Update On Unemployment Fund And Benefits Headline Capitol Hill Week
MARCH 13, 2009
The Senate Commerce Committee heard testimony this past week from Labor Commissioner James Neely regarding the status of Tennessee’s unemployment trust fund and the potential impact of stimulus money coming to the state as a result of the American Recovery and Reinvestment Act. Commissioner Neely urged committee members to take action to “shore up” the fund or face the possibility of borrowing from the federal government if it becomes insolvent. Neely predicts the state unemployment fund will be broke in just over a year if things continue to deteriorate at the current rate.
Meanwhile, Finance Commissioner Dave Goetz appeared before our Senate Finance Committee on Thursday to give notification of an expansion of the budget to provide an additional $25 per week in unemployment benefits under the federal stimulus plan, beginning immediately. This money is very much needed by many families across our district who are suffering job loss due to the recession. In addition, the administration will bring legislation that would allow for the extension of unemployment benefits of up to 59 weeks. Presently, Tennessee provides 26 weeks of unemployment assistance, but additional benefits can be paid in times of high unemployment under federal extension programs.
Tennessee’s statewide unemployment rate for January was 8.6 percent and is estimated to have now risen to over nine percent. Neely said rural communities, like several in our senatorial district, have been particularly affected by the recession, with Perry County in West Tennessee having a rate of over 27 percent. Cities have a more diverse workforce, many of which are service-oriented, a sector of the job market that has not taken as hard a hit as those jobs found in rural areas.Due to the rise in unemployed workers, Tennessee’s unemployment fund has decreased from $609 million last July to a current level of $269 million. Current law provides that taxes are raised on employers as the reserves in the trust fund decline based upon each business’s layoff experience. The administration will present a plan to our legislature next week to address the solvency of the fund.
Neely said the federal stimulus money coming into the state as a result of the American Recovery and Reinvestment Act “would help get employers off the highest tax table sooner.” The stimulus package does, however, have strings attached in order to receive the funds. The federal act requires states to enact three options from a menu of five expansions of benefits. These include:
- providing unemployment benefits to part-time workers
- giving jobless benefits to some who voluntarily leave their jobs for a list of family reasons, such as quitting a job to relocate to another area if a spouse moves
- increasing benefits for applicants with dependents by $15 per dependent per week with a $50 limit
- extending benefits if job training is involved
- changing the time period in which applicants are determined to be eligible for unemployment to include the present quarter prior to being laid off
Finally, Neely told the committee the administration’s bill proposes changing the time period in which applicants are determined eligible, providing part-time workers with benefits, and adding the increased payment to applicants with dependents.
We will continue to monitor the money for unemployment benefits as they flow through the state to those in our communities. It is also very important that we work at the state and local level to bring new jobs to our area as we weather this worldwide economic storm. I will keep you updated as our legislative session continues.
