LANSING, Mich. (AP) – In Michigan, where the unemployment rate has soared above the national average for years, any proposal with the potential to affect jobless benefits stirs emotions at the state Capitol.
That’s certainly the case with Republican-sponsored legislation recently approved by the Senate and awaiting a vote in the House.
The bills would help stabilize Michigan’s sagging unemployment trust fund, which because of the high jobless rate has shelled out more money in benefits than it has collected in payments from employers financing the system. Michigan has borrowed money from the federal government to help make jobless benefit payments, racking up a $3 billion debt.
Two bills approved with overwhelming bipartisan support in the Senate would help Michigan pay off that debt by issuing bonds, which could ease the future burden on employers that pay into the jobless benefits system. But a third bill – which supporters say will deter fraud, prevent overpayments and encourage the unemployed to seek jobs before their benefits run out – angers Democrats who are the minority party in the state Legislature. They say the measure could make it tougher for some to get and keep jobless benefits.
Democrats consider that a bad move when Michigan has a 10.6 percent unemployment rate, tied for third-highest in the nation. And the requirements would come on top of an earlier law that will cut the length of time that jobless workers can get state benefits from the current 26 weeks to 20 weeks, starting with new filers in 2012.
“Michigan residents who receive unemployment are faced with one of the greatest challenges in their life,” said Sen. Morris Hood III, a Democrat from Detroit. “To go on unemployment means you’re at your last resort, and the system is designed to provide a helping hand through a difficult time. Further restricting access to unemployment benefits pulls the rug out from underneath Michigan workers at a time when they’re depending on this important safety net more than ever.”
Democrats were so irritated by the bill that they used a procedural move to delay a vote for more than four hours, requiring Senate clerks to formally read the roughly 200-page measure.
The bill would further limit the ability of a person who was fired for cause or who may have left a job voluntarily to collect jobless benefits. An employee could be considered to have left work voluntarily if he or she missed at least three consecutive work days without contacting the employer. An employee who negligently loses a requirement for holding a job also would be considered to have left the job voluntarily.
And after collecting jobless benefits for a certain period, available work could no longer be considered “unsuitable” if it was outside the unemployed worker’s previous experience, or if it paid lower wages in some cases. The Michigan League for Human Services says that would require people to accept jobs with wages and skill levels far below the jobs they lost.
Republicans counter that the measure simply would prompt unemployed workers to accept jobs when they’re available.
“These bills that we passed, I believe, are going to encourage people to get back to work but not punish those who cannot actually find work and are unable to get a job,” said Sen. Bruce Caswell, a Republican from Hillsdale.
Republicans say the overall package is designed to eliminate debt in the unemployment benefits system and make the state more business-friendly. The bill would require some employers to pay unemployment taxes on a larger portion of their employees’ wages. Other changes, however, would save money for employers paying into the state’s unemployment insurance program. And the bonding plan could allow Michigan employers to avoid higher payments that otherwise would be needed to repay the federal loans.
Republican Sen. Dave Hildenbrand of Lowell said the bills will help end a “seemingly endless barrage of increased taxes, interest and penalties” resulting from the repayment of federal loans.
“Small businesses are looking for ways to strengthen and expand,” Caswell said. “They would like to see the state’s federal unemployment debt reduced, which would in turn reduce their financial burden, enabling them to invest and create jobs.”
The bills approved Thursday include Senate Bills 806, 483 and 484.
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