It’s the heart of winter, and home sales in New Hampshire are hotter than a leprechaun on a Lucky Charms-fueled bender in Vegas. 

December typically is a slow home sales month, for obvious reasons. But in December, 2020, sales were up 25% over December, 2019, and sales volume was up 49%, according to data tracked by the New Hampshire Association of Realtors. 

A home spends an average of only 33 days on the market in New Hampshire, down 47.6% from the previous December. And the median sales price hit $349,900, up 16%.

In December of 2019, housing experts were concerned because the median home price rose to $299.999, just a dollar shy of $300,000. In a year, the median price rose by nearly $50.000.

And that price increase happened as new listings rose by 30%. People couldn’t put houses on the market quickly enough to meet demand. There was 2.4 months’ worth of supply in the housing market in December of 2019. A year later, that was down to 0.9 months.

Just five years ago, the median home price in New Hampshire was $249,800, fully $100,000 less than today’s median. 

Although urban coronavirus refugees pushed demand even higher in 2020, it was far outstripping supply long before the pandemic hit.

A state report issued in December noted that even though 2019 was the sixth year in a row to experience a growth in the number of housing units permitted by local governments, “the level of building activity continues to be less than half of the level at its peak in the early 2000s.”

Housing totals illustrate how slow the pace of new construction has been.

Hillsborough County, home to the state’s two largest cities, had 166,050 total housing units (single-family, multi-family, and manufactured) in 2010. In 2019, it had 174,824, an increase of only 8,774, or about 5.3%. 

Statewide, total housing units rose from 614,238 in 2010 to 646,889 in 2019, an increase of 32,651, or just 5.3%. 

For contrast, the U.S. Census Bureau measured the change in housing units from April, 2010 to July, 2019 (so the time frame is different from the state’s by a few months). The Census figures show the total number of housing units nationwide rising by 6.1% from 2010-2019. The increase in New Hampshire was only 4.5%, by the Census’ count.

Rental housing is also in short supply, suffering from a severe shortage of new construction. The good news in 2020 was that the vacancy rate roughly doubled. The bad news is that it was below 1% last year and rose to only 1.8% this year. 

A healthy rental vacancy rate is considered to be 5%. New Hampshire last had a vacancy rate above 5% in 2009 — during the recession. Rents rise every year, driven largely by the extreme shortage of units, especially in places that are experiencing stronger economic growth. 

Legislators have introduced several bills to try to address the problem. But many of the bills focus on incentives and subsidies, as if developers need prodding from the Legislature to get rich selling homes people are clamoring to buy. 

The best way to get more housing is to reduce local government restrictions on the construction of new housing. Until that is done, anything else is just window dressing. Really, really expensive window dressing.

This week, New Hampshire’s initial unemployment claims fell below 2,000 for the first time since March. And the state’s positive PCR coronavirus test rate edged up past 1% for the first time since the state started increasing its testing and calculating the percent-positive rate late this summer. Whether the state can keep the former trend going depends on how the latter is handled. 

It’s hard to overstate the importance of keeping the economy from sliding back into a recession. Contrary to the sentiments of delusional anti-capitalists who blithely assert that the economy can be sacrificed indefinitely for the purpose of crushing the virus, a thriving economy is a tremendous social good and ought to be a top governmental priority. 

When profits evaporate, so do jobs. When jobs evaporate, people suffer, especially those in the most vulnerable financial positions. 

As the National Institutes of Health has documented, people who lose their jobs suffer from higher stress and more medical ailments. As the Urban Institute documented after the last great recession:

“Being out of work for six months or more is associated with lower well-being among the long- term unemployed, their families, and their communities. Each week out of work means more lost income. The long-term unemployed also tend to earn less once they find new jobs. They tend to be in poorer health and have children with worse academic performance than similar workers who avoided unemployment. Communities with a higher share of long-term unemployed workers also tend to have higher rates of crime and violence.” 

Before the coronavirus hit New Hampshire, weekly unemployment claims were consistently below 1,000 per week. The state’s economy was an employment machine, allowing Granite Staters, both blue and white collar, to enjoy the dignity of work and self-sufficiency.

