It might get harder to be unemployed in Florida

Florida House Speaker Dean Cannon, R-Winter Park, left, and Senate President Mike Haridopolos, R-Merritt Island, both have plans to revamp unemployment benefits. A House bill passed Thursday would cut benefits pay for business tax cuts.

SCOTT KEELER | Times

Florida House Speaker Dean Cannon, R-Winter Park, left, and Senate President Mike Haridopolos, R-Merritt Island, both have plans to revamp unemployment benefits. A House bill passed Thursday would cut benefits pay for business tax cuts.

TALLAHASSEE — Florida is a tough place to be out of work. And it could get worse.

The Republican-led House approved a bill on Thursday that would finance a tax cut for businesses by reducing benefits paid to unemployed Floridians.

The move comes on the heels of a study that shows the state's relatively meager unemployment insurance is already more difficult to collect than almost anywhere in the country.

Hoping to force Republicans to reconsider the bill, House Democrats cited the National Employment Law Project study, recounted a litany of middle-class struggles and invoked a higher power.

"For God's sake," Rep. Daphne Campbell, D-Miami, yelled in vain from the House floor, "let's all of us — all of us — vote 'no' for this bill."

The bill passed, 81-39, just hours after Florida's unemployment rate was announced at 11.9 percent, close to the state's modern era record of 12 percent set in December and higher than every state but Nevada and California.

The most controversial change in the House proposal (HB 7005) would cut business taxes by at least $18 per worker, or about $747 million over five years.

To pay for the change, state jobless benefits would drop by $1.3 billion during that same time by reducing the amount of time the state would pay unemployment insurance, from 26 weeks to as few as 12 weeks. The maximum weekly unemployment payment of $275 would remain unchanged.

Labor unions are fighting the changes. They have erected a military-style M*A*S*H tent on the lawn of the Leon County Courthouse across from the Capitol to symbolize the cuts.

Protesters crashed a hearing on the issue on Wednesday singing This Little Light of Mine and are planning another demonstration on April 9.

Gov. Rick Scott supports the House bill, but Republican leaders in the Senate have their own plan.

The Senate proposal (SB 728) would not cut benefits and the chamber's top leader has shown little interest in doing so. "It's not one of my big-ticket items," said Senate President Mike Haridopolos, R-Merritt Island.

Instead, the Senate bill would, among other things, make it easier for a business to show employees were fired for cause, preventing them from receiving benefits. Unemployment tax rates for businesses are largely tied to the number of ex-workers receiving jobless benefits.

"We're not looking to hurt unemployed people," said Sen. Nancy Detert, R-Venice. "We're looking to make sure that our system is solvent and can pay the benefits when they're needed."

But in Florida, about 23 percent of new unemployment claims were rejected as "monetarily ineligible" in the quarter ended Dec. 31. Nationally, the rejection rate is half of that, closer to 10 percent.

According to the study from the employment law project, an advocacy group for low-wage workers, Florida ranks 49th out of 53 areas based on how many of the state's 1.1 million unemployed residents received payments from the state's regular 26 weeks of unemployment coverage.

From the group's analysis:

• Only 23 percent of Florida's jobless were receiving state benefits, a percentage that continues to drop as more people exhaust unemployment aid while still unable to find a job.

• Add in those who received money through one of the federal extensions that have provided up to 99 weeks of total coverage and Florida distributed unemployment benefits to about 55 percent of its jobless (national rank: 44th).

• The average weekly payout was about $229, according to the latest available breakdown (rank: 44th).

• The most anyone could receive was $275 a week (rank: 46th).

Why so tough to qualify?

For one, employees have to work more hours in Florida to qualify for unemployment benefits because the state doesn't count the most recent earnings in the application.

For another, most states qualify workers for unemployment benefits after six months on the job; in Florida, the minimum is nine months. That automatically limits the pool of applicants for a state like Florida that relies largely on cyclical industries such as tourism and agriculture, said Andrew Stettner, the group's deputy director.

Being stingy has its upside.

It's a disincentive to cheating the system. It eases the burden on financially strapped small businesses from paying more in unemployment taxes. In short, it has helped minimize the damage to Florida's budget as it maneuvers through the worst economic downturn since World War II.

Consider the state's unemployment trust fund, funded by employers and tapped to pay unemployment benefits.

So far, the state has borrowed $2.1 billion from the federal government to keep benefits flowing after the trust fund went dry in the summer of 2009. But the tab to the federal government and the shortfall that has to be made up by employers would both have been far higher had Florida paid out more in benefits.

President Barack Obama wants to let Florida delay about $500 million in payments for the next two years, a plan Haridopolos supports. But Scott wants the Legislature to use general revenue funds to cover the interest payments.

House Speaker Dean Cannon, R-Winter Park, disputed that his chamber's plan would put more of a burden on the unemployed.

Instead, he said, businesses could use their savings to hire more workers.

"Our whole mission is do what we can this entire session to lift the burden off of employers, free up their capital so they can hire the people who are seeking work," Cannon said in an interview after the vote. "We took a great step in the right direction today."

But Scott Brown, chief economist with Raymond James Financial in St. Petersburg, questioned the contention that cutting unemployment taxes will translate to more jobs anytime soon. "I don't think you can make the argument that smaller government means that employers are immediately going to go out and hire a lot of people."

Karen Woodall, a lobbyist for the unemployed, cheered Senate leaders into what will likely be a showdown with the House over the issue.

"It's no picnic to be on unemployment," Woodall told Detert, the sponsor of the Senate bill. "Hang tough in there."

Times/Herald staff writer Mary Ellen Klas contributed to this report. Michael C. Bender can be reached via e-mail at mbender@sptimes.com

$747 million

Amount over five years by which the House proposal would cut business taxes

$1.3 billion

Proposed drop in benefits for unemployed Floridians to finance the tax cut

12

Weeks the state would pay unemployment insurance, down from 26 weeks

It might get harder to be unemployed in Florida 03/10/11 [Last modified: Thursday, March 10, 2011 10:42pm]

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