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Missouri House overturns unemployment limits bill veto

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The state House has voted to overturn Governor Jay Nixon’s (D) veto of a bill that would shorten the length of time Missourians can receive unemployment benefits, but the question might not even be considered in the Senate in the final three days of the session.

Scott Fitzpatrick (photo courtesy; Tim Bommel, Missouri House Communications)

Scott Fitzpatrick carried the unemployment bill in the state House.  (photo courtesy; Tim Bommel, Missouri House Communications)

The Republican-controlled House mustered just enough votes to overturn the veto of a bill that would link the length of time workers can get unemployment benefits to the unemployment rate, shortening it to as few as 13 weeks if that rate stays below 6-percent. The current time period is 20 weeks. The national standard is 26.

Representative Margo McNeil (D-Florissant) said the measure will only hurt people who need help.

“We’re going to vote to be the absolute lowest state in the nation? The absolute stingiest state in the nation, with this override?” McNeil asked fellow representatives during debate, Tuesday. “Where is our humanity?”

Representative Keith English (I-Florissant) said the bill would hurt him, his family, and anyone who works a seasonal job.

“January 1 starts unemployment, Mr. Speaker, so the second week in April is the thirteenth week,” English told his fellows. “So we might get a job at Labadie Powerhouse, Meramec Powerhouse, somewhere where we’ve got about a 20- to 30-week shutdown, but then what happens is as the work starts to come down we get laid off. Well, if we used our 13-weeks of unemployment, Mr. Speaker, guess what, when we get laid off we go down to the bottom of the list, and there’s no work coming around the holidays … when we cut from 20 to 13 weeks there is no money left, so now what happens? We go on [the Supplemental Nutrition Assistance Program].”

Republicans say shortening the length of time people can receive benefits reduces the amount employers have to pay into it. This bill would also make it more difficult for a former employee who is getting a severance package to receive unemployment, and would increase the amount the state could keep in its unemployment insurance trust fund.

Backers say the state has had to borrow federal money when that fund has run dry. Sponsor Scott Fitzpatrick (R-Shell Knob) says that practice has hurt Missouri businesses.

“It makes employers less competitive across state lines to states that have better unemployment trust funds that work right,” said Fitzpatrick. “It just makes sense to make this thing solvent. It makes no sense to leave it the way it is right now.”

It is now up to the Senate whether to vote to override Nixon’s veto, but after Republican leadership in that chamber forced a vote on a so-called “Right to Work” bill, Democrats in that chamber say they will make it as difficult as possible to move any legislation in the final three days of the session.

 

McCaskill, Blunt take opposing views to extending unemployment benefits

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The U.S. Senate has not been able to compromise on a plan to extend unemployment benefits, and Missouri’s two senators stand on opposite sides of the issue. A vote stalled in the Senate yesterday over unemployment benefits — Democrats wanted a one-year extension of the expired benefits and Republicans say they’ll support a three-month renewal, but only if costs are covered up front.

Sen. Roy Blunt says people who don’t face an end to getting a government check each week have no reason to find a job.

“I just don’t think its a plan. I don’t think it’s a policy,” Blunt said. “Permanent unemployment is not the answer, and two years of unemployment is pretty darn close to permanent unemployment.”

Sen. Claire McCaskill says the program needs to be modernized, and that Missouri is faring better than many other states where unemployment rates are higher. However, she does not think the majority of folks are looking for a free ride, as some of her Republican counterparts have suggested.

“It is not a lot of money,” she said, “and I have not met anyone who would rather get this check than a job.”

The checks are about $300 a week.

Both sides say they are working toward a bi-partisan compromise that can gain approval of the Democrat controlled Senate and the Republican controlled House. Democrats had wanted a one-year extension; Republicans said they would only vote in favor of a three-month plan.

Blunt says the program costs $6 billion every 90 days, and agrees with his fellow Republicans that an extension of benefits needs to be paid for up front.

“The package does what the Republicans wanted,” said Senate Majority Leader Harry Reid, pointing to a plan that would be paid for and would contain “structural changes they were demanding.”

However, Republicans rejected the proposal, bringing passage of a bill to an abrupt halt on the Senate floor.

