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Federal unemployment aid to save state $40 million

Doyle requests help from Washington to ease financial strain

To help alleviate the monetary deficiencies of the Unemployment Reserve Fund, members of the Legislative Joint Committee on Finance voted unanimously Tuesday to approve a bill that will stop the distribution of state supplemental unemployment benefits.

According to a letter from the Legislative Fiscal Bureau, the bill will allow eligible individuals to collect unemployment benefits from the federal government instead of from the state.

The bill is a response to an executive order signed by Gov. Jim Doyle Jan. 16.

Sen. Dave Hansen, D-Green Bay, said the proposal would save the state $40 million because of the recent spike in unemployment.

“A lot of people are out of work and are demanding their unemployment benefits from the government,” Hansen said. “This is to help people with their unemployment claims and extend their claims rather than having to draw from the state.”

Lawmakers in Washington addressed nationwide concerns regarding high unemployment periods by passing the Supplemental Appropriations Act of 2008.

The act includes the Emergency Unemployment Compensation Program, under which the federal government provides unemployed individuals with 13 weeks of unemployment benefits.

Citizens can receive these benefits if states notify the federal government that supplemental state benefits will not be rewarded to unemployed citizens.

Under Wisconsin’s current law, there are three types of unemployment benefits for workers: regular, supplemental and extended benefits.

Regular benefits are granted to the majority of citizen seeking unemployment.

Supplemental and extended benefits are designed to lengthen the time individuals receive unemployment benefits. These methods are utilized during periods of high unemployment.

If the bill passes through the Legislature, it will be combined with Doyle’s executive order to notify the federal government Wisconsin citizens will stop receiving supplemental state benefits and instead receive federal benefits.

Rep. Peter Barca, D-Kenosha, co-chair of the Joint Legislative Audit Committee, recently conducted an audit of the state’s Unemployment Reserve Fund. He said due to the increase in unemployment claims, funds in the state reserve have deteriorated quickly and will likely run dry at the end of next month.

“Obviously it’s very important that we track the amount of funds available in the unemployment fund, it’s an insurance fund,” Barca said. “It’s one of the most important programs available to Wisconsin citizens.”

Legislators hope passing this measure will prevent the fund from running out of money.

Rep. Robin Vos, R-Racine, member of the Joint Committee, said he believes the measures taken by Legislature are necessary.

“It’s going to allow no reduction in benefits but will save Wisconsin businesses $40 million,” Vos said. “We can keep people employed without having to worry. At a time when we are seeing jobs leave the state, anything we can do to keep small businesses in the state … [is important].”

The entire Legislature will vote on the bill during a special session today.