Work Force Services Interim Committee Hears DWS Report

Posted by Thomas E. Bingham, President, Utah Manufacturers Association – August 21, 2009

As part of their regularly scheduled interim committee meetings the Utah Legislature’s Workforce Services Committee received updates from Chris Love, Deputy Director of the Department of Workforce Services on Wednesday afternoon. Love reported that the Unemployment Insurance Trust Fund, the fund containing the contributions of employers from across the state, was sound despite paying out more than $10 million per week to provide benefits to unemployed workers in Utah. He noted that it was due to the foresight of the Unemployment Advisory Council who established triggers in the fund to avoid wide swings in the fund in times like we are experiencing today with record unemployment.

Love said that the U.S. Department of Labor has offered stimulus money to states including Utah if they would enhance benefits from the fund. Some $20 million are available to Utah if they are willing to add the benefits. The advisory council, of which UMA president Tom Bingham in a member, recommended Utah not seek the stimulus money because the benefit enhancements required to get the federal dollars continue after the money to enhance the trust fund is expended.

Finally, a request by Department to have the legislature consider reversing a direction they took several years ago to reduce the Social Security Offset for Unemployment Insurance benefits was discussed but with no action. Again, there was an agreement between the representatives of employers and labor on the advisory council a few years ago to reduce the social security offset from 100% to 50% for a period of time to utilize federal money given to Utah. The agreement was to split $64 million evenly between shoring up the trust fund and enhancing the benefit until the labor portion was expended, and then sunset the law that reduced the offset. Now that the money has been spent for the added benefit, the law is due to sunset in 2010, but some have suggested the legislature amend the law to remove the sunset provision and keep the offset at 50%. That would negatively impact the trust fund and add additional burden on employers, something the employer representative oppose. At the urging of the employers representatives, the legislative committee was ready to vote to allow the social security offset reduction sunset, but for the insistence of the committee’s House Co-Chair Representative Steve Mascaro, who said he was going to place the issue on the September interim committee agenda for further consideration. UMA opposes removing the sunset provision and will testify in the hearing next month to have the social security offset restored to 100% to protect the integrity of the fund.