Legislative Republicans are proposing an overhaul of the state’s unemployment insurance program to shore up the UI fund, crack down on fraud and cut the number of weeks laid-off workers could receive benefits unless the jobless rate is at historic highs.
But the plan also includes the first bump in weekly payments in four years.
Lawmakers outlined the package in a letter circulated Friday for co-signers ahead of sending it to the Unemployment Insurance Advisory Council. They noted in the draft letter the Unemployment Insurance Trust Fund is still $900 million in the hole. That’s an improvement from the $1.5 billion debt at its high mark, but employers still face additional assessments this year and next to get out of the debt, the letter warned.
Rep. Dan Knodl, one of the backers of the package, said the higher taxes faced by employers have made it difficult to hire more workers or invest in infrastructure.
“Our businesses cannot afford to wait any longer for a solution,” he said.
Gov. Scott Walker shares concerns about the solvency of the Unemployment Insurance Trust Fund and the possible impact on businesses, a spokesman says.
“The governor included provisions in his budget to address these concerns and will continue to work with the Legislature and the UI Advisory Council to reduce the impacts on Wisconsin’s small businesses and workers,” Walker spokesman Cullen Werwie said.
Dem legislative leaders didn’t immediately respond to requests for comment.
The lawmakers will ask the unemployment insurance council to adopt the changes. It was unclear whether lawmakers would take up the changes in legislation if the council declines.
The letter draft also mentions a one-time GPR transfer to the UI Trust Fund to “protect Wisconsin small businesses from another federal assessment.” It also mentions a temporary transfer of state dollars to improve the federal UI tax rate.
Some of the proposed changes include cutting the number of exceptions under which those who quit their jobs can still claim unemployment. There are now 18 under state law; the package calls for just seven.
It also calls for prohibiting prison inmates from collecting unemployment and increasing the number of job searches those on unemployment have to perform to stay eligible. The standard would increase to four per week from the current two.
Under current law, laid off workers can claim up to 26 weeks of unemployment from the state. But the GOP package calls for a sliding scale of 12 weeks when Wisconsin’s unemployment rate dips below 5 percent up to 26 weeks when it hits 8 percent or higher.
According to the Department of Workforce Development, the state’s unemployment rate hit 8 percent or higher between August 1980 and January of 1984, as well as from March 2009 through November 2010. The unemployment rate for February was 7.2 percent, which would equate to 22 weeks of benefit eligibility under the proposed scale.
The package also calls for ending an extension of benefits for claimants enrolled in approved training that now lasts up to 26 weeks. The program costs were originally covered by the federal government, but the trust fund now pays for the extension.
The proposed bump in benefits calls for a maximum of $370 per week, an increase of $7, and pushing the minimum weekly payment to $55, up $1.
Speculation has swirled in recent weeks that Republicans would seek to alter the makeup of the Unemployment Insurance Advisory Council. The council is now evenly split between business and labor representatives and usually votes unanimously on changes to the unemployment program.
The letter makes no mention of changing the council. The office of GOP Sen. Frank Lasee, another lead lawmaker on the proposals, said there are no changes to the council in the full package.
— By JR Ross