The lockdown caused unemployment claims to spike from 642 to 29,379 in a single week. Claims surpassed 30,000 for the next two weeks before starting to decline in April. As the economy slowly opened, unemployment claims fell and are now just under triple their pre-pandemic level (1,880 this week vs. 642 the week of March 14).

Some economic sectors remain in dire circumstances (think hospitality), but the economy as a whole has clawed its way back throughout the summer and is well positioned to continue growing. Locking down the economy again would be an economic and humanitarian disaster. 

In the second quarter, New Hampshire’s GDP declined by 36.9%. Another economic hit even close to that would devastate not just the state’s employers, but its non-profits, local governments, and the state budget. 

Businesses make the economy run, and the economy includes non-profits and government. Business profits make it possible for people to pay their mortgages and grocery bills, but also to pay their property taxes, donate to non-profits and churches, and generate the revenue that keeps schools open, roads maintained, and social services funded. 

Business taxes make up the largest single source of revenue for the state budget, accounting for $805.6 million of the state’s $2.6 billion in general and education fund revenue in 2019. The next-largest source, excluding property taxes retained locally, is the rooms and meals tax at $350.1 million. And of course strong rooms and meals tax revenue depends on a healthy hospitality industry. 

Other major taxes — the interest and dividends tax, the insurance tax, the communications tax, the tobacco tax — all depend on businesses to be successful and profitable. Even state liquor sales are business-dependent. The state doesn’t make liquor. It sells liquor and wine made by the private sector. 

Keeping the economy from collapsing again is mission critical for New Hampshire’s employers and for state and local governments. That’s why the governor’s order this week requiring restaurants to collect contact information from patrons was an encouraging sign. 

After several COVID-19 clusters associated with restaurants, the governor could have ordered restaurants closed, as some European countries are doing. Instead, at the request of the New Hampshire Restaurant Association, the governor ordered contact tracing. 

The goal of the order is two-fold. One, it reduces, if not ends, the state alerts that ask people who patronized a cluster-associated restaurant to come forward. Those alerts cause alarm and discourage people from going out to eat. They hurt all restaurants, which hurts the entire industry, making it more likely that struggling restaurants will close permanently. They also hurt the state budget by reducing rooms and meals tax revenue. 

Two, the order allows for quicker contact tracing, which can curtail the spread of the virus, helping to avoid other clusters or outbreaks. That, in turn, helps keep the broader economy open. 

COVID-19 infections, hospitalizations and deaths are expected to continue rising this fall and winter. The state’s response must not be a broad economic shutdown. They are devastating, and if Europe is an indication they are likely to be ineffective as people revolt against their restrictions. If another lockdown is to be avoided, the state and the people have to focus on suppressing clusters and outbreaks. 

The state can do only so much if people don’t take responsibility for their own behavior. As with most any other government intrusion in the name of public health, safety or welfare, if individuals decide to do their share, there will be less for the government to do on their behalf.

Like a good horror movie villain that just won’t die, the minimum wage has risen again. It reemerged in the presidential debate on October 21, and the same legislator who introduced the $15 minimum wage bill vetoed this year by Gov. Chris Sununu has filed another minimum wage bill for next year. 

In the presidential debate, the moderator surprisingly acknowledged the cost of higher minimum wages in her question to former Vice President Joe Biden.

“We are talking a lot about struggling small businesses and business owners these days. Do you think this is the right time to ask them to raise the minimum wage or support a federal $15 minimum wage?”

That was a good framing of the question. Biden gave a confusing answer. 

“I do,” Biden said. “Because I think that one of the things we’re going to have to do is we’re going to have to bail them out too. We should be bailing them out now, those small businesses. You’ve got one in six of them going under. They’re not going to be able to make it back.”

It’s unclear how “bailing out” businesses relates to the minimum wage, unless Biden meant that the federal government is already spending money to keep businesses alive so it might as well spend more to keep alive those that would be harmed by a federal $15 minimum wage law.

Biden went on to say, in response to an assertion from President Trump, “there is no evidence that when you raise the minimum wage business go out of business. That is simply not true.”

Ah, but it is true. 

A 2017 Harvard Business School study found that higher minimum wages result in restaurant closures.   

A 2018 U.S. Census Bureau study of manufacturers over 23 years found that “when wage rates increase, establishments are more likely to exit the market.” It also found that increases in the minimum wage led to reduction in hours worked and increases in automation. 

