Tallahassee, FL - The time frame for collecting unemployment benefits would be shortened under legislation put forth in the state House, trying to address a yawning state budget deficit and a growing federal IOU.
The measure also seeks to cut the burden on businesses, which pay into a fund that goes to pay jobless benefits.
Backers of the effort say the changes are needed to stanch the bleeding of the state’s unemployment system, which has been drained by prolonged recession and must now borrow from the federal government to pay claims. Unemployment tax rates have skyrocketed this year, with the jobless rate hovering at around 12 percent for most of the year. The state has borrowed almost $2 billion from Washington to pay claims.
Late Thursday, the House Economic and Tourism Subcommittee released a proposal making a number of significant changes to the duration of payments and the way unemployment benefits are paid. It’s the first proposal to be released on an issue that is expected to remain a focus during the 2011legislative session.
The plan would reduce the maximum length of state benefits from 26 to 20 weeks while keeping the maximum weekly benefit at $275. Federal benefits wouldn’t change – after state unemployment is used up, federal benefits kick in that take the total to more than 90 weeks of eligibility.
The bill would also tie the duration of benefits to the underlying unemployment rate. If the jobless rate remained above 9 percent, benefits would continue for 20 weeks. The duration of benefits, however, would ratchet back as the economy improves. For every half point drop in unemployment below 9 percent, the duration of benefits would drop by a week, falling to 12 weeks during periods when unemployment is 5 percent or lower.
“At first glance it appears to be good for business,” said Edie Ousley, spokeswoman for the Florida Chamber. “We’re looking forward to working with the lawmakers as the issue moves forward.”
Critics say the proposal saves money at the expense of jobless workers already saddled with mounting debt of their own as the economy continues to sputter and only slowly climbs out of the worst economic downturn most workers have seen in their lives.
“Where are the jobs that are not being filled by those who have “chosen” to stay on the couch?,” said Rich Templin, legislative affairs director of the Florida AFL-CIO. “The jobs simply aren’t there and this appears to be a mean-spirited attempt to blame the victims who want to work, but can’t find it.”
For employers, some of whom saw their unemployment compensation premiums triple as of Jan. 1, the proposal would reduce premiums by 10 percent by changing the formula by which they calculate past losses.
The bill joins SB 728, sponsored by Sen. Nancy Detert, R-Venice, and filed Jan. 31., which will be taken up Monday by the Senate Commerce and Tourism Committee, which Detert chairs.
The proposal was released a day before federal officials reported that the national unemployment rate for January fell to 9.0 percent from 9.4 percent in December and 9.8 percent in November. It’s the largest two-month drop since 1958, the U.S. Department of Labor reported Friday. The nation’s manufacturing sector grew by 49,000 jobs, the largest increase since August 1998.
The news was tempered by the fact that nonagricultural employment increased by 36,000 workers, far less than the nearly 145,000 jobs economists had projected for the month. Federal officials blamed bad weather for the sluggish job growth, saying inclement weather across the country held back construction sector employment.
The construction sector lost 32,000 jobs in January, bringing its 12-month total to 130,000. Industry representative say the trend is not likely to trend upward anytime soon.
“With stimulus work starting to dry up, Congress proposing major funding cuts and private demand still weak, it is hard to see how the industry will add jobs this year,” said Ken Simonson chief economist for the Associated Contractors of America.