The Vermont Senate again passed over a vote Thursday on whether to send bigger checks to laid-off Vermonters and delay a hike in businesses’ unemployment taxes, as legislators worked behind the scenes to reach consensus on the benefit proposals.
As passed by the Senate Committee on Economic Development, Housing and General Affairs two weeks ago, S.10 would raise the maximum weekly benefit for unemployment insurance recipients by 20% for a year and permanently send additional $50-a-week payments to claimants with dependent children.
It further proposes spreading a hike in businesses’ unemployment insurance taxes — which are now set to skyrocket in July — over several years.
The Senate twice postponed scheduled votes on the bill last week after business leaders cried foul over the increased benefits endorsed by the committee. Efforts to seek a compromise pushed the vote to this week — but the upper chamber again delayed it Thursday as negotiations dragged on.
Lawmakers leading negotiations still disagree over the level of benefits the bill should include, and on whether to remove 2020 from the formula used to calculate changes in employers’ unemployment insurance tax schedule. The latter measure would save businesses from being charged millions of additional dollars in taxes they pay into the Unemployment Insurance Trust Fund, because the calculation is heavily influenced by years in which the economy struggled.
Sen. Randy Brock, R-Franklin, the chamber’s minority leader, brought an amendment to the economic development committee last week that sought to compromise on the dependent benefit, and proposed creating penalties for those who commit unemployment insurance fraud.
A week later, Brock and the economic development committee chair, Sen. Michael Sirotkin, D-Chittenden, are still working toward agreement on the duration of the dependent benefit and the specific changes to businesses’ tax schedule, Sirotkin told VTDigger Thursday afternoon.
“Senator Brock and I worked very hard and collegially to reach consensus, but we still have a disagreement over how many trust fund dollars should be put toward reducing employers’ taxes and how much should go to workers in the form of a dependent benefit,” Sirotkin said in an email.
Sirotkin has been a staunch advocate for both the 20% benefit increase and the dependent benefit throughout deliberations on the bill. Brock, the lone “nay” vote when the committee approved S.10, did not immediately return VTDigger’s request for comment Thursday.
The adjustment in businesses’ unemployment tax schedules that the legislation would enact, first proposed by Gov. Phil Scott’s Department of Labor last fall, formed the original basis of the bill.
Labor interests’ demands that S.10 should increase benefits for employees, too, has driven the bill’s deliberations since it entered the economic development committee earlier this year.
Even the maximum weekly unemployment benefit of roughly $530 has left laid-off workers scraping by during the pandemic, labor lobbyists have argued. They add that the health of the Unemployment Insurance Trust Fund is sufficient to pay laid-off workers greater benefits.
That discussion resulted in the Senate panel drafting a proposal including the 20% benefit increase in the bill.
Sen. Kesha Ram, D-Chittenden, later proposed adding the $50-a-week dependent benefit, too. As many as 73% of people receiving unemployment benefits in Vermont were women at one point during the pandemic — a greater percentage than in any other state.
The boost in benefits incurred by federal aid since the pandemic began has not made up for the acute need felt by the state’s poorest families, advocates say.
“Neither Vermont’s low-wage economy nor our neglected safety net are meeting the needs of our kids and families,” Michelle Fay, director of Voices for Vermont’s Children, told lawmakers in the economic development committee Wednesday. “We know that helping people meet their basic needs helps them plan for the future — it’s not the demotivating crutch that you hear about from business groups.”
Fay was referring to a common refrain from business leaders, who in the past week have expressed worries that an additional hike in unemployed workers’ benefits — which are set to be boosted more by the American Rescue Act — could make it hard for them to find employees in the waning months of the pandemic.
Experts dispute the argument that higher unemployment benefits disincentivize laid-off workers from reentering the workforce. Still, Vermont employers have legitimately struggled to fill jobs since before Covid-19 entered the state.
With no work-search requirement currently in effect that precedes the collection of unemployment benefits, business leaders say workers would be smart to collect benefits rather than search for a job. (Gov. Scott said Tuesday that the work-search requirement would soon return.)
“A lot of business owners are concerned that, as the economy opens up in July, the federal benefits coupled with these benefits will make it more difficult for (employers) to find workers,” said Patti Komline, a lobbyist who represents Vermont’s regional development corporations, in the economic development committee Wednesday.
Employers are further concerned about being on the hook for millions of dollars in costs to the Unemployment Insurance Trust Fund if the dependency benefit takes effect. The proposed change in business’ tax schedules is merely a delay and not a net gain for businesses, they point out.
Of S.10, Sirotkin said Thursday, “It is still a work in progress, but should be on the floor tomorrow.”