A 2019 National Bureau of Economic Research study found that “increases in the federal minimum wage worsen the financial health of small businesses in the affected states.… Increases in the minimum wage also lead to lower bank credit, higher loan defaults, lower employment, a lower entry and a higher exit rate for small businesses.”

The theory behind the minimum wage is that greedy capitalists sitting on piles of cash are exploiting workers and therefore must be forced to share their wealth. In reality, businesses fight to survive in highly competitive markets, and artificial wage floors often hurt both the businesses and the people they were intended to help. 

A 2019 UC-Irvine study found that minimum wage increases caused slower employment growth in California’s restaurant industry, with significantly larger effects in low-income neighborhoods.

The Congressional Budget Office just last year concluded that “the net effect of a minimum-wage increase is to reduce average family income” because “workers lose their jobs and business owners must absorb at least some of the higher costs of labor.”

It further concluded that higher minimum wages increase unemployment. “By increasing the cost of employing low-wage workers, a higher minimum wage generally leads employers to reduce the size of their workforce.”

The question to Biden from ABC News debate moderator Kristen Welker got the issue right. Minimum wage increases do strain small businesses, and that strain would be even more acute as businesses struggle with revenue losses caused by the pandemic and government restrictions on economic activity. 

The service industry has taken a financial beating during the pandemic. It’s a major reason for what Biden and others have called the K-shaped recovery. As the economy has picked back up, employment has lagged in sectors that employ a lot of lower-wage workers, such as restaurants. Among the hardest-hit businesses during the pandemic have been restaurants and movie theaters, both of which pay many employees at or near the minimum wage. 

If politicians want to guarantee larger-scale restaurant and theater closures, and permanent job losses for many in the service sector who have endured temporary unemployment during 2020, a $15 minimum wage would do the trick. 

The No. 1 reason people move to or stay in New Hampshire is not jobs or low taxes or the environment. It’s family, according to University of New Hampshire Granite State Poll results summarized in the New Hampshire Housing Finance Authority’s October Housing Market Report. 

New Hampshire’s strong economy gives our extended family members plenty of options for employment should they decide to stay or return home. Maintaining a vibrant economy is a way of keeping our families connected and close. But the other essential part of this equation is missing — where are they going to live? 

The coronavirus pandemic has made New Hampshire’s acute housing shortage even worse, data from the New Hampshire Housing Finance Authority (NHFA) show. 

Multiple news organizations have documented the run on houses in New Hampshire, Vermont and Maine as people flee cities for the safety of rural and suburban spaces with low infection rates. That surge in purchasers has spiked New Hampshire’s already high demand, driving prices to record levels. 

New Hampshire’s median home price reached a new peak of $335,000 in August, a 14% increase since last August, NHFA tracking shows. Sales are down 6% since January. Those numbers “reflect extremely low inventory levels, not a lack of demand,” the NHFA concludes.

“September 2020 listings in total have dropped 27% when compared to September 2019. As prices continue to rise, listings under $300,000 become scarcer; the number of homes below this price have decreased 37% from last year,” the authority’s October report details.

In September, there was less than a month’s supply of homes priced under $300,000 in the entire state. 

To put it another way, your child who wants to move home from Boston or Raleigh or Silicon Valley might have to keep that big-city salary just to afford a house in New Hampshire. 

The housing shortage is tighter this fall even though building permits for single-family homes rose by 24% from January through August. New Hampshire’s housing stock is so low that it will be years before we come close to building enough homes to satisfy demand. 

For rentals, the picture is even worse. Building permits for multi-family homes fell by 61% from January through August. As demand has surged, communities have clamped down on new apartment construction (or builders have given up even applying). 

For example, Bedford’s planning board in September rejected a proposal to build 200 market-rate luxury apartments in the town’s commercial zone on South River Road. Though the apartments would have brought more tax revenue and less traffic than a commercial development previously approved for the same lot, and would have made the town a profit after school and public safety costs were deducted, the board rejected it. Board members didn’t want more apartments, even though the data showed that apartments would have left the town financially better off than commercial development.  

Because local regulators continue to artificially restrict the supply of rental housing, rents keep rising. The median monthly rent for a two-bedroom apartment in New Hampshire rose 4.9% in the past year, to $1,413, NHFA data show. The state’s rental vacancy rate has risen a bit but remains below 2%. 

