Credit: Capitol Beat News Service
Opponents argue bill threatens state’s unemployment fund
ATLANTA – Opponents of a bill the Georgia House of Representatives passed on the next-to-last day of this year’s legislative session are warning it could threaten a fund the state uses to pay unemployment compensation.
Senate Bill 160, which the House’s Republican majority passed 97-68 along party lines, replaces a state Department of Labor administrative fee that expired at the end of last year using money that otherwise would go into Georgia’s Unemployment Insurance (UI) Trust Fund. The Senate passed the measure early last month 34-21, with several Democrats supporting it and one Republican voting “no.”
Supporters said the estimated $20 million the fee would raise during each of the next three years is critical to an agency that has been underfunded for years. The legislation is set to expire at the end of 2026.
The labor department has lost $12 million to $14 million annually since the Great Recession struck Georgia more than a decade ago, funds it has never recovered, said Bruce Thompson, who was elected state commissioner of labor last fall and took office in January.
Then, when the pandemic hit three years ago, a typical annual caseload of 200,000 to 300,000 unemployment claims soared to more than 4 million in one month’s time, Thompson said.
“Customer service is just not where I want it to be,” he said. “We have a federal obligation and a moral obligation to provide these services.”
The bill’s opponents aren’t arguing that the labor department doesn’t need the money. Their beef is that the funds would come from an Unemployment Trust Fund already depleted by the demands of the pandemic.
”UI Trust Fund contributions should not be reduced to compensate for other funding allocations, as this risks the resiliency of a trust fund which already ranks below a majority of states in terms of solvency,” Ray Khalfani, senior worker justice policy analyst for the progressive Georgia Budget and Policy Institute, said in a statement March 27 after the House passed the bill.
“The state has more than enough resources on hand to both replenish the Unemployment Insurance Trust Fund and ensure that the Department of Labor can operate efficiently and at full capacity.”
House Democrats made the same argument during the floor debate on the bill.
“This bill presents a false choice,” said House Minority Whip Sam Park, D-Lawrenceville. “This is a bill that will risk the insolvency of our Unemployment Insurance Trust Fund … as a mechanism to simply do what we should be doing to begin with: investing in our Department of Labor to help workforce development and to help unemployed workers get back on their feet.”
Thompson said the UI Trust Fund is currently only 52% solvent in the wake of the pandemic. Federal pandemic relief didn’t help as it should have because the agency’s previous administration failed to encumber $102 million in federal aid and had to forfeit the money, he said.
But Thompson said other states are facing the same predicament with unemployment funds that have been dramatically reduced by the pandemic.
House Industry and Labor Committee Chairman Bill Werkheiser, R-Glennville, who carried Senate Bill 160 in the House, argued during the floor debate that the alternative to not passing the bill would be to not collect any additional money for the UI Trust Fund. He urged his House colleagues not to panic.
“The sky’s not falling,” he said.
Thompson agreed there’s time to monitor the trust fund and respond accordingly.
“We’ll watch that solvency and see if it goes down,” he said. “If it does, we’ll address it again.”
The bill is now in the hands of Gov. Brian Kemp, who has until early next month to sign it or ax it with a veto.