Roll Call! Senate Delays Funding Unemployment, Increases Unemployment Benefits (18-12), 2021

S.10 AN ACT RELATING TO EXTENDING CERTAIN UNEMPLOYMENT INSURANCE PROVISIONS RELATED TO COVID-19

PASSED
in the State Senate
on March 30, 2021, by a vote of
18-12

Purpose: The original S.10 bill called for postponing funding the Unemployment Insurance Trust Fund, giving extra unemployment benefits to parents and increasing unemployment benefits by 20%. The Economic Development Amendment removed the 20% benefit increase and leaves the remaining provisions.

Analysis: In January 2020, Vermont’s Unemployment Insurance Trust Fund stood at $511 million. In June 2020, Governor Scott announced a 1-year reduction in employers’ unemployment insurance taxes and an increase in the maximum weekly benefit amount for claimants. This overruled the automatically adjusting statute for stabilizing the Fund. Due to reduced employer taxes, increased benefits per claimant, high numbers of claims and fraud, the Fund now stands at $243 million in January 2021, a decrease of more than 50% from January. If the tax reduction expires before July 2021 without legislative action, Vermont businesses would pay the old, higher contribution taxes necessary to stabilize the Fund.

This bill would delay those increased taxes until 2031, costing $42 million less in annual average Fund taxes/contributions. If the Unemployment Fund falls below $90 million, employers would have to start contributing the increased amount.

Unemployed claimants would receive an extra $50 weekly benefit if they have “one or more dependent children under 18 years of age.” The Vermont Department of Labor and the Joint Fiscal Office estimate the cumulative cost of this extra $50 benefit at $13-29 million annually. This provision would last for 5 years, conceivably long after Covid-19 ceases to be threat. Vermont has the 16^th highest maximum weekly benefits in the country ($531 a week).

Finally, the “Commissioner of Labor shall conduct a review of the solvency of the Unemployment Insurance Trust Fund.”

Those voting YES view S.10 as a compromise bill, since “many businesses favored the dependency benefit over that 20% increase” (Sen. Sirotkin). The frozen contribution section “saves employers approximately $66 million dollars next year” and is a “much smaller ask on the trust fund, than what was in the underlying bill.” They frequently mentioned how mothers who make up a “pretty small size of the Vermont population… between 3000-6000 people” can really use another $50/week. As for the suggestion that the added benefits expire when the emergency is lifted, another $50 “might mean a car repair, getting their kids back to child care and getting new professional clothes” (Sen. Ram). There won’t be a large disincentive to not work, since “this benefit is only going into effect after the federal benefits go away” (though there is nothing in this bill tied to federal benefits). Vermont businesses don’t “have time to wait on” federal money coming in. “For the last 40 years (the system) has been used to shovel money from those that have little to those that have plenty.” This bill will help change “the system. (Sen. McDonald).

Those voting NO did so because they see “federal dollars (coming) that may help us in the short term, to protect those very same people which this legislation seeks to do, without having an impact on the very trust fund that is necessary to protect the system” (Sen. Benning). The Legislature has a “fiduciary responsibility to protect the system” of unemployment funding which is being drawn down. This insurance could become a “continuing obligation that could extend beyond the pandemic. Why would we not tie the sunset of that benefit to the lifting of the declaration of emergency?” (Sen. Collamore) This unemployment underfunding situation is eerily similar to how Vermont legislators underfunded the state pension funds 15 years ago.

As Recorded in the Senate Journal, Tuesday, March 30, 2021: "Shall the bill be amended as recommended by the Committee on Economic Development, Housing and General Affairs, as substituted?, was decided in the affirmative on a roll call, Yeas 18, Nays 12." (Read the Journal, p. 429).

View the floor debate on YouTube.

These roll call reports are designed to help citizens understand how their elected representatives vote on key issues. The bills may or may not eventually become law. Click on the link to the bill page at the top of this post for an up to date status on the bill.

How They Voted

Becca Balint (D-Windham) – YES
Philip Baruth (D-Chittenden) – YES
Joseph Benning (R-Caledonia) – NO
Christopher Bray (D-Addison) – YES
Randy Brock (R-Franklin) – NO
Brian Campion (D-Bennington) – YES
Thomas Chittenden (D-Chittenden) – NO
Alison Clarkson (D-Windsor) – YES
Brian Collamore (R-Rutland) – NO
Ann Cummings (D-Washington) – YES
Ruth Hardy (D-Addison) – YES
Cheryl Hooker (D-Rutland) – YES
Russ Ingalls (R-Essex-Orleans) – NO
M. Jane Kitchel (D-Caledonia) – NO
Virginia Lyons (D-Chittenden) – YES
Mark MacDonald (D-Orange) – YES
Richard Mazza (D-Chittenden-Grand Isle) – NO
Richard McCormack (D-Windsor) – YES
Alice Nitka (D-Windsor District) – YES
Corey Parent (R-Franklin) – NO
Chris Pearson (P-Chittenden) – YES
Andrew Perchlik (D-Washington) – YES
Anthony Pollina (P/D-Washington) – YES
Kesha Ram (D-Chittenden) – YES
Richard Sears (D-Bennington) – NO
Michael Sirotkin (D-Chittenden) – YES
Robert Starr (D-Essex-Orleans) – NO
Joshua Terenzini (R-Rutland) – NO
Richard Westman (R-Lamoille) – NO
Jeanette White (D-Windham) – YES

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