In response to the continued strengthening of New Hampshire's economy, Governor Maggie Hassan and Employment Security Commissioner George Copadis announced that all members present at yesterday's meeting of the Unemployment Insurance Advisory Council, composed of members of the business community, labor and the Legislature, voted to endorse the lowering of employer tax rates as well as a targeted increase in the weekly benefit amount for claimants filing for unemployment benefits. With the elimination of the last 0.5 percent emergency surcharge, employers will experience an estimated $29.9 million in tax savings over the course of 2014.
"At the height of the recession, both workers and employers had to make significant sacrifices in order to help New Hampshire's individuals and families through an extremely difficult time," Governor Hassan said. "With our economy continuing to show signs of improvement, we are now able to provide additional relief to businesses and those workers still struggling to secure employment. I thank the Unemployment Insurance Advisory Council for their support of these steps to lower taxes for employers and provide added support for our working families."
This move is in addition to an endorsement in August, 2012, by the Advisory Council to remove the first 0.5 percent emergency surcharge effective October 1, 2012. Yesterday's endorsement would remove the second 0.5 percent emergency surcharge and would lower the tax rate effective October 1, 2013. The Advisory Council also endorsed a proposal to increase the Weekly Benefit Amount (WBA) to claimants whose base-period wages fall in the mid-tiers (approximately 59 percent of claimants) by an estimated 1.32 percent (equaling a cost of approximately $1.29 million), which is subject to approval by the Legislature.
"The vote by the Advisory Council is a real testament to the confidence shared by the members in the strength of the New Hampshire economy," New Hampshire Employment Security Commissioner George Copadis stated. "We asked a great deal of the business community during the recession. Now, with the endorsement of the Advisory Council and the support of Governor Hassan, I will be removing the last of the emergency surcharges on business tax rates relied upon to fund the unemployment system. Simultaneously, while we move forward with lowering the tax rates, we are all in agreement that it is long overdue to consider a targeted increased in the weekly benefit amount. Our current average weekly benefit amount is near the bottom in New England, and while we did add some additional tiers in 2006, the rates have not been increased since 2002. I look forward to working with Governor Hassan and the Legislature on passing this proposal to increase benefits in the next session."
During the last recession, changes were made increasing employer tax rates and increasing the wage base from which those taxes are calculated, as well as requiring workers to go through a one-week waiting period before becoming eligible for benefits. As a result, New Hampshire's unemployment system was able to weather the recession remarkably well without incurring any interest charges caused by borrowing from the Federal government. Currently, 22 states are still repaying loans and interest to the Federal government as they were forced to borrow in order to be able to continue to pay benefits during the recession. The tax-rate reduction will take effect in the fourth quarter of 2013.
For additional information please contact New Hampshire Employment Security at (603) 228-4004.