Lawmakers hear support for increasing jobless benefits

By Cy Ryan

Wednesday, March 18, 2009 | 12:13 p.m.

CARSON CITY – The Las Vegas Chamber of Commerce, union officials and lawmakers voiced support for a plan to increase weekly unemployment payments, to extend the benefits and make more out-of-work Nevadans eligible for the funds.

The Senate Finance and Assembly Ways and Means committees heard only support for accepting the new federal extension to benefits during the economic downturn, which has seen the unemployment rate rise to 10 percent in Las Vegas and up to 15 percent in some rural counties.

Assemblyman Morse Arberry, chairman of Ways and Means, said his committee will likely vote early next week on a bill and a resolution to allow Nevada to accept the federal program.

“I didn’t see any opposition,” Arberry said after a two-hour hearing on Assembly Bill 469 to change Nevada law and Assembly Concurrent Resolution 17 to notify the federal government the state will accept the program.

The plan would provide an extra seven weeks of unemployment checks to those whose 72 weeks of benefits have expired. It would also increase the average weekly check of $300 by $25 and it will allow 4,100 more people to qualify – most of them in construction or in low paying jobs.

Gov. Jim Gibbons has agreed to accept the $114 million to extend the jobless benefits by seven weeks. However Dan Burns, communications director for Gibbons, said the governor still hasn’t decided whether to accept $77 million to make the additional 4,100 workers eligible for the benefit.

Burns said there are strings attached to many federal programs but this one “has chains attached” and it would mean an increase in the rates employers pay into the unemployment trust fund every year.

Veronica Meter, vice president of government affairs for the Las Vegas Chamber of Commerce, said the group backed the legislation, saying it would spur the economy. She said the chamber was cognizant of the risks but “the benefits outweigh the risks.”

Cindy Jones, administrator of the state Division of Employment Security Division, told the committees the average unemployment tax payments by a business are now $353 a year per employee. Accepting the federal program for the extra 4,100 workers would mean an increase of about $14 a year to the average employer, which might not be assessed until 2013.

The legislation is being pushed by Assembly Speaker Barbara Buckley, D-Las Vegas, and Assemblyman Marcus Conklin, D-Las Vegas.

Buckley said some 13,700 workers will run out of jobless benefits by July 1. Accepting the federal program would mean the state would put up an additional $405,000 – to cover the unemployment programs in state government and other units, she said.

Senate Minority Leader Bill Raggio, R-Reno, questioned the impact on the premium of employers.

Jones said the unemployment trust fund will be broke by the end of the year. She said the state may borrow $750 million from the federal government which is interest free if the loan is paid off in two years.

An average employer now pays 1.33 percent on the first $26,600 wages. The rates are set each year in October by the division. Jones said the philosophy is to build up a big reserve in good years so there is money to pay the claims in the poor economic times and avoid raising the rates of employers during these recessions.

The last time the state borrowed to replenish the fund was in 1974. Jones said the state collects $390-$400 million a year but has paid out about $1 billion in benefits this year.

Danny Thompson representing the Nevada AFL-CIO said the state would face a “catastrophe,” including a sharp increase in homelessness, if it didn’t accept the money. He told the committees that it would be the “prudent thing for your constituents” to override a possible veto by the governor.