Jonathan P. Baird

‘Have we got a deal for you.” These are not words you typically expect to hear from state government. However, when it comes to unemployment benefits, the words ring absolutely true.
New Hampshire’s unemployment trust fund stands to gain almost $21 million if a bill sponsored by Sen. Maggie Hassan, SB 144, becomes law. The money comes from incentive funding under the Unemployment Insurance Modernization Act, which was part of President Obama’s stimulus package.
How this works is quite ingenious. New Hampshire and other states will get money if they take certain qualifying steps to modernize their unemployment systems. Over the years, many states passively watched as the percentage of unemployed workers becoming eligible for unemployment benefits precipitously dipped. Women, low-wage and part-time workers were the most adversely affected.
The Unemployment Insurance Modernization Act offered states financial incentives for doing the right thing: changing eligibility rules so that a more inclusive group of unemployed workers can qualify. Money becomes available to a state if it completes three reforms off a smorgasbord list of positive changes.
New Hampshire already has a jump start on qualifying for the modernization money. Two of the three necessary reforms have been accomplished.
More than 10 years ago, the Legislature passed the alternative base period, which allows more recent earnings to count toward financial eligibility. The fact that the alternative base period is law entitles New Hampshire to an immediate $10.4 million trust fund infusion under the stimulus.
Last year, the Legislature allowed part-time workers to collect. This reform was a second qualifying legislative enactment. New Hampshire needs one more progressive reform to access the over $20 million incentive funding.
This is where Hassan’s legisla
tion comes in. Originally designed to address a narrow circumstance around job terminations due to a non-work-related injury, Hassan’s bill has been amended to allow New Hampshire a chance to get the $20 million.
The amended bill makes two adjustments to the rules around quitting a job due to a compelling family reason. First, a worker could be eligible for benefits if the reason for the quit was illness or disability of an immediate family member. Second, a worker who accompanies a spouse to a new location from which it is impractical to commute could also qualify. Both scenarios have historically been considered voluntary quits and disqualifying.
These family-friendly adjustments have merit standing alone. Both changes are consistent with the bedrock principle of unemployment law that all workers who become unemployed through no fault of their own should be able to collect. Rather than individual employers being charged for benefits paid under these provisions, the trust fund will cover the cost.
Hassan’s bill would fully qualify the state for the additional modernization money. The compelling family reason provision also requires coverage for victims of domestic violence who had to leave their jobs due to abuse. New Hampshire law has provided for that for over a decade.
The state Department of Employment Security supports Hassan’s bill and has carefully priced out the cost of the reform. Officials estimate the cost of the trailing spouse provision as almost $175,000 a year. The ill family member provision cost estimate is $160,00 a year.
If the unemployment trust fund received $20 million, Employment Security estimates the annual interest earned on that money would be $900,000. The interest alone would more than cover the cost of these reforms.
With a worsening recession, the state needs adequate money in its unemployment trust fund to be sure it can meet its obligation to the working people of our state. The modernization money shores up the fund at a critical time of expanded need.
Opponents of taking federal stimulus money like Louisiana Gov. Bobby Jindal and Mississippi Gov. Haley Barbour have argued that modernizing their unemployment systems will raise taxes on employers. The opposite is actually true. More stimulus money in the fund decreases the likelihood of an employer tax increase. In many states, the modernization funds will avert mandatory tax increases that happen when their unemployment funds drop below specified levels.
We are living with the marvelous results of the Bush-era free market and its do-nothing approach to unemployment insurance. Ignore workers for eight years, promise trickle-down benefits that never materialize and never speak about the unemployed. Out of sight, out of mind.
Unemployment modernization is a win-win proposition. The state gets federal money for carrying out reforms that help especially needy working families. Now there is a novel concept perfectly suited to these times.