Fight brewing over Missouri cutting jobless benefits

It took six years for Missouri’s unemployment rate to return to pre-recession levels, finally dropping below 6 percent last summer.

It has remained there ever since.

Under a bill passed recently by lawmakers over the objections of the governor, a jobless rate that low will mean a dramatic reduction in how long out-of-work Missourians can receive unemployment benefits.

The new law is supposed to go into effect in January. Whether it will isn’t clear. Legal wrangling may delay or even completely derail its implementation.

But according to the bill, starting in January Missouri’s current 20 weeks of unemployment benefits would drop to as few as 13 weeks, nearly the shortest in the nation. That’s because, as a money-saving measure, lawmakers tied the length of benefits to the state’s unemployment rate, offering less aid when there are fewer people unemployed.

“If unemployment is lower, there should be plenty of jobs around,” said Ray McCarty, president of Associated Industries of Missouri. “Almost everyone who wants a job can find a job. It may not be the job they want, but they can find a job.”

But while the state’s unemployment rate has dropped considerably in recent years, some areas haven’t experienced the economic recovery.

In Pemiscot County in Missouri’s Bootheel, unemployment hovers around 11 percent. The rate is 8.5 percent in Ozark County, along the state’s southern border, and in Clark County, along its northern border.

The legislation doesn’t take regional unemployment rates into consideration, relying solely on the statewide rate.

Democrats decried the bill, arguing that unemployment benefits not only provide a safety net for workers, they also boost the economy when recipients use benefits to buy food, clothing and other essentials.

“Eighty years ago, America was in the throes of the Great Depression,” Gov. Jay Nixon, a Democrat, said in a letter to lawmakers. “This dark moment in our nation’s history lasted far longer than 13 weeks.”

While Democrats were unable to stop the bill in the legislature, they think they’ll have more luck in the courts.

In the regular legislative session earlier this year, the measure was vetoed by Nixon. The Missouri House mustered up the two-thirds majority needed to override the governor, but the Senate didn’t bring the veto override for a vote before lawmakers adjourned in May.

When lawmakers returned to the Capitol last month for the annual veto session, the Senate finally voted to override the veto.

Republican leaders say the delay was perfectly legal. Democrats, including the governor, say the vote violates the constitution.

“This is going to be resolved in the courts,” said Senate President Pro Tem Ron Richard, a Joplin Republican.

According to the state constitution, a veto session is automatically convened in September if the governor vetoes any bills within five days of the regular session’s adjournment or afterward.

Nixon vetoed the bill 10 days before the session adjourned, thus not automatically triggering a veto session.

The governor argues that only bills that trigger a veto session can be considered during the veto session. By not taking a vote in May, the governor reasons, the Senate missed its chance.

Former Missouri Chief Justice Michael Wolff, now dean of the St. Louis University School of Law, told the Associated Press this summer that he thinks the Senate “missed its constitutional window to act.”

It will be up to the Missouri Department of Labor and Industrial Relations to enforce the measure. The department’s spokeswoman said “due to the legal uncertainty surrounding this bill, the department is assessing the situation.”

Missouri lawmakers had already voted to shorten the time workers can collect unemployment benefits in 2011, cutting the length from 26 weeks to 20 weeks. Only seven other states cap benefits at less than 26 weeks.

The new push, advocates said, was aimed at keeping the unemployment insurance fund solvent.

Unemployment benefits are paid for by employers.

Businesses pay a tax per employee per year that goes into the unemployment trust fund to pay out benefits. During times of high unemployment, if demand for benefits exceeds funding, states can borrow from the federal government.

Missouri began borrowing federal dollars in 2008 to pay for jobless benefits after the economic downturn drained the state’s unemployment benefits trust fund. That balance was paid off last year.

McCarty says the changes will help ensure the state isn’t forced to borrow in the future, and thus will save money for employers.

At less than 6 percent unemployment, benefits would be capped at 13 weeks. That would be lower than every state except North Carolina, where benefits currently are capped at 12 weeks under a similar sliding scale.

Benefits would return to 20 weeks if the statewide unemployment rate reached 9 percent.

The bill also prohibits an employee with a severance package from collecting unemployment while receiving the severance pay.

State Sen. Scott Sifton, a St. Louis County Democrat, said cuts to unemployment benefits are “going to make bad recessions worse.”

“It’s going to cut people off faster,” he said. “It’s going to damage the businesses that they patronize faster.”

This story was originally published October 4, 2015 at 8:53 PM with the headline "Fight brewing over Missouri cutting jobless benefits."