Missouri Business Headlines

Shoring up Missouri’s unemployment fund

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During past recessions, Missouri has needed to take on massive debt from the federal government to pay out unemployment benefits. This cost employers millions of dollars in interest in addition to what they normally pay into the state’s unemployment fund.

House Bill 217 is designed to solve that problem. The bill increases the fund’s minimum balance before employer contributions are lowered and, when necessary, requires the fund’s finance board to meet to consider issuing bonds instead of borrowing federal money at steep interest rates. The bill also ties weeks of benefits to the state unemployment rate, providing more weeks of benefits during a recession and fewer weeks when jobs are plentiful.

Rep. Justin Hill, a Republican from Lake St. Louis, sponsored the legislation. The bill was heard in the House Workforce Development Committee on March 11.

“I think there’s going to be a happy medium here where we can shore up the fund and still provide ample time depending on the economic status of employment in the state of Missouri,” Hill said.

Currently, unemployed Missourians can receive up to 20 weeks of benefits. This bill would change that to a sliding scale. If the unemployment rate is below six percent, benefits last 13 weeks. At nine percent or higher, benefits will last 20 weeks. Between that, every half-percent change in the rate would correspond to a week’s difference in benefits.

The Missouri Chamber has been the lead advocate on this issue for several years.

Matt Panik, Missouri Chamber vice president of governmental affairs, emphasized the importance of increasing the fund balance before employers’ contribution rates are reduced so that less money will need to be borrowed at interest during future recessions. Panik also cited average weeks used in Missouri to illustrate the bill strikes a good balance.

“The average duration of benefits right now is at about 12-12.5 weeks, which corresponds with our current unemployment rate of around three percent. And during the Great Recession when unemployment hovered at around nine percent, the average number of weeks used was about 18.5. These averages fall within the range of 13-20 weeks laid out in House Bill 217,” said Panik.

For more information, contact Panik at mpanik@mochamber.com or 573-634-3511.

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