Reining in fraud would help make Missouri’s unemployment trust fund solvent

Posted April 3, 2014 at 12:50 pm

For several years, Missouri’s unemployment insurance trust fund has been working to repay millions of dollars borrowed from the federal government to cover unemployment insurance claims. Legislation given final approval by the Missouri Senate on Thursday could help rein in some of the debt.

The Missouri Senate passed Senate Bill 510, legislation that would keep employees who are fired for infractions such as stealing and doing drugs in the workplace from receiving unemployment insurance benefits. Sen. Will Kraus is the sponsor of SB 510. He sponsored a similar bill, Senate Bill 28, which was vetoed by Gov. Jay Nixon in the 2013 Legislative Session.

Many states were on the indebted list following the recession, when state unemployment funds were unable to keep up with the increased number of claims. Most have taken steps to reduce or eliminate outstanding debt. Missouri is one of 13 states that remain on the indebted list. Missouri currently owes $270 million to the federal government. In addition to penalties, interest on the debt grows at a rate of approximately $12 million a year.

“Employers fully fund the system through federal and state unemployment insurance fees. That’s why employers have a right to demand that the system be protected from obvious fraud,” said Dan Mehan, Missouri Chamber president and CEO.

The Missouri Chamber is working to bring solvency back to Missouri’s unemployment insurance trust fund through several legislative proposals that are under consideration during the 2014 Legislative Session. These options include bonding the outstanding debt to limit interest and penalties. Another legislative proposal that is under review would tie the weeks of unemployment insurance eligibility to the unemployment rate. Senate Bill 510 addresses the problem of fraud that employers say is a serious drain on the system.

“Why should we allow employers shoulder the debt of several hundreds of millions of dollars, now or in the future, when we have the power to implement common sense reforms like Senate Bill 510?” Mehan asked.

The Missouri Chamber of Commerce and Industry (www.mochamber.com) was founded in 1923 and is the largest business organization in Missouri, representing almost 3,000 employers, providing more than 425,000 jobs for Missourians.