A state panel recommended Thursday that Wisconsin lawmakers tweak state law to allow jobless people to collect an additional three months of federal unemployment benefits, ending a months-long stalemate over whether the benefits would encourage unemployment.
Extended federal unemployment benefits are designed to serve as a last-ditch safety net for an unemployed person who has exhausted all other state and federal benefits. Wisconsin's unemployed qualified for the extended benefits until April, when the state's unemployment rate improved enough that state residents no longer qualified.
The Unemployment Insurance Advisory Council, which guides legislators on unemployment benefits policy, voted 9-0 to soften the qualifying language. The move calls for taking the average of the past three years' unemployment rates rather than the past two, capturing the spike in unemployment when the recession began. The end result would be a higher average unemployment rate, enabling the state to collect about $90 million in federal dollars allocated through the 2009 stimulus bill.
The move would translate to $363 per week for a jobless person. Up to 11,000 people were eligible for the benefits when they ended in April, according to state labor officials.
"I believe we're doing the right thing for people," said council member Phil Neuenfeldt, president of the Wisconsin AFL-CIO.
The council, made up of labor and business leaders, has advised the Legislature for decades on unemployment benefit policies. Lawmakers, of course, can always act without consent from any entity, but they've typically let the council lead the way since its members have first-hand knowledge of employment issues.
All but about a dozen other states have tweaked their qualifying statues to extend the federal benefits. Labor leaders on the council first broached revising Wisconsin's statutes in February, two months before they ran out. But Republican lawmakers and business leaders on the council hesitated. They argued any extension would encourage the unemployed to put off finding jobs and the council did nothing.
Days after the benefits ran out in April, Republican Gov. Scott Walker sent a letter to the council. He said he, too, believes the extension would do nothing to create jobs or drive people back into the work force, but the state should still take advantage of millions of federal dollars that don't have to be paid back.
The council met in May but still did nothing. On Thursday the council's business and labor factions spent two hours behind closed doors hashing out their differences.
When they emerged council member James Buchen, vice president of Wisconsin Manufacturers & Commerce, the state's largest business group, said his side had softened its view.
In months past, he said, employers believed the extensions weren't needed because the economy seemed to be gaining ground. He's still worried about people turning down job offers so they can go on collecting $363 per week, but now that the recovery appears to have slowed, the extension makes more sense.
"It doesn't cost employers anything," he said.
The Republican-controlled Legislature still must approve the changes in bill form. Lawmakers aren't officially scheduled to return to Madison until September, but they could come back sooner to deal with redistricting matters and could address the changes then. The extended benefits would apply retroactively from their end date in April. Messages left at Assembly Speaker Jeff Fitzgerald and Senate Majority Leader Scott Fitzgerald's offices weren't immediately returned.
The council also asked Walker to veto a provision in the state budget that would require newly unemployed workers to wait a week before collecting their first state check. The move could save the state as much as $50 million a year. The Legislature's finance committee tucked the provision into the budget without consulting the council first, eschewing decades of tradition.
The council voted 9-0 to adopt a letter Neuenfeldt and Buchen sent to Walker this week as its official position on the matter. The letter takes the finance committee to task for circumventing the process and urges Walker to nix the idea as he makes his budget vetoes.
Walker spokesman Cullen Werwie issued a statement saying the governor is evaluating potential vetoes.