The Missouri House sent a top business priority for Republicans to Gov. Jay Nixon's desk Tuesday, but the measure doesn't have enough votes to override a potential veto.
Unemployment benefits would be cut to as low as 13 weeks from the current 20 weeks, linking the amount of weeks given to the statewide average employment rate. The bill also would increase the amount that must be in the state's unemployment fund before the fees are lowered for businesses that contribute to the fund.
Supporters say the changes would strengthen the state's unemployment system and make sure it is solvent in the future. Opponents argue cutting the weeks of unemployment would harm people who worked for those benefits and were laid off through no fault of their own.
The bill passed 88-68, well short of the 109 needed to override a veto. Nixon vetoed a similar measure last year, and an override attempt fell short by just two votes in the House after succeeding in the Senate.
Nixon spokesman Scott Holste said the measure would be thoroughly reviewed. In a veto letter last year, the Democrat wrote the change was unnecessary and would unfairly impact people living in areas of the state with higher than average unemployment.
This year, some Republican House members withdrew support of the bill over changes made by the Senate, with some citing concerns from labor groups. One change would make it harder to collect unemployment benefits by adding severance pay or termination packages as wages for unemployment aid eligibility purposes. If workers get a lump-sum severance payment, the amount would be calculated as if the person were being paid weekly at the salary they earned before being fired; that would mean a longer wait for unemployment benefits.
Rep. Galen Higdon, R-St. Joseph, voted for the earlier House version but opposed the Senate's additions, lodging a "no" vote Tuesday. He said the Senate's changes could particularly hurt construction industry workers and union members.
"It's strangled some of the local working people," Higdon said.
At the lowest level, the Missouri bill allows laid-off workers to collect a maximum 13 weeks of benefits when the state's unemployment rate falls below 6 percent. A full 20 weeks of benefits, the current limit, would be available only if the unemployment rate was more than 9 percent.
Four other states - Florida, Georgia, Kansas and North Carolina - currently link jobless benefits to the unemployment rate.
In 2014, when Missouri's unemployment rate was 6.4 percent, more than 40 percent of workers were unemployed for more than 15 weeks, according to the U.S. Bureau of Labor Statistics.
Business groups support the bill, which they say would ease the financial burden, because unemployment benefits are paid out of a trust fund that businesses contribute to with a per-employee tax. The measure also encourages the state to seek alternatives to borrowing from the federal government if the fund runs out of the money in the future.
When a state's unemployment fund is in debt to the federal government for multiple years, employers lose out on a federal tax credit. Missouri, like many other states, borrowed money to pay for benefits during and after the recent recession. The state paid off that debt last year.