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Tuesday, October 13, 2009

NH Jobs News Gets Worse

The Union Leader reports this morning:
New Hampshire's unemployment rate climbed to 7.2 percent in September and few industries escaped the undertow of dour economic trends.

The number of people out of work increased by 1,430 to 53,330, an estimated 24,540 more unemployed than in September 2008, the state reported yesterday.

The nation's unemployment rate crept to nearly 10 percent in September. The state's unemployment rate was 6.9 in August. It is now nearly double what it was a year ago at this time, according to New Hampshire Employment Security.
At the same time, Governor Lynch is dealing with the impact of the vague budget cuts imposed by the legislature a few months back:
State employees have rejected a tentative contract agreement with the state, by a vote of 2,708-1,875, opening the door for mass layoffs as early as this week.

"I am deeply disappointed the state employees union has rejected a contract that would have implemented furloughs and preserved jobs," Gov. John Lynch said in a written statement released last night.

Lynch said he will meet with department heads this morning to begin implementing plans for layoffs. Employees could be notified this week, with layoffs completed by the end of the month. …

Since the contract was voted down, the old contract will remain in effect until a new one is negotiated. Lynch will have to find another way to save the $25 million in personnel costs mandated by the Legislature.
In the meantime, the State’s unemployment compensation fund is going broke, reports the New Hampshire Business review:
The state’s unemployment compensation trust fund is going broke faster than anticipated, causing the state to borrow more, and possibly earlier, than expected from the federal government in order to continue to pay benefits to the jobless.

There is even a remote chance that unemployment-related payroll taxes on business – which are already scheduled to more than double over the next three years – might have to increase even higher.

The fund, which stood at $240 million at the beginning of last year, is projected to sink to $11 million at the end of this year. And since the fund is some $16 million lower than the last projection, “we will be lucky to be at more than zero” on Dec. 31, said Department of Employment Security Deputy Commissioner Darrell Gates.

The state had planned to borrow at least $100 million in any case from the federal government, but finishing in the black on New Year’s Eve is more than just a symbolic cause for celebration. If the state is forced to borrow before the end of the year, it has to pay interest on that loan, and pay it back a year earlier. And that, combined with some actions – or inactions – on the part of the federal government might force another tax increase.
It would appear the Governor and the Democratic majority in Concord need to start cleaning up their mess.

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