The expiration of federal unemployment benefits on Dec. 28 has left about 1.4 million people without a weekly income.

Tens of thousands face loss of jobless benefits (AUDIO)

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Tens of thousands of jobless Missourians have gotten letters telling them their federally funded unemployment benefits are being phased out. 

The state labor department has sent messages to 138-thousand Missourians updating them on their eligibility and payout deadlines.  The extended federal unemployment benefits program expires on November 30th.   [Read more…]

Unemployment trust fund projected to reach $2.6 billion

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High unemployment and low contributions have battered Missouri’s unemployment trust fund, now projected to carry a $2.6 billion deficit by 2012.

Missouri’s unemployment rate has ballooned to 9.3%, driving the unemployment trust fund into the red by $600 million. The State Department of Labor projects that deficit to grow to $1.5 billion next year, when it projects the unemployment rate will top 10%. In 2011, the unemployment trust fund deficit is expected to grow to $2.6 billion and edge a little higher the following year.

State Labor Director Larry Rebman says addressing the fund must be a top priority of lawmakers next year.

"It’s imperative," says Rebman. "Employers in the state need to come to the table and discuss how we are going to fund this system. It is fully funded by employers and it has been underfunded for decades."

When Rebman talks decades, he means it. Rebman claims Missouri hasn’t properly funded the unemployment trust fund since the 1970s. He says problems began to be systematic by the 80s.

The fund relies on a tax on businesses, enacted by the Federal Unemployment Tax Act (FUTA). Missouri businesses pay a 6.2% tax into the fund. If a state fund maintains a balance, the federal government provides a 5.8% credit to businesses.

Rebman says the trend bothers him, both because of the growing deficit, but also because of the effect such a deficit will have on the ability of businesses to hire in the future.

"This is going to be a drag on employers as we come out of this recession," Rebman says, "and it is very troubling."

For now, the state is forced to keep borrowing money from the federal government to prop up the fund.

Download/listen Brent Martin reports (:60 MP3)
Unemployment Trust Fund projections

Missouri compromise fails to lure in $133 million

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Missouri’s effort to secure $133 million federal dollars to expand unemployment benefits has been denied, because a compromise measure didn’t meet federal demands.

Congress offered Missouri the money to extend unemployment benefits to residents who lost jobs because of family illness, domestic violence or dislocation of a spouse. Unemployed workers in training programs would see benefits extended from 26 weeks to 52. The money came with a catch. To get the extra money for the next two years, the state would have to make the expansions permanent.

Missouri lawmakers sought a compromise and made the expansion temporary in HB 1075 . The federal Labor Department rejected the compromise.

"It’s really not a surprise, but it’s a continuation of an errant policy," says Missouri Chamber of Commerce President and CEO Dan Mehan.

Mehan says everyone knew the risk, that the federal government would likely reject the proposal. But Mehan insists the state didn’t have a choice, that businesses couldn’t accept temporary funding in exchange for costly, permanent changes. Businesses pay into the unemployment compensation fund. State labor officials estimated that making such permanent changes would have cost anywhere from $28-to-94 million a year.

The recession has hit Missouri hard. The state unemployment rate is 9.3%.

With federal disapproval, where does this leave Missouri?

"Exactly where we are," Mehan tells the Missourinet. "The (unemployment compensation) trust fund is in the red. We’re going to have to borrow to pay claims. We’re going to have to probably have to have a significant legislative solution to fix it for the future."

Mehan says the legislature will have to address the issue next year and any solutions will come at a cost. 

Download/listen Brent Martin reports (1:30 MP3)

Missouri unemployment fund nearly broke, state asks federal government for $260 million

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The State Department of Labor is asking the federal government for $260 million  to cover a projected short-fall in the unemployment trust fund … the fund’s expected to go into the red as early as next week.

According to spokeswoman Wanda Seeny, as Missouri’s unemployment rate sits at seven point three percent … the highest in 25 years … the fund that pays out unemployment benefits is on the verge of being insolvent.

Seeney says the borrowed money will take the fund through April, when taxes employers pay on employee wages will come in and replenish the account. She says repayment to the federal government would also begin at that time.

Seeney says out-of-work Missourians should not worry about their benefits, that the department will do whatever it takes to ensure benefits continue to those who qualify.

