Click to hear KMZU’s Mike Stone speak with State Representative Scott Fitzpatrick of the 158th District.
House Bill 150, the Unemployment Benefits Bill, is designed to address an embarrassing problem with the state’s unemployment record. State Representative Scott Fitzgerald of the 158th District explains.
“Missouri is the only state that has completely ran out of money in the stat’s unemployment trust fund, for the last 5 recessions. What happens when that occurs is we have to keep paying unemployment benefits, either by way of borrowing money from the federal government or by issuing debt/issuing bonds,” Fitzpatrick said.
“Since it’s a reoccurring problem the goal was to address that so we don’t always end up having to borrow money to finance our unemployment obligations.”
Fitzpatrick, the bill’s sponsor, tells us what that leads to.
“The employers in our state begin to lose their Federal Unemployment Tax Credit. Every employer pays a 6% unemployment tax to the federal government, but they automatically get a 5.4% credit against that, so they’re only paying about a 6/10th of a percent tax,” the lawmaker said.
“And when the loan balance exists for more than two years, each year beyond that the businesses lose 3/10ths of a percent of that credit. And that additional tax comes in the form of a bill the employer receives from the federal government.”
It also will determine how long a covered employee will receive benefits.
“We’ve indexed the duration of unemployment benefits to the unemployment rate, so when the economy is doing better, the duration of benefits is not as long. When the economy is doing poorly and it’s harder to get a job the benefits will last longer than when the economy is good,” the representative explained.
“That will help preserve fund balance by shortening the duration and indexing it to the unemployment rate. That will help preserve fund balance for when the economy does get bad, we can finance those obligations without having to borrow from the federal government.
House Bill 150 is now before the Senate. To read the bill for your self click here.