Senate approves unemployment insurance reforms
LANSING—The Michigan Senate approved legislation Thursday to restore the long-term solvency of the state’s unemployment trust fund, reduce fraud and prevent punitive federal fees and interest from being imposed on Michigan employers, said key sponsor Sen. Mark C. Jansen.
“After a decade-long recession bankrupted Michigan’s unemployment fund, the state was forced to borrow money from the federal government to pay more than $3 billion in jobless benefits,” said Jansen, R-Gaines Township. “Michigan job providers will be punished next year for those loans – resulting in a 50 percent unemployment tax increase. My legislation will repay the state trust fund’s debt and stop that federal tax hike on employers in our state.”
Senate Bills 483 and 484, sponsored by Jansen, will pay back the $3.2 billion that Michigan’s unemployment fund owes the Federal Unemployment Insurance system through a ten-year, tax-exempt bond. Without action, Michigan’s trust fund will be indebted to the federal government until 2018 and will not have a sufficient standalone balance until 2022.
Jansen noted that the state’s unemployment system is entirely funded by employers, and that no state general fund dollars or state programs are affected by this bond.
“In addition to ending Michigan’s unemployment debt to the federal government, the package reforms the system to stop fraud, waste and abuse,” Jansen said. “A more efficient system, free of debt, is yet another step to encourage job growth and investment by lifting burdens off of job creators. It will also help restore a balance to the state fund – ensuring that the trust fund never again becomes indebted to the federal government.”
SB 806 includes reforms that will deter fraud, prevent overpayments, and encourage workers to seek employment before exhausting benefits. The bill also limits the ability of a person fired for cause, or who left a job voluntarily from collecting unemployment benefits.
“Protecting this safety net closes a loophole that allowed an embezzler convicted of stealing from his employer to receive unemployment payments – paid for by the employer he stole from,” Jansen said. “Importantly, honest workers who lose their jobs will still receive the same amount of benefits.”
SBs 483, 484 and 806 now head to the House of Representatives for consideration.
Posted: Thursday, December 01, 2011
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