All of this means that if your children and parents want to move back to town, they will struggle to find a home. 

The NHFA’s report shows that almost three-fourths (73%) of New Hampshire home buyers are Granite Staters moving to another home within the state. High prices inflated by a severe shortage of new construction do not primarily hurt out-of-staters who want to move here for jobs. They primarily hurt Granite Staters. 

They also hurt New Hampshire employers. Fidelity and Sig Sauer this week announced expansions that would create more than 700 new jobs in the state. The shortage of housing in Southern New Hampshire will make it harder for those companies to fill those positions.  

New Hampshire’s families, workers and employers are in desperate need of new home construction, both owner-occupied and rentals. The situation has been worsening for years. At what point do all three go to their local boards and demand that they get out of the way and let builders build?

Massachusetts’ June 1 ban on the sale of flavored cigarettes is driving higher sales, and higher tax revenue, in New Hampshire, state and retailer data show. 

In Massachusetts, cigarette tax stamp sales fell vs. the same month in 2019 by 17.2% in June, 23.7% in July and 29.9% in August, the New England Convenience Store and Energy Marketers Association (NECSEMA) announced this week. 

In New Hampshire, cigarette tax stamp sales rose vs. the same month in 2019 by 55.8% in June, 27.3% in July and 17.2% in August, the association reported.

That’s a tax revenue gain of $16.48 million for New Hampshire and a loss of $31.88 million for Massachusetts. 

Those figures are for cigarette sales only and do not include other tobacco products or electronic cigarettes. 

Looking at all tobacco tax revenue, New Hampshire has seen large gains since the flavored cigarette ban took effect. 

Tobacco tax revenue in May was identical to the year before. Then in June it shot up by 43.3% over the prior year. Compared to the same month the year before, tobacco tax revenue was up by 12.1% in July,18.6% in August and a tremendous 56.8% in September. 

From June through September, New Hampshire tobacco tax revenue was up by $22.2 million over the same four months in 2019. The state’s new tax on electronic cigarettes does not account for this increase. The state collected a little more than $300,000 a month in e-cigarette taxes from June through September. 

State Department of Revenue Administration staff attribute significant tobacco tax spikes in March and April (24.8% and 30.6%, respectively) to smokers stocking up for the coronavirus lockdowns this spring. They believe the surge starting in June is driven by the Massachusetts ban.

“We think it has to be related to the menthol ban in Massachusetts, although we don’t have the data to affirmatively prove that,” Carollynn Lear, assistant commissioner of revenue, said.

The state Department of Revenue Administration doesn’t break down cigarette tax stamp revenue by type of cigarette. But convenience stores do, and their data tell the story. 

Among NECSEMA members, total cigarette sales in Massachusetts were down 24% in August but up 65% in New Hampshire and 17% in Rhode Island, the association reported this week. But flavored cigarette sales were up 91% in New Hampshire and 40% in Rhode Island in August. Flavored smokeless tobacco sales were up 175% in New Hampshire and 54% in Rhode Island in August, NECSEMA reported.

Predictably, the ban increased both cross-border sales and in-state crime. Convenience store owners in Boston said this week that street sales of now-illegal flavored cigarettes have become a nuisance.

Free-market organizations were not the only ones to predict that this would happen. Massachusetts officials predicted it too. 

The Massachusetts Multi-Agency Illegal Tobacco Task Force noted in its 2020 annual report, published in February, that it was considering the need for increased enforcement this year because “the Task Force expects there will be an increase in smuggling activity and black market sales” after the flavored tobacco ban begins. 

Exactly as expected, Massachusetts’ ban has ended the legal sale, but not the consumption, of flavored tobacco products in the state. As tobacco retailers and the state’s own Illegal Tobacco Task Force predicted, the ban has sent legal sales over the border and increased the criminal, black-market sale of flavored tobacco products in Massachusetts. 

If you want to become a police officer in New Hampshire, you have to undergo 684 hours of training at the N.H. Police Academy. That’s less than it takes to become a licensed barber, and less than half as long as to become a cosmetologist. 

Most people probably don’t think of police as being subject to occupational licensing, but that’s what the training and certification process amount to. And the level of training required to become a police officer is much less than is required for people entering many other occupations, none of which carry a gun and have the authority to use lethal force.

