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Senate passes extension of jobless benefits

Senate passes extension of jobless benefits

April 11th, 2011 in News

The Missouri Senate passed legislation Monday extending federally funded jobless benefits to thousands of people who were cut off from payments earlier this month, but the bill also would reduce benefits for some people who get laid off in the future.

The Senate's 28-5 vote ratified a deal struck last week to end a filibuster by several Republican senators upset about the growth of federal spending. The bill would renew Missouri's participation in a federal program that provides 20 weeks of additional benefits to people who already have been unemployed for a year and a half.

To appease opponents, the legislation was amended to reduce Missouri's maximum state-funded unemployment benefits. Senate Republican leaders also agreed last week to work with the filibustering senators to identify up to $250 million of cuts to federal stimulus programs in Missouri.

To become law, the Missouri unemployment legislation still must receive a final House vote and be signed by Gov. Jay Nixon.

House Speaker Steven Tilley said his chamber, which had early passed an extension of federal benefits without a state benefit reduction, likely will pass the Senate version. But Tilley made no commitment on whether he would join the Senate effort to cut $250 million of stimulus spending.

Nixon has not said whether he would sign the unemployment bill.

The National Employment Law Project, a New York-based group that advocated for the extension of the federal benefits, said Monday that the House should reject the Senate changes or else the governor should veto the legislation because of the reductions in state benefits.

Missouri's unemployment rate has remained at 9 percent or higher since April 2009. Figures released Monday by the state show the unemployment rate fell three-tenths of a percentage point to 9.1 percent in March as more than 24,000 jobs were added.

About 10,000 Missouri residents lost their federally funded unemployment benefits when the state's participation in the program expired last April 2 because of the blockade against the reauthorization legislation. Those benefits could be restored retroactively if Missouri passes a bill. The legislation also could secure extended jobless benefits for an additional 24,000 people projected to become eligible in the next nine months.

The state Department of Labor and Industrial Relations previously estimated that $105 million in benefits could be at stake for Missouri residents. A financial analysis prepared Monday for the legislation put that at $115 million in benefits.

About three dozen states are participating in the federally funded extended benefits program. Seven other states with unemployment rates high enough to be eligible have not passed legislation allowing them to participate. But until Missouri's eligibility ended because of the filibuster, no state that joined the federal program had later voluntarily quit it.

States have, however, been looking at their own unemployment benefits as a means of cost-savings. Michigan recently became the first state to cut its maximum state jobless benefits from 26 weeks to 20 weeks. Arkansas has passed legislation to shave a week of its state jobless benefits. And the Florida House also has voted to cut state jobless benefits by six weeks.

When state-level jobless benefits are reduced, the amount of money that businesses must pay into state unemployment insurance trust funds also is reduced. A reduction in state jobless benefits also can lead to a reduction in federal benefits, because federal benefits are calculated as a percentage of state benefits.

In a financial analysis of the Missouri legislation, the state labor department estimated that Missouri's unemployment fund would save $108 million a year by the reduction in state benefits.

Sen. Mike Keheo, a Republican from Jefferson City who owns automobile dealerships, sponsored the amendment cutting state jobless benefits. He said the reduction in state benefits could encourage businesses to hire more employees.

The Missouri Chamber of Commerce and Industry said the state benefits cut is especially important because businesses are likely to be assessed additional money by the federal government to pay for several extensions of unemployment benefits during the recent economic downturn.

Missouri is one of several states whose unemployment funds have become insolvent as a result of the Great Recession. Missouri has borrowed $873 million from the federal government to pay its state jobless benefits.