March 11, 2019
Associated Industries of Missouri (AIM) President and CEO Ray McCarty testified today before the House Workforce Development Committee in favor of HB 217, an unemployment reform bill sponsored by Rep. Justin Hill.
The bill is nearly identical to a bill previously passed by the General Assembly and vetoed by then-Gov. Jay Nixon. AIM worked to override the veto and was successful. However, because the House had voted to override the veto during the regular session and the Senate voted to override the veto during the constitutionally-required veto session, the Missouri Supreme Court voided the law on procedural grounds.
Since then, AIM and other employer groups have worked to pass the bill again.
The bill would reduce the number of weeks of unemployment benefits during periods of low unemployment: from 20 weeks when unemployment is at 9% or above, to 13 weeks when unemployment is at or below 6%.
The bill would also reduce or eliminate unemployment compensation to former employees receiving severance pay or termination pay. McCarty told the Committee this was an important part of the bill.
“35 other states have already fixed this ‘double-dipping’ problem with unemployment benefits, including the State of New York,” said McCarty. “New York is not generally known as a conservative state, but in this case, they have fixed a problem that still exists in Missouri.”
McCarty also explained the history behind a provision in the bill requiring the Board of Unemployment Fund Financing to meet to consider whether to issue bonds to generate money for the Unemployment Trust Fund when that Fund’s resources are depleted.
“During the last recession, Missouri faced a large deficit in the Unemployment Trust Fund,” he said. “The federal government allowed states, including Missouri, interest-free loans for a period, but we wanted the Board to meet to consider issuing bonds should the federal interest-free program end. Although empowered in statute with that authority, the Board never met to consider that option. This legislation would simply require them to meet and consider the option.”
“The Unemployment Trust Fund is funded by employers,” McCarty reminded the Committee, “so we want to be sure we are getting the best possible deal.”
The Committee took no action on the bill.