A bill that would lower the maximum weekly unemployment benefit by $126 — from $451 to $325 — was rejected by a House committee Monday.
Senate Bill 875 needed 11 votes from the House Public Health, Welfare and Labor Committee and received seven. Eight on the panel voted no. Sen. Bart Hester, R-Cave Springs, told the committee said the change would put Arkansas’ jobless benefit in line with surrounding states.
"I think everyone in this room would agree that we want Arkansas working," Hester said. "This is an undue burden on our businesses. We need to be fair to businesses so they can be fair to their employees so we can keep Arkansas working."
He said the reduction would take effect after the state pays off more than $200 million it owes the federal government for unemployment insurance, which is expected to occur by 2015.
The state owes the federal government for money it borrowed to keep unemployment benefits flowing to thousands of out-of-work Arkansans during the recession. The current balance is about 218 million, down from $360 million.
Several people spoke against the bill, including David Funderburg of Vilonia, who said he was an unemployed construction worker. "Who protects the rights of the working families that are unemployed through no fault of their own,?" he asked, adding it was the legislators’ job.
"I’m confident that things will continue to get better, but it’s still tough out in the work place," Funderburg said. "Our friends and neighbors who are unemployed are having a hard time financially. Any reduction in benefits is just going to make it worse."
Also speaking against the bill was Matt Fair, president of the Plumbers AFL-CIO Union in Arkansas. Montine McNulty, executive director of the Arkansas Hospitality Association, spoke for the bill.
In an effort to address the debt, the Legislature in 2011 approved and Gov. Mike Beebe signed into law Act 861, The law capped maximum unemployment benefits and cut the benefit period by a week. It also eliminated wage indexing and changed some of the eligibility requirements for workers seeking unemployment.
The unemployment benefit changes included in Act 851, plus additional revenue generated by a 20 percent increase in the unemployment insurance rate employers pay, which was approved by the Legislature in 2009, and the continued improvement in the economy should allow the state to reduce the debt to zero by 2015.
SB 850 by Sen. Jim Hendren, R-Gravett, which would lower the unemployment insurance rate employers pay from 8 percent to 6 percent, also was rejected by the committee. The measure need 11 votes and it received 10.
Alan Hughes, president of the AFL-CIO Arkansas, spoke against the bill.