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Missouri House GOP resistant to unemployment stimulus money

Thursday, February 26, 2009 | 5:11 p.m. CST; updated 11:25 p.m. CST, Thursday, February 26, 2009

JEFFERSON CITY — Republican legislative leaders said Wednesday that they are willing to turn down $133 million in federal stimulus money rather than change Missouri's law on jobless benefits.

Unemployed Missourians already are to receive a $25 weekly boost in benefits as a result of the federal stimulus law. That won't be affected.

But Republicans say they don't like a second prong that would require Missouri to expand unemployment benefits to receive additional federal money. They fear businesses would shoulder a higher tax burden to continue the expanded benefits when the federal money runs out.

"This is essentially a federal bribe to change state laws permanently, and the bribe lasts two years or less," said Republican Lt. Gov. Peter Kinder. He was joined at a news conference by House Speaker Ron Richard, R-Joplin, Senate President Pro Tem Charlie Shields, R-St. Joseph, and other Republican lawmakers.

Democratic Gov. Jay Nixon has said he wants Missouri to take advantage of every dollar it can from the federal stimulus package. But Nixon took no position Wednesday on whether he wants to change the state unemployment law to draw down more federal money.

"We'll sit down and look at what the consequences of those expansions might be, both short-run and long-run, before we'll engage on that," Nixon said.

Missouri could get an additional $44 million from the federal government if it changes the time period of workers' past wages that it analyzes to determine eligibility for jobless benefits. The state Division of Employment Security estimates that could increase the benefits paid by the state by $28 million to $94 million this year.

Missouri could get an additional $89 million from the federal government if it also adopts two out of four other potential changes to its law. Those include:

  • covering unemployed people who are seeking only part-time jobs, instead of full-time work;
  • covering people who leave jobs for family reasons, including the illness or disability of a family member, domestic violence or to accompany a spouse who has taken a job elsewhere;
  • extending benefits for an additional 26 weeks, after their regular jobless benefits expire, to people who are in job training programs; and
  • adding $15 weekly to the benefits of unemployed people with dependents, such as parents with children at home.

Depending on the alternatives chosen, the state estimates it could increase the unemployment benefits paid by anywhere from $24 million to $108 million this year.

Richard declared: "On this particular item, a change in statute — we're not going to do that."

Unemployment benefits are financed through special state and federal assessments on businesses that essentially amount to taxes. Missouri's unemployment benefits fund is going broke because of an increasing number of claims, and the state has asked to borrow as much as $260 million from the federal government over the next several months to pay benefits.

That could result in a federal surcharge on Missouri businesses to recoup the money.

Republicans said businesses could be hit with even more taxes if the state changed its unemployment law to take the federal stimulus money and then had to find a way to continue paying the enhanced benefits when the federal money runs out.

Andrew Stettner, deputy director of the New York-based National Employment Law Project, said it might be possible for states to change their unemployment laws to get the federal money, then repeal those changes in 2012 or later.

He said about half the states already have enacted some of the changes to their laws.

"The sky has not fallen," Stettner said. "These benefits have helped low-wage, women and part-time workers ... at a very incremental cost to the state."


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