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Missouri won't receive stimulus money for jobless benefits

Thursday, August 20, 2009 | 12:01 a.m. CDT

JEFFERSON CITY — Federal officials have rejected Missouri's request for $133 million in federal stimulus funds to boost unemployment benefits.

The U.S. Department of Labor's decision had been expected, but state officials were disheartened Wednesday that their attempt failed.

"I am disappointed by this decision, which will prevent the flow of benefits to certain jobless Missourians despite the work done by this administration and a bipartisan majority in the Legislature to pass provisions that modernize our unemployment system," said Larry Rebman, director of the Department of Labor and Industrial Relations.

At issue was a provision in the federal stimulus package that includes $7 billion for states that permanently expand eligibility for jobless benefits. States had to implement the changes before receiving the federal money.

But Missouri's legislation would have expanded eligibility only after the U.S. Department of Labor approved the state's application and would have automatically expired when all the federal money had been spent, unless renewed by lawmakers.

The U.S. Department of Labor had said in May, shortly after lawmakers passed the measure, that Missouri would not qualify for the money because of the wording in the legislation.

Rep. Barney Fisher, who sponsored the state expansion, said Wednesday that he is not surprised Missouri's attempt was rejected. Fisher said lawmakers knew they were taking a chance but that Republicans will not make the expansion permanent because it could force businesses to pay higher taxes to fund jobless benefits once the federal money runs out.

"Once we've taken the bait — which is the money — then we've also taken the hook," said Fisher, R-Richards.

The state would have offered unemployment benefits to those who leave jobs for family reasons. That could include the illness, disability of a relative, domestic violence or accompanying a spouse who has taken a job elsewhere. The proposed expansion would have allowed an extra 26 weeks of unemployment for those who enroll in job training.

Missouri's proposed jobless benefit expansion came after Republican Lt. Gov. Peter Kinder and GOP leaders in the state House and Senate said they opposed making permanent changes to the state's unemployment benefits laws to accept short-term federal stimulus money.

Democratic Gov. Jay Nixon's administration worked out a compromise that eventually earned Republican backing. Nixon touted the proposed eligibility expansion during a May news conference immediately after lawmakers adjourned.

Nixon told reporters that the state legislation would increase benefits to out-of-work Missourians and shield businesses from tax increases.

A Nixon spokesman had no comment Wednesday.

The U.S. Labor Department notified the state agency on Tuesday of its decision. It does not affect an additional component in the state legislation that extended unemployment benefits for those who already qualified. That provision allows Missourians to get up to 20 extra weeks of jobless benefits during periods of high unemployment.

The state labor department says it has distributed $27 million to people who qualify for the extension.


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