Pa. Senate slated to pass unemployment compensation fix

June 05. 2012 10:00AM - Last modified: June 05. 2012 10:23AM

Jason Scott

The state Senate today is expected to pass a Republican-backed plan to sell as much as $4.5 billion in bonds to pay off the commonwealth's unemployment compensation debt to the federal government.

Led by Columbia County Sen. John Gordner, who represents the northern end of Dauphin County, Senate Bill 1310 also would limit benefit eligibility to help get Pennsylvania's trust fund to solvency by 2019.

The debt is about $3.9 billion. The bonds would pay off that amount plus interest.

Employers are on the hook for about $354 million this year because of the debt. That total includes $110 million that was added when the federal unemployment compensation tax credit for employers was reduced in January.

SB 1310 would require employees to earn 49.5 percent of their base-year wages outside their highest-earning quarter — a change from 37 percent — to qualify for jobless benefits.

Under current law, employers pay unemployment compensation assessments on the first $8,000 each employee earns. The legislation would increase the taxable wage base to $10,000 in $250 annual increments through 2018.

The bill also maintains a freeze on the maximum weekly benefit — $573 — until solvency is achieved. Last June, Gov. Tom Corbett signed into law SB 1030, also known as Act 6 of 2011, to freeze the rate for 2012.

The changes to the law under SB 1310 could realize $352 million in annual savings to the trust fund, according to Gordner's office.

The bill was re-reported on concurrence Monday by the Senate Rules and Executive Nominations Committee. If approved by the Senate today, it would move to the House on Wednesday before going to the governor.

Democrats disagree with the approach of SB 1310.

"It favors employers to the detriment of workers," said Bill Patton, a spokesman for House Democrats. "Tens of thousands of jobless Pennsylvanians who are seeking work will lose unemployment insurance if the bill passes in its current form."


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