Lawmakers send governor legislation to help control unemployment insurance costs

Posted May 8, 2014 at 11:34 am

Facing paying an outstanding debt of $270 million to the federal government to cover funds borrowed during the last economic downturn to cover jobless claims, employers are supportive of legislation passed by the Missouri House on April 30 that would help rein in costs. The Missouri House gave final approval to Senate Bill 673, legislation that would tie the number of weeks jobless Missourians can receive unemployment benefits to the unemployment insurance rate. Now it is up to Gov. Nixon to sign this common-sense legislation into law.

“Employers have paid millions of dollars in interest and penalties alone on this debt,” Missouri Chamber President and CEO Dan Mehan said. “We owe it to our employers to establish systemic reforms that will better protect the fund so that we don’t have this problem arise the next time the economy dips.”

Following the recession, Missouri’s unemployment insurance system became insolvent and had to borrow money from the federal government to cover claims. Missouri has borrowed more than $1 billion since then to continue paying unemployment benefits.

“Prior to the recession, the average number of benefit weeks was 15 weeks,” said Mehan, “So this legislation is not a radical departure from protections that are available to the average out-of-work Missourian.”

Under Senate Bill 673, unemployed Missourians would be eligible for:

·20 weeks of benefits if the Missouri average unemployment rate is nine percent or higher

·19 weeks of benefits if the Missouri average unemployment rate is between 8.5 percent and 9 percent;

·18 weeks of benefits if the Missouri average unemployment rate is 8 percent up to and including 8.5 percent;

·17 weeks if the Missouri average unemployment rate is between 7 .5 percent and 8 percent;

·16 weeks of benefits if the Missouri average unemployment rate is 7 percent up to and including 7.5 percent;

·15 weeks of benefits if the Missouri average unemployment rate is between 6.5 percent and 7 percent;

·14 weeks of benefits if the Missouri average unemployment rate is 6 percent up to and including 6.5 percent; and

·13 weeks of unemployment benefits if the Missouri average unemployment rate is below 6 percent

“Both Georgia and Florida have passed legislation that ties unemployment benefit weeks to the unemployment rate,” Mehan said. “We commend Sen. Kehoe, sponsor of the bill, for taking this approach to help Missouri employers rein in our insolvent system. A business owner himself, Kehoe understands what a bottom-line issue this is for employers. We also thank Rep. Jay Barnes for his work in handling the bill in the Missouri House.”

Both Sen. Mike Kehoe and Rep. Jay Barnes are Republicans from Jefferson City.

The Missouri Chamber is emphasizing the need to address Missouri’s unemployment insurance system on multiple levels, including provisions to address solvency as well as system reforms to rein in fraud.

“It is critical that we provide long-term stability for the fund in the future so that the system can serve the workers it was designed to protect – people unemployed by no fault of their own,” said Mehan. “This week lawmakers also passed legislation to block employees fired for doing drugs on the job from unemployment insurance benefits. Together, these bills can help shore up the fund and protect it for people who deserve a hand up.”

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.