BENTONVILLE -- An overhaul to the state's unemployment insurance system is one of the most important but least-noticed changes of the legislative session, a sponsor of that change said Saturday.
State Sen. Jim Hendren, R-Sulphur Springs, was chairman of the legislative task force that altered the state teacher health insurance system. He is also the co-chairman of the legislative task force set up to change state health care programs such as Medicaid and the private option. He and Rep. Lane Jean, R-Magnolia, sponsored House Bill 1489, which became law Monday as Act 412 of 2015.
Without the bill, employers faced rate increases amounting to $350 million to make sure the state's unemployment insurance plan was adequately funded, Hendren said at a legislators' forum hosted by the Roger/Lowell Chamber of Commerce. The forum was held at the Northwest Arkansas Community College campus.
The bill reduces the amount of money that the state has to keep in the fund that pays unemployment benefits. That reduces the amount employers have to pay into the fund. The act contains two major provisions. First, the amount of benefits paid to the unemployed is based on the average salary the employee was paid in the last four quarters. Those benefits were based on the last quarter before this act became law.
"What was happening was that people were working in the holiday season and getting a lot of overtime, then were paid unemployment," Hendren said Saturday. "Their benefits were based on what they earned while making that overtime." Now, the benefits are based on a year-long average instead of a seasonal peak.
Second, the bill reduced the number of weeks a former employee is eligible for benefits from 25 weeks to 20. That is in line with surrounding states, Hendren said.
"When a company's looking to move into Arkansas and sees that it will have to pay 3.8 percent of an employee's wages for unemployment insurance here and 1.5 percent across the state border, that's a big number," Hendren told the forum. Act 412 should start bringing down the premium paid, he said.
In other issues at the forum, state Rep. Jim Dotson, R-Bentonville, said that it appears unlikely that the Arkansas Legislature will send any proposed constitutional amendments to the voters in the 2016 general election ballot. While nothing is certain until the current legislative session is over, there appears to be no consensus on what the Legislature should propose, he said.
State Rep. Sue Scott, R-Rogers, said that most of the important business of the session is settled but that the crush of bills still to be considered is huge. She cited the 97 bills the House had on its agenda on Friday alone.
Hendren said the two biggest outstanding issues of the session concern the state's lottery and the proposed cut in the capital-gains tax. How the state Department of Finance and Administration will administer the lottery is being debated, he said, and the Senate is not yet convinced that the state can afford the tax cut the House wants.
State Desk on 03/22/2015