The Administration’s bill ( HB 1228/SB 882) to accept federally-paid extended unemployment insurance benefits for private sector workers has raised concerns with the effect on public sector employers, who are self-insured and must pay for these benefits directly. During the hearings on both bills, MACo and MML requested the opportunity to work with the Administration and the Committees to identify ways to help local governments accommodate these costs without putting new strains on local budgets.
Through discussions with the Administration, a compromise has been reached whereby $1.64 million would be set aside in an “Extended Benefits Fund” to reimburse counties and municipalities for a portion of their net costs associated with providing these benefits. Net costs refers to the total extended benefits paid less tax revenue payable for providing these benefits. Counties with a negative net cost would be reimbursed at a minimum of 60% of associated costs and municipalities with a negative net cost would be reimbursed at a minimum of 80% of associated costs. Funds to reimburse the counties and municipalities would be generated through State tax revenues in excess of the direct costs to the State for extended employee benefit payments.
The Senate Finance Committee has voted SB 882 favorable with these amendments and it will be brought to the floor today. The House Economic Matters Committee is expected to vote on HB 1228 this afternoon.