State law requires barbers to have 800 hours of training at barber school or 1,600 under the supervision of a licensed barber. We could be wrong, but we’re pretty sure no one’s ever been gunned down on the street by a hair dryer.

To become a cosmetologist requires “1,500 hours of training in a school of cosmetology” or 3,000 hours over two years under a licensed cosmetologist. 

That is, it takes 220% more hours of training to become a licensed cosmetologist in New Hampshire than it does to become a police officer. 

It takes a bachelor’s degree and 900 internship hours to become a licensed dietician.

It takes a four-year degree and three years of supervised professional experience to become a landscape architect. 

It takes 600 hours to become an esthetician, just 88 percent of a police officer’s required hours.

Either the required training period for police officers is low, or that of many other licensed occupations is far too high. Or both. 

One prospective to keep in mind when thinking about these requirements is that the state has an interest in maintaining a relative low barrier to entry for police officers. It’s hard enough to recruit officers in some communities. Raise the bar too high and artificial shortages will result.

Established and licensed occupations, on the other hand, have a strong incentive to erect high barriers to entry to reduce competition and artificially inflate wages. They regularly petition the Legislature to increase licensing requirements to produce these two effects. 

Additional hours of police training may or may not be needed. But when those hours are compared to training requirements in other occupations, it’s obvious that the discrepancy cannot be explained by the relative danger to the public posed by the particular occupation. The state needs to do more than rethink police training requirements. It needs to rethink the way it approaches all occupational license requirements.

Gov. Chris Sununu signed a bill this week to make permanent the emergency changes expanding telemedicine services. The restrictions on telemedicine were not primarily to protect patients. They were to protect medical providers from competition. When the state makes it illegal to see a Boston doctor via video, patients have to see their local physicians. 

Prohibitions on the practice of telemedicine are an extension of occupational licensing laws. Everyone knows you have to have a state medical license to practice medicine. But licensing laws also have prevented people from consulting online with doctors who are licensed in other states, even though technology makes this easy.

The percentage of occupations that require a state license has exploded, going from about 5% in the early 1950s to about 20% today. Economists have suspected that the growth in state occupational licensing laws has contributed to the decline in American mobility. If you’re licensed in one state, moving to another state can mean starting the licensing process all over again, as many states don’t recognize other state licenses. 

A study published this week by the National Bureau of Economic Research supports that theory, concluding that licensing could account for about 8 percent of the decline in mobility. 

Researchers Morris Kleiner of the University of Minnesota and Ming Xu of Queens University studied occupational license requirements in U.S. states from the 1980s through 2016. They found that “licensed workers are 24% less likely to switch occupations and 3% less likely to become unemployed in the following year.”

As they wrote, “occupational licensing has a strong and negative effect on worker labor market flows, but is associated with higher wage growth, whether a worker is staying in a licensed occupation or switching into a licensed occupation.”

The connection to higher wages has been well established. When the state erects a large barrier to entry for an occupation, thus restricting the supply of practitioners, compensation for that occupation rises. Who pays for that? Consumers do. And the costs outweigh the benefits.

“Existing studies have yet to find a definitive link between licensing restrictions and their stated purpose of improving service quality,” Utah State University researchers concluded in 2018. 

Though improved quality is not evident, the barrier to entry created by licensing laws is significant. Kleiner and Xu find that “occupational licensing represents a barrier to entry for both unemployed workers (1.2% lower entrance rate) and workers who enter from other occupations (24.1% lower entrance rate).”

So not only are occupational licensing laws increasing consumer costs without demonstrating improvements in service quality, they’re also harming the broader economy by reducing economic mobility. 

This hurts New Hampshire, which relies on migration for economic and population growth. New Hampshire has the second-lowest fertility rate in the nation (behind only Vermont). A UNH Carsey Institute analysis of Census data earlier this year showed that New Hampshire would have lost population in recent years were it not for people moving here from other states. 

Occupational licensing laws, both in New Hampshire and elsewhere, make it harder for people to move here and to find work if they do. That has a negative effect on our economic growth. 

We can add this to the long list of reasons why lawmakers should reform the state’s occupational licensing laws. 

