Friday, April 24, 2009

Kendrick B. Meek (D-FL) Urges Lawmakers to Pass Legislation Putting Florida in Compliance with Unemployment Insurance Modernization Provision of the E

Congressman Kendrick B. Meek (D-FL) wrote Florida Governor Charlie Crist urging him to work with the Florida legislature to enact legislation putting Florida in compliance with the Unemployment Insurance Modernization Provision of the recently enacted American Recovery and Reinvestment Act (the economic recovery package).

“The economic recovery bill was meant to jumpstart Florida’s economy by providing critical federal dollars to state and local governments. These funds will only be available to Florida if the state is in compliance with the federal government’s guidelines. Leaving money that is due to Florida on the table cannot happen and leaders in the state must act now to reap the full benefits of the economic recovery package,” said Congressman Kendrick Meek.

The American Recovery and Reinvestment Act (ARRA) provides up to $7 billion in modernization grants for states that already have enacted or will enact legislation implementing specific reforms to increase access to Unemployment Insurance benefits for jobless workers. This provision in the ARRA will provide approximately $444.3 million to Florida to boost their unemployment programs.

In order to be compliant, the State must implement two of a possible four reforms: (1) Extended UI while in Training; (2) Part-Time Worker Coverage; (3) Weekly $15 Dependent Allowance; (4) Compelling Family Reasons for Leaving Work (includes ALL 3 of the following provisions: Domestic Violence, Spouse Relocation; and Illness & Disability) and affirmatively take these steps:

(1) To receive 1/3 of the funding, the State must enact an alternative base period, which ensures that the last completed quarter of a worker’s employment is counted when determining eligibility for unemployment benefits. The Florida Agency for Workforce Innovation estimates that this will cost $51.3 million per year

(2) To receive the remainder of the funding, a State must enact 2 of 4 other provisions. The Florida bills SB 516/HB 1333 reflect that Florida has chosen

(1) The provision to permit former part-time workers to seek part-time work. This is estimated to cost nothing.

(2) The provision to permit voluntary separations from employment for compelling family reasons. The estimate for this is $22.4 million per year.

SB 516/HB 133 cost estimates are $74 million per year estimates the Florida Agency for Workforce Innovation.

The $444.3 million grant would cover more than 6 years of these costs

During a Ways and Means Committee hearing held in Congress yesterday, Congress Meek asked Ray Uhalde, Senior Advisor to the Secretary of the US Dept of Labor if these provisions can later be repealed by the state. Mr. Uhalde testified that states are expected to make a good faith effort to comply with UI provisions. Florida can repeal these provisions if they would like and would not have to pay back the $444.3 million.

The National Employment Law Project (NELP) calculates that the added UI Modernization funding could have the effect of slashing the potential tax increase on impacted employers by $105.6 million. This is a 20% reduction from the expected $528 million increase in taxes. According to the National Employment Law Project, the projected infusion of federal money into the state’s unemployment insurance trust fund would lower expected increases to UI taxes by $105.6 million.

To date, 27 States have adopted these modifications and the Department of Labor expects that these states will soon complete the process and become fully compliant. Florida is not one of these 27 States, despite its high unemployment rate.

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