Week Twenty-Three - June 26, 2009

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

Finished, Done. Thank Goodness.

Budget

The House and Senate have officially adjourned to the Call of The Chair for the rest of calendar year 2009. Prior to adjourning, both bodies passed the budget for FY 2010-2011, and agreed on many committee of conference reports.

How did we, the business community fair this week? Not bad – it could have been far worse.

What was the outcome of the final budget?

• Increases rooms and meals tax from 8% to 9%.
• Includes for the first time, private campgrounds in the rooms and meals tax.
• Distribution from LLC’s, partnerships and associations will be subject to the interest and dividends tax (5%) to the same extent that distributions to corporate shareholders are taxable as dividends.
• Increases tobacco tax by $.45/pack.
• Increases car registrations by $30, plus a new surcharge based on weight.
• Doubles boat registration fees.
• Taxes all gambling winnings over $600 at 10%. This includes any and all winnings in NH, and any other winnings out-of-state by NH residents.
• 1/2 of LCHIP dedicated funds will go to General Fund in 2011.
• $110 million taken from the medical malpractice funds and transferred to General Fund.
• Takes $70 million from the rainy day fund.
• Increases by $75 million funds to welfare caseloads.
• Bonds $90 million in school building aid.
• Fully funds education aid.
• Lays off or furloughs state workers to the tune of $25 million in savings.
• Local communities lose $50 million reserve sharing funds.
• Funds to charter schools increase by $7 million annually.
• State retirees under 65 will pay a premium for their state provided health care.

The final vote in the Senate was 13-11 to pass the budget. It was not a totally partisan vote as the two Manchester Democratic senators voted with the minority against the budget while one moderate Republican voted with the majority to pass the budget.

In the House the vote was 202-183, not quite as close as many predicted. Again, some of each party crossed lines.

The budget was a stressful vote for almost everyone. In these tough economic times, everyone had to give and therefore there was something for everyone not to like. But on balance, it is a budget in which everyone shares some of the pain, unlike other years when the pain has been disproportionate. The Governor was very firm that he would not support a sales or income tax, nor was he ready for gambling. With those three options off the table, it was either capital gains tax, inheritance tax, remove the BET credit, entertainment tax, refinancing tax or change certain tax provisions and cut spending. The latter won. In addition, a number of items were moved from the General Fund ledger in order to balance the budget without more cuts or increased revenue. The school construction aid was bonded and the liquor stores are becoming more self-sustaining.

Our local legislators had a tough choice, given the scenario described above. While the Chamber had deep concerns about placing additional tax burdens on LLC entities, and about the increased Rooms & Meals tax, we also recognize that if the budget had been killed and a new alternative budget explored, any alternative budget would have likely looked far worse to businesses than did the budget that eventually passed this week.

There is no question state budget issues will continue to be a concern in FY 2010; all eyes will be on projected revenues over the coming year, and they likely will continue to be a problem as we try to pull out of the economic malaise. We’re betting more cuts will have to be made in the coming months. Stay tuned.

NH Duty to Warn

SB 40, the state’s version of the Federal Duty to Warn for mass layoffs is now on the way to the Governor. The House and Senate agreed on the 75-employee business threshold and upon removing some of the troubling parent liability language that was of critical concern to us. The bottom line is the final legislation is far better than it started for the business community, even though we were not able to have the NH threshold mirror the Federal threshold.

Your Chamber played the leading role amongst all business associations in trying to get this legislation to a point where it would balance the concerns of both employers and employees. This bill started the session with a full head of steam and was destined to be fast-tracked – it had 18 senators signed on as co-sponsors, the Commissioner of Labor had invested his entire political capital into passing the bill. With this in mind, your Chamber went to work and invested much of our own capital, resources, and time into educating our legislators on the real impacts this bill would have. In the end, we were able to remove the most egregious parts of the bill relating to personal liability and piercing of the corporate veil. There are still some components of this bill that give us heartburn, but thanks to your Chamber’s work and that of companies like BAE Systems, Skillsoft, Micronetics, and Sparton Technology, the version that is going to the Governor’s desk is far better than what was originally championed by the Commissioner of Labor and the bill’s prime sponsor.

Final Note

There are a number of concerning pieces of legislation that have been retained, which will be worked on prior to the beginning of the January 2010 session. We do not expect any action on these other bills to begin before August.

So, enjoy July! Here’s hoping that, now that the budget process is over, the sun will shine.

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