Sometimes, the bills everyone is afraid to vote against are the ones we should worry about the most. The PFAS bill passed 23-1 in the Senate last week is a great example. 

If you haven’t followed the Saga of the State PFAS Standards,* well, you’re probably a normal human being with a happy life, and we’re sorry to bring it up. Just know that it’s less complicated than the plot of Twin Peaks, but more complicated than Bulgaria’s relationship with Turkish soap operas.

Because we know you’re rushing out the door to enjoy in-person restaurant dining before Shutdown II: Corona Boogaloo starts, we’ll try to keep this as short as a Looney Toons episode with all the violence removed. 

The state Senate recently bundled into House Bill 1246 a bunch of PFAS-related bills for rapid passage in the coronavirus-shortened legislative session. We’ll focus on just one section of this bill: the part that writes PFAS maximum contamination levels (MCLs) into law.

The bill adopts the MCLs issued by the state Department of Environmental Services last year. These standards are, to be diplomatic, of questionable scientific legitimacy. 

The allowed parts per trillion (yes, trillion) are many times lower than the Environmental Protection Agency’s guideline levels and are based on animal tests and a questionable model adopted by one state (Minnesota).

Moreover, the costs are enormous and the benefits unknown — despite the fact that the department was required by law to conduct a cost-benefit analysis. 

The department estimated the costs at $190 million. That’s a gigantic sum. Though the point of a cost-benefit analysis is to determine whether the benefits are worth the costs, the department offered only a qualitative, not a quantitative, analysis of the benefits. That is, it couldn’t put a price tag on the benefits it claimed would result from these lower levels. 

“Any rational interpretation of the statute requires more,” a judge ruled last November in a lawsuit challenging the inadequacy of the cost-benefit analysis. That lawsuit is pending before the state Supreme Court. 

In the absence of a quality state analysis, the New England Ratepayers Association hired an economist to do one. It estimated the benefits to range between $2.6 million and $8.0 million per year, far lower than the estimated costs of $11.6 million to $23.2 million per year.

Usually, legislators will wait for a court ruling before moving forward with legislation in situations like this. Not this time. 

Writing these incredibly low and costly MCLs into law now, before the Supreme Court has determined whether their adoption was done legally, is foolhardy. 

Writing them into law without having any evidence that the benefits will outweigh the costs is reckless. 

Writing them into law without really knowing whether levels that low and that expensive are absolutely necessary to protect public health is sloppy.

These are only some of the problems with one section of this PFAS bill.

Given the poor state of municipal and business budgets this year, adding these additional costs now will only push local governments further into the red. There’s a very real possibility that the cleanup costs associated with these mandates will combine with other budget difficulties to trigger property tax increases. 

Waiting six months for the economy to recover further and the Supreme Court to act would be the prudent move. (But this is politics. If you want prudence, buy The White Album.) 

Legislation this foolhardy, reckless and sloppy usually meets more than token opposition. But this bill is expected to pass easily next week. 

Maybe, a few years after it passes and municipalities have spent tens of millions of dollars to meet its mandates, triggering property tax increases, we’ll finally get that complete and legally required cost-benefit analysis from the department.

*Rumored to be the title of Bob Dylan’s new 37-minute-long single. 

Institutions and those entrusted with their care have beclowned themselves so regularly over the years that Americans have lost faith in almost all sources of authority. In this environment, the New Hampshire Senate this week surveyed the cultural scene and said, “hold my beer.”

It’s hard to say what will be hurt most by the unemployment legislation the Senate’s Democratic majority passed on a party-line vote on Tuesday: New Hampshire businesses or the reputation of the New Hampshire Senate.

House Bill 1166, a hodgepodge of business mandates and impermissible exemptions to federal unemployment policy, is an absurdity that defies all attempts at reasonable explanation. In its totality, it is a stunning example of politicians choosing showmanship over the public official’s duty to govern.

On its face, the bill is a direct assault on New Hampshire businesses struggling to survive the coronavirus-caused recession. It would cost New Hampshire employers hundreds of millions of dollars, potentially triggering numerous business closures.

“I feel it kicks the businesses while they are down,” Wendy Hunt, president of the Greater Merrimack-Souhegan Valley Chamber of Commerce, wrote in testimony submitted to the Senate Commerce Committee. “It is the OPPOSITE of what the legislature should be doing for our business community.”

