When fiscal times are tough, lawmakers tend to comb through bills closely to find legislation that will help their constituents without costing taxpayers.
Lawmakers need look no further than HB 6461, which helps restore solvency to one of the state's most critical safety nets without costing a penny.
HB 6461 makes a number of overdue reforms to the state's unemployment system, including:
- Raising the minimum earnings threshold to qualify for 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 country.
- Prohibiting claimants from receiving unemployment benefits until they have exhausted severance pay.
- Basing benefits on three quarters of an employee's earnings rather than two highest quarters, to avoid unfairly rewarding seasonal workers.
- Freezing the maximum weekly benefit rate any year we don't reach 70% of the fund's solvency goal.
The legislature's nonpartisan Office of Fiscal Analysis now estimates the reforms in HB 6461 save the fund approximately $114 million in the first year, and about $152 million in subsequent years.
There are massive savings to be had for the fund, but this is not a windfall for businesses.
If the state's fund solvency goal of $1 billion dollars is reached—something that's not projected to happen until after 2020—businesses may see a slight drop in unemployment taxes, provided there's no economic downturn before then.
Lawmakers have an opportunity to make positive reforms to ensure the continued availability of a critical safety net without tapping into the General Fund.
HB 6461, which awaits action in the House of Representatives, is a win for lawmakers, residents, and businesses.