Missouri Senate hears Unemployment Reform bill

This week Sen. Mike Kehoe, R-Jefferson City, presented Senate Bill 673 to the Senate Committee on Governmental Accountability and Fiscal Oversight.   This is legislation that would tie the number of weeks jobless Missourians can receive unemployment benefits to the unemployment insurance rate.

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.

“We’ve been before the general assembly several times ringing the alarm bell about this deficit,” Tracy King, vice president of governmental affairs for the Missouri Chamber, testified. “Last year employers paid $92 million and this year they are paying $140 million (in additional fees). This is a significant burden on all employers, but especially for small employers who might not have budgeted for the impact of this debt.”

Prior to the recession, the average number of benefit weeks was 15 weeks.  This bill aims to tie the amount of weeks a Missourian can receive benefits to the unemployment rate.

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 6.5 percent

This bill also proposes a bonding plan to pay back the debt.  This plan would end the graduated loss of FUTA tax credits that employers have shouldered since the fund began borrowing money from the federal government.  Employers started paying $21 per employee in additional fees in 2011 and that amount has risen by $21 each year to a total of $63. Under the bill, the payment would stay static and the balance of the debt would be bonded.

“The Missouri Chamber is emphasizing the need to address our unemployment insurance system on multiple levels.  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 King.

Both Georgia and Florida have passed legislation that ties unemployment benefit weeks to the unemployment rate.

For more information, please contact Tracy King at tking@mochamber.com or by phone at 573-634-3511.

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