Texas must ease rules on unemployment benefits to get stimulus money

The Austin American Statesman is reporting today that the lure of $555 million in federal stimulus money for additional unemployment insurance has Texas legislators mulling whether to expand unemployment benefits to more workers.

To get the stimulus money, Texas would have to implement some key changes to state law — including modifying some eligibility requirements to include tens of thousands of low-wage workers. Such changes have been considered but not enacted in previous sessions.

"Unemployment is rising in Texas — the state unemployment rate was 6 percent in December, up from 4.2 percent a year ago. Benefits paid last week were more than double those paid the same time last year.

More laid-off workers also means that the trust fund that pays benefits is being depleted. The Texas Workforce Commission has projected a $750 million deficit that will require the commission next fall to raise taxes on employers and borrow money to refill the fund.

The federal money could lessen the need for new taxes on business, said state Rep. Mark Strama, D-Austin, who is chairman of the Technology, Economic Development and Workforce Committee.

'Failure to adopt the policy changes ... would result in a higher burden on business taxpayers in the immediate and near term during the recession' than would expanding the benefits...."

Getting any of the federal money requires Texas to alter the work period used to determine unemployment eligibility and benefits to a worker's four most recent quarters of employment. The article states that twenty-one other states already use this method.

The current Texas system does not consider the most recent quarter of earnings and instead uses the previous four quarters. Advocates for low income workers argue that creates an artificial time frame that particularly affects low-wage workers who go in and out of the work force.

 

Read the entire article here.