The last time the state had to borrow money to cover benefits was in 2003 and 2004, which was paid back in 2006 and 2007, leaving little time for the fund to recover, Seeney says.

Click here for more about unemployment benefits through the Department of Labor and Industrial Relations.  

Jessica Machetta reports [Download/listen MP3]

Critics assail while Labor Department defends new system for paying UI claims

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A new system for distributing unemployment benefits to out of work Missourians went into effect in July. And that system is now coming under fire from some people who have lost their jobs and from others who are simply concerned about what they see as problems associated with the new system.

It’s a system that requires Missourians who claim benefits to be automatically enrolled in a debit card program administered by the Department of Labor and Industrial Relations’ Division of Employment Security in conjunction with Central Bank. Claimants may exercise the right to opt out of the debit card program and have payments sent directly to their bank accounts, but critics claim the option must be exercised within seven days of filing initial claims. That claim is disputed by the Department of Labor.

Maria Williamson, a Fenton auto worker who was laid off, doesn’t like the debit card system and insists she was not fully informed. "I didn’t know anything about this until the day I received the card in the mail," says Williamson, "And then that following Monday when I called the unemployment office, that is when I was told it was not an option for me. It was done. I was in the system under this debit."

Delays are a concern for Darin Gilley, president of a UAW local in a shop that supplies auto parts for vans. "I’ve had numerous members who have been affected by this recently," says Gilley, "And there’s a lot of complaints from them about both the fees and also the fact that it seems like their cards are not being loaded or having their accounts – have their money deposited in their accounts."

State Representative Rachel Storch (D-St. Louis) finds the new system cumbersome and somewhat confusing. Says Storch: "If you’re savvy enough to figure out that you have seven to ten days to opt out of this you can choose to have direct deposit to you own bank. But that requires that you go on line, print out the appropriate forms, mail them into the Department of Labor – to Employment Security, and they put you back onto direct deposit … otherwise you will be receiving the debit card."

The Department defends the new program, saying it provides improved security and service. It adds the new program will save taxpayers $643,762 a year. As for the specific compaints regarding the option to opt out and the fees charged, Labor Department spokesperson Daisy Olivo tries to put minds at ease.

"You now have the option," says Olivo, "Of either choosing to receive your UI benefits via the debit card or direct deposit." She acknowledges there was initially a seven day period in which claimants had to choose to receive money through direct deposit or on the debit card, but that seven day period has been waived and claimants can request direct deposit at any time.

On the concern regarding fees, Olivo makes it clear there is no need to pay charges or fees: "Funds can be obtained free via these debit cards at any MasterCard member bank location by using a teller. That would be at approximately 3,000 locations in the State of Missouri." Olivo adds debit cards are also accepted at thousands of retail establishments throughout the state, with the ability to receive cash back from purchases – at no charge.

Download/Listen: Steve Walsh report (:60 MP3)

Jobless Rate for October Increases

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Missouri’s seasonally-adjusted unemployment rate for October was 5.4 percent – an increase of four-tenths of a percentage point. The State Department of Economic Development says the rise in jobless figures reflects temporary layoffs in the automobile industry and a decrease in manufacturing employment. October’s seasonally-adjusted employment was down by 10,700 jobs from September’s level.

Wire Rope Comes Under New Ownership

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One of St. Joseph’s major employers is coming under new ownership. Wire Rope Corporation of America is being bought by a private equity firm. About 450 people work at the St. Joseph plant. Company officials do not expect any layoffs. The company is now owned by KPS Special Situations Fund, a corporation turn-around company that buys companies with financial problems and sells them when they’ve become profitable again.

Auto Parts Company to Close Plants

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An auto parts company with three plants in Missouri says it will announce late next month the locations of eight plants it is going to close. Dana Corporation also plans to modify or reject union contracts and eliminate retiree health care benefits. Dana says the plan will help it get out of bankruptcy. It has plants in Ballwin, which it has been trying to shelve for more than a year, Cape Girardeau and Columbia. Dana makes engine and chassis components and axles. It says brutal global competition, outrageous employee benefits, and inefficient plants have caused it to lose more than $2 billion in the last five quarters.