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UPDATE: Lawmakers pass bill limiting jobless benefits

Wednesday, April 30, 2014 | 5:04 p.m. CDT

JEFFERSON CITY — The amount of time Missouri workers could claim unemployment benefits after losing a job would depend upon how many others also are looking for work, according to a measure given final legislative approval Wednesday.

Missouri residents currently can collect unemployment benefits for up to 20 weeks. Under the legislation, jobless benefits could be claimed for 20 weeks only when the state's average unemployment rate is at least 9 percent. The maximum duration of jobless benefits would decrease one week for each one-half percentage point drop in the unemployment rate and bottom out at 13 weeks when the state's jobless rate is less than 6 percent.

The bill could make Missouri's jobless benefits timespan one of the shortest in the nation. Florida and North Carolina both have linked the duration of jobless benefits to the unemployment rate with the potential for their payments to halt after 12 weeks.

House members passed the legislation 101-49 on a largely party-line vote Wednesday. It cleared the Senate 24-8 last month and now goes to Gov. Jay Nixon.

Missouri Rep. Jay Barnes said the measure brings more rationality to Missouri's unemployment system.

"As the economy is better, the need for unemployment benefits decreases and so too should those benefits," said Barnes, R-Jefferson City.

Democratic critics said people collecting jobless benefits use the money to pay bills and cover living expenses until they can find a new job. They said the legislation doesn't account for variations in the unemployment rate among industries and in different areas of the state.

"This bill is completely anti-worker," said Rep. Stacey Newman, D- St. Louis.

During the first quarter of 2014, the average state unemployment rate was between 6 percent and 6.5 percent. That would equate to 14 weeks of jobless benefits under the bill.

The unemployment legislation also calls for the state Board of Unemployment Fund Financing to meet and consider authorizing bonding or other borrowing when more than $300 million is owed, and it raises the cap on how much money can be in the trust fund at one time.

The state's unemployment trust fund became insolvent in February 2009, and officials say Missouri has borrowed more than $1 billion from the federal government since then to continue paying benefits. The loan balance was nearly $257 million as of last week.

Supporters have said the measure could help the state pay back the money it borrowed and prevent similar situations in the future.

The borrowing has meant Missouri businesses pay higher assessments. The federal unemployment tax rate is 6 percent, and employers get a 5.4 percent credit if they pay their state unemployment tax on time and the U.S. Department of Labor certifies the state's unemployment program meets federal requirements.

"Employers have paid millions of dollars in interest and penalties alone on this debt," said Dan Mehan, the president and CEO of the Missouri Chamber of Commerce and Industry. "We owe it to our employers to establish systemic reforms that will better protect the fund so that we don't have this problem arise the next time the economy dips."

Nixon announced in January the unemployment debt is expected to be paid off in November instead of May 2015. He said employers could save $186 million on federal unemployment taxes.

 

 


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