Missouri’s unemployment benefits would be reduced from 20 weeks to as few as 13 weeks, under a measure a state Senate committee could vote on today. The benefits duration would depend on the state’s jobless rate at the time. If passed by the legislature and signed into law by the governor, the legislation would make Missouri’s unemployment benefits period one of the shortest in the nation. The House has passed the bill which is sponsored by State Rep. Scott Fitzpatrick (R-Shell Knob).
“We’re giving them three months to go from one job to another,” says Fitzpatrick. “That to me, is not unreasonable. If we’re in a recession, and the unemployment rate gets up over 9%, then they have the same amount of time that they have right now.”
Fitzpatrick says during the last recession, Missouri had to borrow about $1 billion from the federal government because the state ran out of money to continue paying unemployment benefits. Fitzpatrick tells Missourinet that Missouri is the only state in the nation with problems keeping money in its unemployment fund during a recession.
“If you always run out of money anytime there’s a downturn in the economy, then that’s a systemic problem and something that needs to be corrected,” says Fitzpatrick. “We always run out of money whenever there’s a recession. We have for the last five recessions.”
The proposal also requires more money to be in the state’s unemployment fund before employers can be taxed less for the money they must put in the fund.
“We’re trying to build a balance in the fund and make it less susceptible to running out of money in times of recession, but also indexing benefits to the actual unemployment rate so that the fund can be in better shape the next time we’re in a recession,” says Fitzpatrick.
When the fund runs out of money and Missouri goes two consecutive Januaries with a loan balance to the federal government, Fitzpatrick says employers experience an automatic tax increase from the federal government to help the state repay the loan. He says employers get a bill for $21 per employee the first year and that figure goes up each year.
“You could’ve been a company that didn’t have a single unemployment claim, but you will still get that bill. Then you’ll also get an assessment for the interest on the loan that you’ll have to pay,” says Fitzpatrick.
He hopes to have about $700-$800 million in the fund to be what he considers really healthy.
“Ideally, you go longer without a recession and you go north of a billion dollars in that fund,” says Fitzpatrick. “The more the better, but it’s impossible to predict how much money you need in the fund for a recession because you don’t know how bad the recession is going to be and how long it will last. All you can do is the more you have the less likely you have to borrow money.”
Opponents of the measure say tough economic times usually last longer than 13 weeks. They also contest that the fund is strong.
The proposal passed in 2015, but the Missouri Supreme Court ruled that the state Legislature should have overridden then-Governor Jay Nixon’s (D) veto of the bill during the regular session, not the annual veto session.