If it becomes law, the bill would burden employers with higher costs. But  some of the worst parts of the bill would have a limited effect because they are really a publicity stunt disguised as legislation. The very legislators who champion the bill as a necessary protection for New Hampshire workers inserted a provision to prevent many of those alleged protections from taking effect.

Huge costs and violations of federal labor policy 

At the Senate Commerce Committee on June 5, Deputy Employment Security Commissioner Richard Lavers explained how the bill’s excessively generous rewriting of state law on unemployment benefits would violate federal guidance, putting the state out of compliance with U.S. Department of Labor policy and causing the loss of federal money.

The bill lets an employee remain eligible for unemployment benefits if he or she “leaves employment due to a reasonable risk of exposure or infection, including self-quarantine, or to care for a family member, and either does not intend to return to the employer or the employer will not allow the individual to return.”

Federal guidance states that employees able and available to work are not eligible for benefits. The bill would let employees collect unemployment if they are able and available, and even if they do “not intend to return to work.”

“This one is not allowed,” Lavers told the committee. The eligibility provision “would also have what I assume is an unintended consequence of taking people that are now eligible for federally paid PUA and putting them on state UI that would have to be paid out of the state trust fund.”

That is, the bill moves people from federal Pandemic Unemployment Assistance to state-paid unemployment insurance benefits, causing a more rapid depletion of the state Unemployment Trust Fund, which is already expected to run out of funds by the end of November.

The bill also would make employees automatically eligible for unemployment benefits for certain COVID-19-related reasons, again in violation of U.S. Department of Labor guidance, and eliminate the one-week waiting period before benefits start.

“The main issue is that this provision, and I’m not speculating here at all, I’m not relying upon old guidance from the federal government, I’m relying on guidance issued one month ago today issued by the Department of Labor. This provision would make New Hampshire be out of compliance with U.S. Department of Labor, and we would be out of conformity with U.S. Department of Labor,” Lavers told the committee.

“That puts our federal grant funding in jeopardy.” he explained.

Going out of compliance with federal guidance “would mean that New Hampshire employers would no longer be eligible for their 90% reduction in their federal unemployment tax obligations,” Lavers said. “This would cost New Hampshire businesses over $200 million a year…. This is what they are telling states. They are cautioning states: Don’t do this.”

The committee’s response to these warnings was to insert a self-destruct button into the bill.

“In the event the United States Department of Labor provides a written notice to the New Hampshire department of employment security that any specific statutory change in this act will result in the loss of federal funding to New Hampshire then that specific statutory change, and that specific statutory change only, shall be inoperative,” an amendment introduced by Sen. Jon Morgan reads.

The “inoperative” clause is a case study in political cynicism. It could have one of only two outcomes. Either it makes those provisions instantly ineffective, in which case there’s zero point in passing them, or it makes them effective only for a brief period until an inevitable federal notice arrives, in which case there’s zero point in passing them.

No one seems to have checked with staff attorneys to find out how the provision would work. We did.

The language does not make the provisions Lavers warned about automatically inoperative based on guidance already issued by the Department of Labor. It would make them inoperative only after the U.S. Department of Labor issues additional written notice to the state, according to legislative staff.

So the self-destruct button would be triggered only after the bill had begun to damage the economy.

This is not governing. This is playing politics with New Hampshire’s economy.

Diverting $50 million from COVID-19 relief to a state department

The political games don’t end there.

The bill directs $50 million in federal CARES Act relief money to the Department of Employment Security for the purpose of upgrading its computer system. 

But the department does not need or want the money. Its system was already upgraded with federal funds.

“New Hampshire is one of 16 states with a modernized unemployment benefits system,” Lavers told the Senate Commerce Committee on June 5. 

The department replaced its computer system in 2009 and has enhanced it every year since with federal grant money, he said. 

“We were paying benefits under the CARES Act before the CARES Act existed because of our modernized system,” Lavers said. “We do not need money for this purpose from the limited amount of money that are left in the CARES funds.”

Why in the world would Senate Democrats divert $50 million in coronavirus relief money to upgrade a computer system the that was already upgraded with federal money?

It turns out that Sen. Dan Feltes, who co-sponsored the legislation, has made upgrading that computer system part of his gubernatorial campaign. He claimed in April, without evidence, that the governor failed to upgrade the system that the department says is fully upgraded. 

