A hotly debated proposal to send bigger benefit checks to laid-off workers with dependent children is on the bubble in a House committee, which could strip out the extra benefits.
As passed by the Senate last month, S.10 would send additional $50-a-week payments to people on unemployment who claim dependents. It would also delay for one year a massive hike in taxes that businesses pay into Vermont’s unemployment insurance trust fund, now slated to take effect this summer.
Now, the House Committee on Commerce and Economic Development has drafted an amendment to the bill that would do away with the dependent benefit. Rep. Mike Marcotte, R-Coventry, the committee chair, is not sure this is the right time or place to enact such a benefit, he said in an interview Friday.
“We know there are 13 other states that have included a dependent benefit in their unemployment insurance statutes, but I’m not sure that's the right place for it to go,” Marcotte said. “If we need to provide more in benefits, then we should have those discussions in the human services realm, not in a bill that deals with the trust fund balance.”
The House discussion follows weeks of contentious, back-and-forth debate in the Senate on whether to include increased unemployment benefits in the legislation, which originated as a proposal by Gov. Phil Scott’s Labor Department that the employer tax hike be delayed.
Lobbyists for labor unions argued that a precedent set in 2010 — when employers and workers shared the burden of restoring Vermont’s unemployment insurance trust fund to health after the Great Recession — should be honored now, too.
Virtually every major Vermont business group responded that the delay in tax increases does not offer employers true tax relief — merely a tax deferral. The bill thus does not call for a corresponding hike in benefits that employers will ultimately be on the hook for, they argue.
Sen. Kesha Ram, D-Chittenden, proposed the dependent benefit in the Senate.
While business interests oppose it, and Senate Republicans — and some Democrats — voted against it, the dependent benefit’s inclusion in the bill that passed the Senate offered a kind of compromise between the two interests. Sen. Michael Sirotkin, D-Chittenden, had first proposed an across-the-board benefit hike in addition to the dependent payments.
Ram and other advocates say dependent payments offer a small step toward remedying a huge problem in the state: Vermont women have been hit harder by the pandemic unemployment crisis than women in any other state, consistently making up more than 70% of unemployment claimants.
Watching the dependent benefit unravel in the House Commerce discussion this week has been baffling, Ram said in an interview Friday.
“I really can't understand how the bill could have become so lopsided to create a huge calculation change that supports businesses, which potentially has implications for the UI trust fund,” Ram said.
She was referring to another change proposed by the commerce committee’s amendment: Rather than delaying the abrupt increase in employers’ UI tax schedules as the Senate bill proposed, the House version would remove 2020 from the calculation used to determine rate schedules on those taxes.
Removing 2020 would absolve businesses around the state from millions in immediate tax payments over the next 10 years, because recession years disproportionately affect rate schedules.
Business sector leaders and labor department officials have favored removing 2020 from the calculation.
On the dependent benefit, Marcotte said Friday that a slew of supports intended for families in the American Rescue Plan Act — in the form of federal grants and tax credits — are a more appropriate way to give greater help to people with children than through the bill in his committee.
But those benefits are available to all American families, not just unemployed ones, argued David Mickenberg, a lobbyist for Working Vermont, a coalition of public- and private-sector unions, in the commerce committee Friday.
“Any implication that because the federal government has done something for Vermonters somehow relieves our state’s obligation to assist more undermines the policy that this committee and the Legislature has pursued for the last year and a half when it pertains to businesses,” Mickenberg told lawmakers Friday.
Meanwhile, business lobbyists and officials from the Labor Department voiced strong support for amending the bill in commerce committee testimony this week.
And pressure is mounting on lawmakers to move the legislation, as businesses face the prospect of massive tax hikes this summer as the end of the legislative session nears. The bill “really needs to move,” Austin Davis, a lobbyist for the Lake Champlain Chamber of Commerce, told lawmakers Friday.
Marcotte said in the commerce committee Friday that he expects the committee to vote on the bill next Tuesday, setting it up for a vote on the House floor thereafter.
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