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Unemployment benefit increase debated; department models larger payouts and possible trust‑fund effects
Summary
Committee heard testimony and department modeling on HB 542 (increase to weekly unemployment benefits). The Department of Employment Security outlined projected benefit‑pay increases under the bill as introduced, and asked for time to model a scaled amendment; the hearing was recessed for further analysis.
The House Labor Committee recessed its hearing on HB 542, a bill that would raise the state’s maximum weekly unemployment benefit, after extensive testimony from Representative Mark McKenzie (sponsor), business and advocacy groups, and a detailed presentation from the Department of Employment Security about projected costs and solvency risks.
Deputy Commissioner Richard Labors told the committee that the current maximum weekly benefit in New Hampshire is $427, a level unchanged since benefits were last raised in 2007. Under the bill as introduced — which would add 12 higher benefit tiers up to a $669 maximum — the department modeled 2023 and 2024 claim populations and found total benefit payouts would have increased by roughly 28% (about $10 million) in 2023 and 31% (about $14.6 million) in 2024 had the bill been in effect.
Labors also ran stress tests against three economic scenarios. Under current economic forecasts (no recession), the department estimated the trust fund balance would fall by roughly $21 million by year‑end 2026 versus baseline. Under a mild recession scenario (unemployment rising to about 4.5%) the trust fund could be reduced by $64 million in 2026 and $87 million in 2027, and would cause employer tax increases of roughly $26 million in 2027 due to losing fund‑balance rate reductions. In a major recession scenario (unemployment to approximately 6.5%) the department projected the trust fund could go negative, requiring federal borrowing — historically costly to employers and taxpayers.
Business groups including the National Federation of Independent Business and small‑business speakers told the committee they worry about automatic increases in employer UI tax rates if the trust fund deteriorates. Labor and community advocates urged higher benefits to keep pace with wages and inflation and pointed to New Hampshire’s position near the bottom of the region on maximum weekly benefit amounts.
The sponsor said an amendment was forthcoming that would add six rather than 12 tiers; Labors agreed to model the amendment once filed. The committee recessed the hearing to allow the department to return with estimates for the amended proposal.
Ending: The committee recessed the HB 542 hearing pending the department’s updated modeling of the 6‑tier amendment; members asked for a follow‑up hearing in the near term to review fiscal and solvency impacts.
