Jobless benefits have been a lifeline to Floridians during this recession, injecting an estimated $9 billion into the state economy. But if the Florida House and Gov. Rick Scott have their way, that aid will soon shrink to save businesses as little as $18 per worker in taxes. Now it's up to the Florida Senate to apply some common sense on an issue that's entirely of the state's own making. Cutting unemployment benefits now would drive more of the unemployed into destitution and take money out of the economy, while saving businesses relatively little. That does not make fiscal sense.
Last week the Republican-controlled House passed HB 7005, which would reduce benefits for the unemployed from 26 weeks to 20 weeks. Then, as the unemployment rate falls, benefits would be further reduced to a maximum of 12 weeks. (Since the recession hit, the federal government has been providing extended unemployment benefits for a total of 99 weeks, but that's set to expire in 2012.)
The House bill would be punishing in a state where the unemployment rate is still 11.9 percent, far higher than the national average of 8.9 percent, and where the Tampa Bay region has one of the lowest-performing economies in the nation, according to a Brookings Institution finding. A recent study by researchers at Florida International University and the National Employment Law Project found Florida has one of the strictest programs in the country in terms of eligibility for benefits and size of payouts, a maximum of $275 a week. Just 22.6 percent of Florida's unemployed received compensation in 2010, ranking it 49th in the country.
But that doesn't seem to matter to Republican leaders who are responding to the sharp rise in unemployment insurance rates, from a minimum of $25.20 per worker in 2010 to $72.10 in 2011 and a projected $206.55 in 2012. (The House plan would lower the 2011 cost to $54, an $18 savings.) Those increases aren't the workers' fault. They are the result of shortsighted and politically popular policy in good years. Businesses enjoyed low unemployment taxes when the state should have been stockpiling money to prepare for a long economic downturn.
Florida's unemployment compensation trust fund ran out of money in August 2009. Since then, the state has borrowed more than $2 billion from the federal government to keep paying benefits. Florida taxes employers on only the first $7,000 of each employee's wages — the federal minimum established in the 1980s. Over the years, other states expanded the taxable base or indexed it to inflation. Florida's base is set to rise to $8,500 in 2012, but even that is not enough.
The Senate has a more sensible plan for addressing unemployment compensation. Though it goes too far in some ways in limiting unemployment benefits, it retains 26 weeks of state jobless benefits.
Some Republican leaders in Tallahassee seem to think unemployment compensation subsidizes laziness. It doesn't. The purpose is to give workers who lose their jobs through no fault of their own the time to find a suitable replacement job. With more than 1 million Floridians out of work, that policy still makes sense.