Feb. 21 Hearing for Bill Restoring Unemployment Trust Fund
The General Assembly’s Labor and Public Employees Committee has set a public hearing for Tuesday, Feb. 21 on a bipartisan bill that would help restore solvency to the state’s unemployment trust fund.
HB 6461 makes a number of overdue reforms to the state’s unemployment system, including:
- Raising the minimum earnings threshold to qualify for unemployment benefits to $2,000. Claimants in Connecticut need only earn $600 in a year to qualify for benefits—the second-lowest earnings requirement in the U.S. For perspective, 32 states and territories require between $2,000 and $5,000 in earnings. Connecticut’s earnings requirement has not changed since the statute went into effect 50 years ago. Savings: $5.6 million annually.
- Prohibiting all claimants from receiving unemployment benefits until they have exhausted their severance pay. According to Connecticut’s Department of Labor, this would save up to $57 million per year.
- Basing benefits on three quarters of an employee’s earnings rather than two highest quarters, to avoid inequitably rewarding seasonal workers. Under current law, a seasonal worker in Connecticut earning $30,000 over two calendar quarters would get the same unemployment benefits as a full time worker who earns $60,000 over four quarters. Savings: approximately $68 million a year.
- Freezing the maximum weekly benefit rate any year we have not attained 70% of the fund’s solvency goal. The maximum benefit rate is allowed to increase by $18 every year, and did increase throughout the recession. Foregoing increases in years when the fund is unhealthy would prevent the problem from getting worse. Savings: approximately $1.6 million per year—without reducing anyone’s benefits from current levels.
Reforms Will Grow Fund
What’s more, these reforms will grow the state’s Unemployment Trust Fund from its current $355 million to more than $750 million over three years.
If the state’s unemployment trust fund can be restored to solvency, it will help prevent future recession-related borrowing by the federal government that resulted in Connecticut paying escalating federal unemployment taxes.
In fact, before repaying the loan, Connecticut businesses paid four times more in federal taxes than neighboring states paid.
Further, restoring the fund to solvency will help reduce the unemployment tax for all businesses in the short term—essentially creating a stimulus package that will be given to every business in the state without costing taxpayers a dime.
Employees aren’t harmed by the proposal either. The bill takes a “do no harm” approach because the savings are targeted at those who do not need unemployment benefits, and those who are being unfairly rewarded by the system.
Please tell your Connecticut state legislators that you support HB 6461.
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