BRANSON, Mo. — Unemployment benefits in Missouri could be cut from 20 weeks to 13 weeks if a new bill passes through the legislature.
The proposed change to Missouri’s unemployment system is designed to protect unemployment trust – a trust funded exclusively by business owners – from the next economic downturn.
Nolan Fogle owns seven businesses in Branson. While he, like many local business owners, has to cut back for the slow part of the year, he doesn’t expect the potential change to have a major impact on his employees.
“Our off season is primarily about 10 weeks,” he says, “so there won’t be a major effect as far as that goes. Honestly, during the season, we have more jobs than employees right now.”
The new plan would base the maximum number of weeks a person is eligible for unemployment on the state’s unemployment rate, similar to a sliding scale.
For example, if the state’s unemployment rate is below 6-percent, the maximum number of weeks of eligibility is 13. The system would stair step up to 20 weeks, when the unemployment rate is more than 9-percent.
In all, weekly eligibility is broken into eight new categories.
“I think it’s important to say though… if you look at last year, the average duration of weeks claimed was 12.4,” says Tracy King, vice president of governmental affairs with the Missouri Chamber.
“So that’s well below the 13-week minimum number of weeks,” she says.
King says while the state’s unemployment trust currently has a positive balance, it is susceptible to extreme losses during an economic downturn.
“Missouri has had to borrow [from the Federal Government during] the last five recessions,” she says. “We’re the only state in the nation that’s had to do that.”
“At the last recession… the trust was expected to be over two-billion dollars in deficit,” King says.
When the trust loses money during a recession, employers end up footing a bigger bill.
Employees have to pay the money borrowed from the government back, with interest, on top of what they are already paying into the trust.
But in order to make the trust stronger, some employees may have to wait longer to receive tax credits they’re currently receiving.
For owners like Fogle, that could cost his businesses thousands of dollars.
“If there’s either a lot of unemployment paid out we would get less credit, possibility very little credit compared to what we get now or it could take longer to get the credit,” Fogle says.
The measure being considered in Jeff City is identical to a bill from 2015.