Gov: Expand Unemployment Benefits to Include Part-Timers
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March 30, 2009
Richmond, VA – Gov. Tim Kaine will propose changing state law today to extend benefits to recently unemployed people seeking part-time work. The move will open the tap for $125.5 million in federal stimulus money to flow into Virginia's dangerously underfunded unemployment insurance trust.
However, the change is opposed by many employers. They fear that once the federal dollars dry up, they'll have to pay higher taxes to continue the new benefits.
Michael Cassidy, executive director of The Commonwealth Institute, says that view is shortsighted.
"If you don't have unemployment insurance, then you are even more likely to need public assistance like Medicaid, welfare or children's health insurance coverage for your kids. To the extent that we have a more robust unemployment insurance system, we also help avoid costs for public-assistance programs."
If nothing is done, Cassidy adds, business taxes are guaranteed to rise because an automatic across-the-board employer tax increase occurs when the fund balance goes below 50 percent.
Cassidy says Virginia's unemployment insurance system is outdated and lags in many key areas.
"For example, last year, just 26 percent of unemployed Virginians received any unemployment insurance benefits. That is the lowest rate of any state in our region, and fully 30 percent below the national average."
The unemployment trust fund will become insolvent, Cassidy warns, if no action is taken.
More information is available at www.thecommonwealthinstitute.org.