GOP lawmakers may be warming to changing Florida unemployment system to get more federal stimulus cash
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By JOHN KENNEDY
The News Service of Florida
Wednesday, October 28, 2009
TALLAHASSEE â€" With Congress poised to extend jobless benefits, the red ink flooding Florida's unemployment compensation system is deepening and now also spurring renewed calls for change from both Democrats and Republicans.
Florida will already owe the federal government $126.9 million in 2011 and another $199.4 million the next year on the almost $500 million in loans received so far to cover benefits for the state's jobless, a new state report shows.
That debt - coming straight out of tax collections also used to finance schools and social programs â€" is expected to climb once Congress approves an extension, a virtual certainty as unemployment mounts nationwide.
U.S. Senate Democrats say 7,000 Americans-a-day are exhausting benefits.
Last month for the first time in state history, more than 1 million Floridians were out-of-work - with the unemployment rate hitting 11 percent, the highest toll in 34 years.
As of Wednesday, 60,713 Floridians had run out of benefits, the state's Agency for Workforce Innovation said.
Sen. Dan Gelber, D-Miami Beach, told the News Service of Florida that the state's financial woes underscore the need to revamp Florida's unemployment compensation system.
Last spring, business groups beat back efforts to accept $444.3 million in economic stimulus money because it could force them to pay more in unemployment taxes and benefits in the future.
"I would love to see that money in state coffers, especially now," Gelber said. Unlike the federal loans now keeping Florida's compensation fund afloat, the stimulus money does not require repayment.
While Republicans endorsed the business side last year, Florida's worsening finances may be weakening that support.
"I'm very receptive to the idea of getting more money from the feds if there are no real strings attached," said Sen. Durell Peaden, R-Crestview, who, like Gelber, is a member of the Senate Commerce Committee.
Senate Finance and Tax Chairman Thad Altman, R-Viera, said it also was time to revisit the idea of accepting more stimulus money.
"We should leave our options open," Altman said. "This money doesn't just help individuals who are hurting, it might help our economy bounce back."
Thirty-four states have adopted the alternative base period system which Gelber advocates, 17 of them this year once the federal stimulus cash was put on the table.
"If you do modernize, it's free money," Gelber said. "We could sunset the law after we get the stimulus money. But businesses don't trust the Legislature to do that."
The changes require lawmakers to extend benefits to some part-time workers; those with dependents and workers leaving a job for family reasons.
Business groups argued the stimulus money would not offset the future expense of covering a larger pool of workers. Businesses last spring did support an increase in the unemployment tax rate - approved by lawmakers. But they fear the alternative base proposal.
"It will allow more people to receive benefits that will just cost businesses more money," said Randy Miller, lobbyist for the Florida Retail Federation.
An analysis by the Senate Commerce Committee, scheduled to be reviewed by lawmakers next week, puts Florida's unemployment compensation deficit in simple terms.
"The unemployment payments have greatly increased as tax collections decreased," committee analysts found.
The unemployment compensation fund, financed by taxes employers pay on their workforce, had a $1.3 billion surplus as recently as December 2008. But as Florida's jobless rate skyrocketed, the fund fell into deficit for the first time in state history.
The deficit is likely to deepen under legislation advancing in the U.S. Senate, which would provide 14 weeks in extra financial aid for everyone exhausting their benefits by the end of the year and another six weeks for those living in 27 states, including Florida, where the unemployment rates tops 8.5 percent.
Florida unemployment benefits usually last 26 weeks, but federal extensions allow payments to continue for some for as long as 79 weeks, according to AWI.
The White House is supporting the latest proposed extension, saying that, "Helping unemployed workers is an effective way to boost the economy and an important part of the administration's broader efforts to move swiftly and aggressively to jump start job creation and grow our economy."
http://www.palmbeachpost.com/opinion/content/state/epaper/2009/10/28/flastim1029.html?cxntlid=inform_artr
I saw the Dept of Labor stats yesterday and they showed Florida with 9.9 million workers in September, and that unemployment was over 1 million. Crazy times.