State Can Enact Reforms to Support Unemployed

FOR IMMEDIATE RELEASE March 30, 2009

Contact:
Paul Cillo or Jack Hoffman
Public Assets Institute
802-223-6677

Vermont could get almost $14 million in federal money to help laid-off workers if the state reforms its unemployment insurance laws to expand eligibility, and both the Legislature and the administration are taking steps to qualify for the additional money. At the same time, though, the administration is looking for ways to cut unemployment benefits to address a looming shortfall in the unemployment insurance fund.

“During these times when many Vermonters are out of work and need help most, the state should be expanding eligibility and benefits, not cutting them back,” said Public Assets Institute Executive Director Paul Cillo.

The Unemployment Insurance Modernization Act (UIMA), which was rolled into the stimulus package that became law in February, contains incentives for states to provide new or expanded jobless benefits. Vermont already qualifies for some of the new money – about $4.6 million – because it has alternate ways to calculate eligible work history. However, the state must institute additional reforms to qualify for the remaining funds – $9.3 million.

Jack Hoffman, one of the report’s authors, said, “Vermont should adopt all of the UIMA reforms to keep pace with the changing nature of the workforce, which includes many more women and part-time and temporary workers.  The stimulus funds provide a big financial boost that can make that happen.”

Two legislative committees have taken up the reforms in recent weeks. Sen. Vincent Illuzzi, R-Essex-Orleans, the chair of the Senate Economic Development, Housing, and General Affairs Committee, and Rep. Warren Kitzmiller, D-Montpelier, chair of the House Commerce and Economic Development Committee, have both indicated that they want to make the changes necessary to qualify for the additional funding. Hoffman testified before the Senate committee to encourage the members to adopt the reforms.

States can choose among four specific reforms to qualify for the full funding available through the UIMA. Vermont already meets one of the requirements, and the administration has recommended extending unemployment benefits for certain workers in training programs. That would allow Vermont to qualify for the additional $9.3 million. According to Tom Douse, deputy commissioner of labor, providing the extended benefits would cost approximately $1 million a year.

If Vermont adopted all of the additional reforms contained in the UIMA, the department said, it could cost as much as $7 million more a year. Currently, with unemployment rising, Vermont is spending about $5 million a week on jobless benefits.

Public Assets Institute is a nonprofit, nonpartisan organization that promotes sound budget and tax policies to benefit all Vermonters. Additional information is available at www.publicassets.org

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