A proposal approved in the Missouri House would have an immediate impact on unemployed workers if it becomes law. The chamber voted 96-53 last Thursday to send a bill to the Senate that would curtail jobless benefits.
The availability of their unemployment pay would be slashed by seven weeks, effectively ranking Missouri third among states offering the least amount of time to collect the benefits according to the Center for Budget and Policy. 39 states provide jobless pay for 26 weeks. Missouri now offers the payout for 20 weeks.
The proposal passed by the House calls for a sliding scale of available weeks, triggered by the unemployment rate. If the rate was nine percent or higher, workers would receive the current 20 weeks of benefits. The eight graduated levels would bottom out at 13 weeks when the rate is under six percent.
The most recent figures place the state’s unemployment at 3.4% percent, which means that if the law was in place now, jobless numbers would have to dramatically increase for the window of time to collect unemployment benefits to rise even a week.
If the bill becomes law, Missouri would join five other states that base the availability of jobless benefits on the unemployment rate. Among those five, Florida and North Carolina currently offer only twelve weeks of benefits while Georgia offers 14, Kansas 19 and Idaho 21 weeks.
The proposal from Republican Representative Scott Fitzpatrick of Shell Knob is intended to stabilize Missouri’s Unemployment Trust Fund which has had to borrow money from the federal government in each of the last five recessions.
The situation occurs when the fund has more money going out than is being paid in through employer taxes.
If the state continues to owe money for two years, businesses start to lose their federal unemployment tax credits. According to Fitzpatrick, the credits are reduced by $20 for each employee in the first year, and climb to $40 and $60 in the second and third year.
The bill does have a provision that will require employers to pitch in more money. Right now, employers start getting discounts on their contributions to the trust fund when its balance reaches $600 million.
Under the measure, they wouldn’t receive their first discount of 7% until the fund reaches a balance of $720 million. A second reduction of 12% would kick in for employers when the fund reaches $720 million. Both benchmarks are $120 million higher than what’s currently required.
Business groups largely favor having more money in the trust fund because they think it would provide more protection against a recession.
Organizations that spoke in favor the bill during its committee hearing included the Missouri Chamber of Commerce, the Missouri Retailers Association, the Missouri Grocers Association and the National Federation of Independent Business Missouri.
The state’s largest union organization, the Missouri AFL-CIO, was the lone group to testify against the measure.
One of the bill’s components was removed on the House floor. It allowed employers to file an appeal to recover overpayments for unemployment benefits for 60 days from the effective date of the bill becoming law. It permitted employers to recoup those costs dating back five years.
The provision was dropped under an amendment submitted by Democratic Representative Doug Beck of St. Louis. Beck is a union pipefitter by trade who also sits on the House Special Committee on Employment Security, which heard the bill before it went to the House floor. He was a vocal opponent of the provision and the overall legislation during the hearing.
Another element of the measure that survived on the house floor would require the state’s Board of Unemployment Financing to automatically convene if the state reached a certain level of debt to the federal government in unemployment compensation.
The proposal from Representative Fitzpatrick now moves to the state Senate. This year marks his third go-around with the unemployment trust fund measure. Fitzpatrick originally sponsored the bill in 2015, when it successfully passed and became law.
At that time, the House and Senate overrode a veto by then-Democratic Governor Jay Nixon, although the Senate’s action occurred during a later meeting of the legislature known as the “veto session”.
In the spring of 2016, the state Supreme Court struck down the Senate’s override, which scratched the law from the books. An effort by Fitzpatrick to get the measure to the finish line last year died in the Senate after the House approved it.
In addition to offering a shorter duration of benefits than most states, Missouri also ranks low in terms of maximum weekly unemployment benefits at $320. Only six states – Alabama, Arizona, Florida, Louisiana, Mississippi, and Tennessee – have smaller weekly payouts.