Officials say N.H. shutdown fix could irk federal government

  • The New Hampshire State House in Concord on Oct. 4, 2018 Sarah Pearson

Monitor staff
Published: 1/22/2019 6:10:28 PM

A month into the federal government shutdown, Senate President Donna Soucy and House Speaker Steve Shurtleff say they’re looking for a New Hampshire fix.

As Transportation Security Administration workers and air traffic controllers continue to show up to work without pay, the state’s Democratic leaders are exploring legislation to allow all unpaid workers to collect unemployment insurance until the shutdown is resolved.

But doing so could also risk irking the federal government and could invite a string of repercussions for the state, according to the Richard Lavers, Deputy Commissioner of the Department of Employment Security. In recent weeks, the U.S. Department of Labor, which distributes federal unemployment insurance funds, has attempted to discourage states from taking the approach.

The potential move, floated Monday in a joint statement by Soucy and Shurtleff, would likely require fast-tracked legislation. But Shurtleff said the situation demanded dire action.

“Myself and President Soucy just want to see New Hampshire be proactive,” he said in an interview Tuesday. “We’re all hoping this ends soon.”

Since Dec. 22, around 800,000 federal workers have seen their wages frozen after a spending impasse in Washington over a proposed border wall. In New Hampshire, around 2,400 workers have been affected by furloughs, according to the Department of Employment Security.

Some have been sent home. Others in more essential roles, like TSA agents and air traffic controllers, have been required to come to work without pay. On Friday, furloughed workers are set to miss their second paycheck in a month.

All 2,400 workers in New Hampshire have stopped receiving pay. But the effects have not been felt equally.

Under New Hampshire law and federal guidelines, the state provides unemployment insurance for anyone not providing services and not payable for services. Furloughed federal workers sent home are eligible for unemployment, but those still working will receive nothing until the government reopens and the workers are provided backpay.

Now, Shurtleff and Soucy are seeking to change the state law to open up the benefits to all furloughed employees, working or not. Though the legislative filing deadline has passed, Shurtleff said a bill could be introduced through the House Labor Committee and whisked through the Legislative process in a matter of weeks.

But for the state, it’s a potentially confrontational path. On Jan. 18, the federal Department of Labor sent a letter to state agencies responsible for unemployment benefits urging them to stay the course. Unemployment benefits for fully-furloughed workers should be paid out; benefits for “full-time excepted federal workers” – those continuing to show up to work – should not, the agency said.

Going ahead could mean a loss of federal support down the line, according to the letter.

“States are cautioned that Federal funding for administrative costs or any unemployment benefits paid by the states to such workers will be unavailable,” the letter, written by Gay Gilbert, administrator of the Office of Unemployment Insurance, stated. “States should not use Federal funds for this purpose and should not expect Federal reimbursement or assistance with regard to recovery any benefit payments when the lapse in appropriations ends.”

The federal-state tensions are already being felt in California. On Jan. 11, Democratic Gov. Gavin Newsom announced that the state would provide unemployment insurance to all furloughed federal workers through executive order, defying an earlier Department of Labor letter informing the state it could not do it. It is unclear what, if any, action the federal department has taken in response.

Lavers said a rift between the governments could have additional collateral impact on business taxes. Presently, New Hampshire businesses that pay state unemployment tax receive a federal discount of 90 percent on federal taxes. If New Hampshire were found to be out of conformity, businesses could lose out on that discount, Lavers said.

But Senate Majority Leader Dan Feltes, a key architect of the potential legislation, stressed that nothing was final and that the caucus would “continue to explore every avenue to help Granite Staters who are without a paycheck.”

“We are disappointed to see the Trump Administration threaten states that are looking for ways to help their workers, including those who are volunteering their time,” the Concord Democrat said.

A spokesman for the U.S. Department of Labor was not available Tuesday for comment.

On Tuesday, reaction to the proposal by Gov. Chris Sununu was muted.

“Governor Sununu will be interested to see what the legislature proposes, but the bottom line is the responsibility still falls on Washington to act like adults and do their job,” a spokesman for Sununu, Ben Vihstadt, said in a statement.

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