Unemployment insurance

The Unemployment Insurance Issue and the Governor’s Race

Aug 5, 2009 By Paul Burka

Let's just start out by reviewing what has happened so far. As those who have followed the debate know, $555 million in federal stimulus funds was available for Texas, provided that the Legislature agree to make several changes that increased the number of people who would be eligible for UI benefits. --changing the base period for calculating UI benefits to include employment in the most recent quarter. To be eligible for stimulus funding, a state had to make this change. In addition, a state had to adopt two of the following three changes: 1) eligibility for family members who leave their jobs for a compelling family reason (such as a spouse getting a new job in another city, or leaving work to care for a family member) 2) eligibility for a person seeking only part-time work 3) eligibility for a person who is currently enrolled in a job training program These changes, if made by statute, would increase benefits by $72 to $75 million per year, in perpetuity. Governor Perry decided to turn down the funds rather than subject employers to these additional costs. Senator Kevin Eltife passed a bill through the Senate that would have allowed the Legislature to override the governor's decision, but it had no chance to become law, and Texas did not receive the $555 million that was available. I thought at the time that Perry was showboating and had made a decision based on politics and ideology, and I said so in this space. He was showboating. Still, there is more to be said about this topic. I assume that most readers know that UI benefits are paid from a trust fund that is funded by a tax on employers. (Actually, employers pay two taxes. One is a benefits tax designed to ensure that enough money is available to pay benefits to the unemployed. The other is a deficit tax designed to raise enough money so that the unemployment trust fund remains above a certain level, which is 1% of total taxable wages in Texas, or around $86 billion, but below a ceiling of 2% of taxable wages.) Yet another drain on the trust fund is a statute that allows money to be shifted from the trust fund to the governor's Texas Enterprise Fund, when the trust fund balance is above the 1% floor. Employers might well contemplate whether it is wise for their tax dollars to be used for reasons other than keeping the trust fund in sound condition. Then employers will be taxed again to refill the coffers of the UI trust fund, so that yet more dollars can be shifted to the Enterprise Fund.

Watching paint dry

May 22, 2009 By Paul Burka

How else to describe the pace of House debate? I can’t recall another session when the default option was for both parties to chub every bill. The debate over the unemployment insurance bill was particularly dilatory. Why is this bill even being debated? Rick Perry has drawn his line in…

Perry wins on UI stimulus

May 13, 2009 By Paul Burka

Eltife’s bill to make the changes necessary for Texas to be eligible to get $555 million in funds for unemployment insurance will die in the House. A poll of the floor yielded around 80 votes for the bill, and since the 74 Democrats are presumed to favor it, that means…