments. And, Juvet noted, while the Granite State’s coffers are overflowing, four of those states — Illinois, California, Connecticut, and New York — are still paying off their debt to the feds.
Burke gave Sununu credit for planning ahead.
“This news is only possible thanks to the governor’s foresight to firm up the unemployment comp fund at the start of the pandemic more than two years ago. Because of that decisive action in 2020, we are here today with a 30 percent unemployment tax cut — the envy of states in the northeast, if not the country.”
House Majority Leader Osborne used the news to attack Democratic leadership in Washington, D.C.
“Joe Biden and his cronies in Washington have pushed us past the brink of recession, fueling rampant inflation and skyrocketing energy prices. The savings from this tax cut will allow employers to weather worsening economic conditions and save jobs in the process. While Democrats persist with the same failed policies that brought us these hardships, we will fight to make sure Granite Staters survive it. The stakes this November could not be higher.
“New Hampshire simply cannot afford to allow Democrats to turn Concord into Washington D.C.,” Osborne said.