Scramble Is On To Maintain Jobless Benefits In Pa.
HARRISBURG, Pa. – Heard about the debt?
Pennsylvania’s $3.7 billion – and growing – debt to the federal government for the cost of unemployment benefits accumulated since the recession began has gnawed at state lawmakers for more than two years.
This coming week, the state Senate and House each have scheduled floor votes on substantially different unemployment compensation-related bills as a June 11 deadline to preserve 13 weeks of extra federally funded emergency jobless benefits looms.
That deadline kicked in Friday, when the federal government determined that Pennsylvania’s April unemployment rate dropped far enough to help trigger it.
Republican and Democratic lawmakers appear united in wanting to preserve the 13 weeks of benefits. Without them, 45,000 Pennsylvanians will immediately lose a weekly check, and another 90,000 through the end of 2011 will miss out on those benefits altogether, according to the state Department of Labor and Industry.
But action in the Republican controlled Legislature to keep the 13 weeks – essentially, by making a small change in state law – will inevitably raise debate over how to repay the debt, a subject dogged by partisan disagreement since Pennsylvania’s unemployment compensation fund went broke in 2009. It is now the nation’s largest unemployment compensation debt behind California’s.
The average benefit in Pennsylvania is about $310 a week, and benefits are capped at $564 a week. Currently, the unemployed can get 93 weeks of benefits. Come June 11, seven weeks of federally-funded benefits are set to expire. If the 13 weeks also expire, that would lower the overall benefit to 73 weeks. Regular state-funded benefits last 26 weeks.
The House bill, written by Rep. Scott Perry, R-York, would keep the 13 weeks of federal benefits while also attempting to repay the debt by 2018.
His approach – narrowing eligibility and reducing benefits – is supported by the Pennsylvania Chamber of Business and Industry, but opposed by Democrats, the AFL-CIO and advocates for the poor.
The Department of Labor and Industry estimates that the bill, if enacted, would save $632 million in benefits costs annually, primarily by changing the way a person’s weekly benefit rate is determined. It also would require people to register for employment search services offer by the Pennsylvania CareerLink system as a condition of receiving benefits and reduce the weekly benefit for people who collect severance pay.
Sharon Dietrich, a lawyer with the nonprofit Community Legal Services in Philadelphia, said the department’s estimate is significantly understated because it cannot quantify the effect of a couple of changes to eligibility proposed by Perry. For instance, Perry’s bill would require that benefits are denied to someone who lost a job due to “misconduct,’’ rather than the “willful misconduct’’ in current law. It would also require that someone who leaves a job for compelling personal reasons get benefits only if those reasons are workrelated.
It would not raise unemployment compensation taxes on employers, or employees.
Perry said his bill is sensible, particularly at a time when Pennsylvania is spending money it doesn’t have in its unemployment compensation trust fund.
“It’s insolvent,’’ Perry said. “That eventually could impact people that legitimately need it and it wouldn’t be available.’’
Minority Leader Frank Dermody, D-Allegheny, however, called the bill “an all-out attack on the middle class and working families’’ at a time when people are trying to recover from a recession.
Even if Perry’s bill passes the House, it is unlikely that it would gain much traction in the Senate, where Labor and Industry Committee Chairman John Gordner, RColumbia, favors an approach to solvency that would reduce benefits, limit eligibility and raise taxes on both employers and employees.
He also said he is exploring the concept of issuing bonds to repay the debt, an approach that in theory would lower interest payments below those charged by the federal government.
On Tuesday, the Senate is scheduled to vote on a Gordner bill that takes a much more limited approach than Perry’s.
The bill would keep the 13 weeks while reducing benefits costs by an estimated $50 million a year, in part by adding the same work-search requirement included in Perry’s bill.
It has Democratic support – Gordner’s committee of seven Republicans and four Democrats unanimously approved it earlier this month. But the bill does not represent a broad attempt to pay back the debt, an aim that Gordner suggested isn’t realistic within the three weeks before the June 11 deadline.
“I think we need to take a look at it,’’ Gordner said, “but basically we were given a short drill here.’’