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PA Chamber members push for additional Unemployment Compensation reform in 2012
Enactment of pending legislation necessary to begin addressing UC Trust Fund debt
Business leaders are urging state lawmakers to consider additional unemployment compensation reforms in order to address the system’s debt to the federal government. For years, the PA Chamber has argued that the state’s lax UC law allows too many claimants with little attachment to the workforce to access a system intended to be a temporary safety net for those out of work through no fault of their own. Legislative inaction on tightening eligibility, coupled with the recent recession, led to the UC Trust Fund’s current insolvency and $4 billion federal debt. Last year, the legislature took necessary steps to improve the system by enacting legislation that requires claimants to prove they’re looking for work in order to receive UC benefits. Act 6 of 2011 also established a 40 percent severance offset to prevent claimants from receiving UC and full severance payments at the same time; and implemented cost-saving measures that will annually save the system an estimated $133 million. While PA Chamber members applaud the new law, the fact that it did not address the UC Trust Fund’s insolvency led to a call for continued action. Senate Bill 1310, which awaits final Senate approval before being sent to Gov. Tom Corbett for his signature, would begin to address the state’s UC Trust Fund debt. The bill would authorize bonding to pay off what is owed to the federal government, while improving the fund’s cash flow. The measure would also establish a temporary amnesty program to let delinquent businesses waive 50 percent of their interest payments if they pay the principal debt in full; and would reduce system abuse by allowing the Department of Labor and Industry to recoup illegitimate overpayments to businesses that have been evading UC taxes. In a recent Pennsylvania Independent article, PA Chamber Vice President of Government Affairs Sam Denisco likened the bill to transferring the balance of a credit card with a 20 percent interest rate to a card with only a 3 percent interest rate – in this case effectively reducing the UC Trust Fund debt’s drain on job creators without raising taxes.
Last year's progress with unemployment compensation reform has the business community encouraged that 2012 will also be a year for more commonsense, positive change. The PA Chamber is encouraging both enactment of S.B. 1310 and a continued dialogue with lawmakers about restoring the UC system to its intended purpose, preventing the same problems from occurring again.
### Founded in 1916, the Pennsylvania Chamber of Business and Industry is the state's largest broad-based business association, with its membership comprising businesses of all sizes and across all industry sectors. The PA Chamber is The Statewide Voice of Business. |
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