Missourians who lose their jobs could see a decline in the number of weeks they can collect unemployment insurance.
Republican lawmakers pushed through legislation last month that would tie the length of unemployment benefits to the state’s unemployment rate, a move that could ultimately shrink the maximum weeks of benefits in the state to 13 from the current standard of 20.
The idea’s fate now rests in the hands of Democratic Gov. Jay Nixon. His office declined to say whether he was considering a veto, but the governor’s Department of Labor spoke out in opposition to the idea at a House committee hearing.
The bill passed the Senate with enough votes to override a potential veto but did not get a two-thirds majority vote in the House.
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 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.
That would mean for March’s unemployment rate of 6.7 percent, workers could collect 15 weeks of unemployment by the proposed standards.
The bill would make the amount of time Missourians could collect jobless benefits one of the shortest in the country.
Republicans, along with business groups such as the Missouri Chamber of Commerce and Industry, have championed the legislation.
“When the unemployment rate is lower, there are more jobs available, so therefore there’s not as many weeks needed,” said Sen. Mike Kehoe, a Republican from Jefferson City. “So it’s kind of a common-sense solution to how you address what’s available versus what jobs are available.”
The bill would also increase the amount of money in the state’s unemployment trust fund from $600 million to $720 million to prevent Missouri needing to borrow more money from the federal government to pay people their benefits in tough economic times.
Since the last recession, the state has borrowed more than $1 billion to pay benefits. Businesses are responsible for paying off the debt, which currently costs around $63 per employee. That number increases annually and doesn’t include what businesses pay into the state unemployment trust fund.
“Shortening the number of weeks employees can draw unemployment benefits would provide significant savings to the trust fund,” Dan Meehan, president and CEO of the Missouri chamber, said in a news release+. “When the economy is tough and unemployment is higher, more funds would be available.”
Democrats have criticized the bill, arguing that the legislation doesn’t account for variations in the unemployment rate among industries.
“We’re telling people in Missouri that are still suffering in a good economy that ‘Your time is up,’ ” said Rep. Michael Butler, a St. Louis Democrat.
According to the state labor department, Missouri owes $257 million to the federal government for unemployment benefit payments. The state is on pace to pay off the debt in November.
“The plan to pay it back is right on target,” said Michael Louis, treasurer and secretary of the Missouri AFL-CIO. Cutting back unemployment benefits “is just something that doesn’t need to be done.”
Sen. Scott Sifton, a St. Louis Democrat who voted against the bill, was still in favor of raising the cap on the state’s trust fund.
“The business community is getting kind of tired of having this recurring thing happen where employers are getting hit on the back end of a downturn,” he said.
Kehoe also said it’s easier for employers to pay into the fund when the economy is doing well.
“Those small businesses can use that money to reinvest in their business, pay their employees more, hire more people,” he said. “That money goes back into Missouri’s economy, and I think that makes a big impact.”