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Unemployment compensation reform heading to Corbett's desk

By , - Last modified: June 7, 2012 at 9:02 AM

A day after passage in the state Senate, the House passed a bill Wednesday designed to pay off Pennsylvania's debt to the federal government regarding unemployment compensation.

Senate Bill 1310 passed by a bipartisan vote of 129-67. It now heads to Gov. Tom Corbett’s desk for his signature.

“This debt created an escalating per-employee tax and was threatening Pennsylvania jobs,” Corbett said in a news release. “Thanks to the legislature’s quick action on this jobs bill, employers will not have to worry about unpredictable repayment costs and solvency will be restored to the trust fund.”

The plan is to sell as much as $4.5 billion in bonds to pay off the roughly $3.9 billion debt, plus interest, and narrow the scope of benefit eligibility to help get the commonwealth’s trust fund to solvency by 2019.

The legislation is expected to save employers about $175 million to $200 million because the interest on the bonds would be less expensive than the interest on the federal debt.

Beginning next year, the measure would freeze the maximum weekly benefit of $573 through 2019. Workers who made 50.5 percent of their annual income or more in one quarter would no longer be eligible for benefits, a change from the current 63 percent limit, according to the bill.

The change would affect less than 10 percent of those unemployed and save the system an annual $276 million, state lawmakers said.

“Consequently, the insolvency of our unemployment compensation system impacts the ability of Pennsylvania businesses to hire new employees and maintain the staff they have in place, making Senate Bill 1310 a piece of jobs legislation we desperately need in order to move our economy forward,” the York County House Republican delegation said in a statement.

Democrats largely disagreed with the approach of SB 1310.

“It favors employers to the detriment of workers,” Bill Patton, a spokesman for House Democrats, said Tuesday as the bill headed for passage in the Senate. “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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Jason Scott

Jason Scott

Jason Scott covers state government, real estate and construction, media and marketing, and Dauphin County. Have a tip or question for him? Email him at Follow him on Twitter, @JScottJournal. Circle Jason Scott on .

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