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Lawmakers: State Unemployment Fund Needs Work


Published November 3, 2009 at 4:22 p.m.

A new proposal by the Douglas administration to fix the state's battered unemployment insurance trust fund is expected to draw heat from opponents during a public hearing tomorrow.

Throughout the summer, a special legislative committee has been gainfully employed looking at ways to shore up a fund that House Speaker Shap Smith said “is in desperate need of reform. The fund has been in decline for many years and without reform will go bankrupt."

So, what to do?

The committee is looking a mix of solutions that include everything from reducing benefit levels to increased contributions from employers and short-term borrowing, among other things.

Last month, the biggest news that came out of the committee's hearing was a letter circulated to members by State Auditor Tom Salmon. Salmon recommended changing the maximum benefit to as little as $300,or the levels they were at in 2000. Three other states — Missouri,Nebraska and South Dakota — have this benefit level today.

In Vermont, the current maximum benefit level is $425, although the average benefit paid out is $309 a week.

A special legislative committee will meet at 1 p.m. in the Statehouse to hear from administration officials about a new proposal being floated by the governor. The public hearing will be held from 4 to 6 p.m.

The administration of Gov. Jim Douglas is proposing several changes, some of which opponents claim hurt laid-off workers more than employers — employers who haven't had to pay more into the system for years.

The administration's latest proposal would lower benefit levels from a maximum of $425 a week to $400, saving $5 million in 2010 alone, as well as other changes, including: