Bill further slashes unemployment benefits, AFL-CIO cries foul | Arkansas Blog

Tuesday, February 14, 2017

Bill further slashes unemployment benefits, AFL-CIO cries foul

Posted By on Tue, Feb 14, 2017 at 10:00 AM

The AFL-CIO is calling attention to legislation to further cuts in unemployment benefits, on top of recent legislation to raise the income tax on unemployment benefits to help pay for an income tax exemption for military retirees.


It's a windfall for business, already helped by $110 million in benefit cuts since 2011 (with no additional charges to businesses) to retire a deficit in the unemployment benefits trust fund that accumulated during a recession and high unemployment. Unemployment has been at record low levels in Arkansas for months.

So now comes legislation to allow business to enjoy a windfall, while making workers pay.

The legislation decreases the taxable wage rate from $12,000 to $10,000, still higher than some states. But .... the bill would cut unemployment benefit coverage from 20 weeks, already tied for lowest with all surrounding states, to only 16 weeks, by far the lowest in the region. It would also further reduce benefits by changing the formula for payments, from 1/26th to 1/30th of the base wage period.

The legislation claims it's aimed at stability for the unemployment fund. But that fund, once in arrears, is growing steadily, now to more than a half-billion dollars. Said the AFL-CIO:

Fiscal Responsibility is important for our State. We understand that when tough economic times hit we take the appropriate steps to reconcile any shortfalls in state revenue. As you see here, Arkansas workers and their families have taken almost all of the cuts since 2011. How can we lower Employers’ taxable wage base back to pre-recession levels and not return benefits to pre-recession levels, but rather cut them even further….and tax them??? 
Answer: Easy.

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