This story was originally produced by the Keene Sentinel. NHPR is republishing it in partnership with the Granite State News Collaborative.
Gov. Chris Sununu has vetoed a bill the Legislature passed that would have prevented the state from collecting interest on overpayments of unemployment compensation.
“Without the accrual of interest, individuals do not have an incentive to pay these funds back,” the Republican governor said in his veto message Friday. “In other words, this bill would allow ineligible beneficiaries to get an interest-free loan on the backs of New Hampshire employers."
The state is attempting to recoup $6 million in overpayments incurred between 2017 and 2022.
"If Senate Bill 42 were to be signed, this would be nearly impossible to accomplish,” Sununu said.
Employers largely fund the unemployment system, and the state needs to be accountable for the money paid out in benefits, the governor said.
Under the bill, the state still would have been allowed to charge interest to unemployment compensation recipients who intentionally committed fraud.
Sen. Becky Whitley, a Democrat from Hopkinton, strongly objected to the veto.
“It is appalling that the governor has chosen to veto such a bipartisan and vital piece of legislation that would have helped so many Granite Staters during an incredibly trying time in their lives,” she said in a prepared statement.
“The COVID-19 pandemic resulted in significant job loss for many of our residents, most severely in our service and health care sectors — sectors with workers who are predominantly women.”
The New Hampshire Senate passed Senate Bill 42 on a voice vote on Feb. 9, and the House passed it 196-178 on June 8.
Richard Lavers, deputy commissioner of New Hampshire Employment Security, said present law allows the state to eventually charge 1% interest monthly on owed principal.
As an example of someone collecting too much unemployment compensation, he described a scenario where someone fails to report a bonus or severance pay received after being laid off.
People getting unemployment compensation are required to report weekly any money they have received. Most of the outstanding overpayment money was accrued early in the pandemic when unemployment compensation claims spiked, Lavers said.
“I think most people understand that you should not be providing inaccurate information in order to manipulate a government program,” he said. “When you get caught, being required to repay the benefits you received together with interest is reasonable.”
Whitley doesn’t buy it.
“To imply that these individuals — who did their best to work in a flawed and rushed system, after losing their jobs and needing to pay their rent and buy food — purposely manipulated the system is a troubling and deeply unfair characterization,” she said. “To be crystal clear, this bill will only eliminate interest on overpayments where fraud was not present.”
She noted that federal unemployment benefits aren’t subject to interest payments in cases of overcompensation. Most states also don’t assess such interest, she pointed out.
“The true reality of the situation is that businesses that paid into the unemployment system received millions of dollars in loans during the pandemic that they never had to pay back,” Whitley added.
“It is regrettable and totally heartbreaking that the governor failed to stand up for Granite Staters during some of the most difficult periods of their lives.”
New Hampshire businesses received $3.4 billion in federal Paycheck Protection Program loans, according to the nonprofit FederalPay.org, which tracks federal spending. Terms of such loans allowed companies to avoid repaying most of this money.
Sen. Tim Lang, a Republican from Sanbornton, said Monday he didn’t understand the governor’s veto message and wants to talk to state Employment Security officials to better understand the situation.
Lang said charging interest to recipients who thought they correctly reported their income “is kind of like rubbing salt in a wound.”
In New Hampshire, a two-thirds vote of both the House and Senate is required to override a veto.
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