More ignored warnings

The remainder of the bill is filled with provisions that senators were warned would hurt New Hampshire individuals and businesses.

Tyler Brannon, director of health economics at the N.H. Department of Insurance, told the Senate Commerce Committee that the provision mandating private insurance coverage for COVID-19 treatment and testing was unnecessary and would help unscrupulous companies at the expense of Granite Staters. 

Insurers already voluntarily cover COVID-19 testing and treatment at no cost, and the state’s emergency order mandates coverage for out-of-network providers if no in-network providers are available. 

The bill goes further to mandate coverage for out-of-network providers at any time and force insurers to cover “any out-of-network charges.”

“The requirement will allow for price gouging by out-of-network providers, and it’s likely to benefit opportunistic, out-of-state companies at the expense of New Hampshire premium payers more than it is going to benefit New Hampshire members,” Brannon explained.

His warning was ignored and the provision was left in.

Another provision extends the federal Family and Medical Leave Act to businesses with as few as 15 employees “for any employee in quarantine, or covered family member in quarantine, for coronavirus or COVID-19, or for a COVID-19 related reason, as directed by a medical provider or under government direction.” 

Not even Congress would force businesses smaller than 50 employees to bear the costs of the Family and Medical Leave Act. This provision could impose significant costs on small, mom-and-pop businesses that have only a few employees.

With a laundry list of additional costs being dumped on employers even before many are allowed to open at full capacity, the bill drew sharp criticism from business owners and groups. 

The bill “will cause a significant increase to unemployment insurance taxes right when businesses are stretched thin and face significant losses already,” Ashley Haseltine, president of the Derry Londonderry Chamber of Commerce wrote.

Chris Woods, president of Advantage Insurance in Merrimack, submitted written committee testimony that the bill “will cost NH businesses who are already struggling additional money while incenting individuals to not go back to work.”

The Senate’s only response to these warnings came Tuesday when two Democratic senators, Sen. Shannon Chandley and Sen. Jeanne Dietsch, voted with Republicans to strip a provision mandating an additional $100 a week in unemployment benefits. That provision would have cost N.H. employers $53 million through the end of 2020 alone, the Department of Employment Security estimated.

The exact costs of the bill are not clear. As with other amended bills rushed through on Tuesday, it contained no fiscal note. 

New Hampshire employers are struggling to survive an economically devastating 2020. They, and the employees they want to rehire, deserve lawmakers who take this moment seriously and who seek to help. Instead, senators are playing tricks with exploding bills and vanishing promises. 

In a contentious return to in-person legislating Thursday, House Republicans and Democrats traded barbs and accusations and got little accomplished. But they did agree on one thing — beer.

Representatives voted 243-92 to approve House Bill 1717, a bill to permit bars and restaurants to sell draft beer in growlers during a declared state of emergency. 

This was the first suggestion made in the Josiah Bartlett Center’s report on how to help restaurants survive the emergency shutdown orders, released in April. 

Our report explained that bars and restaurants were left with thousands of dollars worth of keg beer they couldn’t sell under emergency restrictions because state law forbade them from selling draft beer in any kind of to-go container, including growlers. Growlers are glass beer bottles, typically 64 ounces, with screw-on caps.

HB 1717, introduced by Rep. Andrew Prout, R-Hudson, also allows bars and restaurants to fill growlers with a different beer than is on the growler label. Normally, restaurants have to match the beverage to the label on the container, for obvious reasons. This exception lets bartenders fulfill a customer’s request to, say, fill a Shipyard Brewery growler with a Poppy’s Moonship On Blackberry ale by Schilling Beer Co. 

This change would’ve helped restaurants over the last three months had it come in an emergency order. Beer that was on tap in March and early April already has been poured out. Massachusetts beat New Hampshire to this and allowed growler sales in March. 

It’s a shame this legislation comes just as the stay-home order is set to be lifted, but it’s encouraging that a majority of representatives see the need for it. 

The next step is to remove the restriction tying growler-filling to an emergency order. State law already allows patrons to take home opened bottles of wine, provided they are kept out of the reach of the driver. It also allows individuals to purchase filled growlers direct from breweries. There’s no justification for prohibiting growler sales at restaurants.