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NHGOP lawmakers push student loan waiver for local industry

This article originally appeared on JBartlett.org and is published with permission.

As Republicans in Washington battle Democratic efforts to cancel federal student loans, New Hampshire GOP lawmakers promote a million-dollar tax-funded student loan forgiveness for college graduates. a high-tech industry – the manufacture of human organs.

In 2018, lawmakers passed a package of grants and tax breaks sought by the Advanced Regenerative Manufacturing Institute, a Manchester organization founded to develop synthetic human organs in partnership with other companies, including new local startups. .

This package, Senate Bill 564, granted companies engaged in advanced regenerative manufacturing a 10-year exemption from state business taxes. At the time, ARMI was the only organization eligible for tax exemption. The latest annual Tax Expenditure Report from the Department of Tax Administration indicates that several companies have filed documents to be considered eligible for the credit, but there are so few that disclosing the details of the filings would violate their privacy. under state tax disclosure laws.

The act included a regenerative manufacturing workforce development program, through which the state would fund the repayment or forgiveness of student loans for qualified graduates. To be eligible, graduates had to work for a qualified New Hampshire fabricator for at least five years.

In the four years since its authorization, the Regenerative Manufacturing Workforce Development Program has never been funded. Lawmakers tasked the New Hampshire Business Finance Authority (NHBFA) with designing and administering the program, but made no appropriations.

Lawmakers learned of the program’s unfunded status earlier in the legislative session, and Republican leaders have moved to find money for it. A $1 million appropriation was attached to House Bill 1256, a bill dealing with the Department of Military Affairs and Veterans Services.

At the HB 1256 conference committee last Wednesday, the funding drew bipartisan support, with lawmakers noting that the $1 million was just a fraction of what had been earmarked for the program.

“This is a test to see how much they actually need for this,” said Rep. Al Baldasaro, R-Londonderry.

The need is an interesting choice of words. ARMI originally received an $80 million grant from the Department of Defense for its regenerative manufacturing work and $214 million in other investments, according to a 2016 DOD press release. It attracted other businesses at Manchester’s Millyard, where work on generating human tissue is growing – without the student loan grant.

It’s unclear how many of an employee’s student loans the program would repay or cancel, as the program has been put on hold pending funding. A draft proposal the NHBFA gave to lawmakers in 2019, assuming full funding, said employees would have their student loans fully repaid over five years.

In general, loan repayments are considered taxable income, unless otherwise exempt from tax by law (as is the case with many federal student loan repayment and forgiveness programs) . The NHBFA’s draft proposal stated that under federal income tax laws beginning in 2019, the rebate would “result in taxable income” for the employee.

The local pardon for regenerative manufacturing employees is meant to help keep the industry in New Hampshire and make it easier to hire. But such patronage hurts other employers competing for the same labor, and it shifts wealth from some businesses to others, based only on those that are politically favored.

And such grants are clearly not needed in an industry that has proven capable of raising hundreds of millions of dollars in seed capital.

In Washington, Republicans are moving in the opposite direction. In April, U.S. Senate Republicans introduced the “Action Against Reckless Student Loans Act” to end the Biden administration’s pause on student loan repayments and block future loan forgiveness.

One of the reasons cited for opposing federal student loan forgiveness is that most Americans don’t have a college degree, and they would end up subsidizing the degrees of about a third of Americans who graduate from college. ‘university.

In New Hampshire, 35.4% of men and 38.4% of women have bachelor’s degrees, according to a 2019 state report.

For years, Republicans in Concord have been divided on the issue of student loan forgiveness.

Earlier in the session, lawmakers blocked an effort by the Sununu administration to create a larger-scale loan cancellation program. The Joint Tax Committee has filed a proposal to use $17 million of US federal bailout funds to forgive loans for students who agreed to work for at least four years in New Hampshire after graduating from college.

Governor Sununu proposed a $32 million student loan relief package in 2019 that would be funded by revenue from the state’s 529 college savings program. Lawmakers rejected the idea in favor of a smaller graduate retention incentive program.

This program offers free job offers and marketing for companies that agree to give a $1,000 bonus or student debt repayment to employees who agree to work in the state for four years.

New Hampshire has established a loan repayment program for medical professionals who agree to work in underserved areas of the state. It cost $766,783 in the current budget.